Yang Ruan | University of California, Berkeley (original) (raw)
Address: Berkeley, California, United States
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In recent years institutional investors have become much more interested in reducing GHG emission... more In recent years institutional investors have become much more interested in reducing GHG emissions from the private sector. Institutional investors such as pension funds have an explicit interest in long-term performance. Because of their size, they effectively invest in the whole economy and so can be considered universal owners. This means that they are most vulnerable to systemic risks such as climate change that could crash the real economy.
Investors are still discovering/determining the implications for investment practices. Current practices and attitudes are simplistic but quickly becoming more sophisticated in large part due to the efforts of WRI, UN PRI, CDP, Ceres, SASB, CalPERS, and many others.
Many corporations now set emissions reduction targets. Using data reported to the CDP (Carbon Disclosure Project) for about 1000 companies in the years 2009-2014, I found evidence that setting reduction targets do lead to emissions intensity reductions through changing the behavioral norms of corporate management.
I also investigated the relationship between changing emissions intensity and financial motivations. I looked at COGS (Cost of Goods Sold), an income statement item, and PP&E (Plant Property and Equipment), which is an asset on the balance sheet. Preliminary results are that these the relationship between changes in costs or fixed assets and emissions intensity depend on the sector. In general, increases in fixed assets are correlated with increases in emissions intensity (and vice versa). Additional work is required to determines the true drivers behind this trend.
In recent years institutional investors have become much more interested in reducing GHG emission... more In recent years institutional investors have become much more interested in reducing GHG emissions from the private sector. Institutional investors such as pension funds have an explicit interest in long-term performance. Because of their size, they effectively invest in the whole economy and so can be considered universal owners. This means that they are most vulnerable to systemic risks such as climate change that could crash the real economy.
Investors are still discovering/determining the implications for investment practices. Current practices and attitudes are simplistic but quickly becoming more sophisticated in large part due to the efforts of WRI, UN PRI, CDP, Ceres, SASB, CalPERS, and many others.
Many corporations now set emissions reduction targets. Using data reported to the CDP (Carbon Disclosure Project) for about 1000 companies in the years 2009-2014, I found evidence that setting reduction targets do lead to emissions intensity reductions through changing the behavioral norms of corporate management.
I also investigated the relationship between changing emissions intensity and financial motivations. I looked at COGS (Cost of Goods Sold), an income statement item, and PP&E (Plant Property and Equipment), which is an asset on the balance sheet. Preliminary results are that these the relationship between changes in costs or fixed assets and emissions intensity depend on the sector. In general, increases in fixed assets are correlated with increases in emissions intensity (and vice versa). Additional work is required to determines the true drivers behind this trend.