Faced with record warmth, unprecedented hurricane activity and rapid shrinking of polar ice caps, investor and industry attitudes about confronting climate change are shifting. Skeptics no longer question whether human activity is warming the globe, but how fast. Companies at the vanguard no longer question how costly it will be reduce greenhouse gas emissions, but how much money they can make doing it. Financial markets are starting to identify companies that are moving ahead on climate change, while those lagging behind are being assigned more risk.

In line with these changing attitudes, more shareholder resolutions on climate change are resulting in withdrawal agreements, whereby companies agree to disclose information on the financial risks and opportunities they face from climate change. Last year, 16 of the record 33 climate change resolutions filed ended in withdrawals. Already in 2006, eight companies have agreed to issue reports or expand dislosure on ways to reduce their greenhouse gas emissions and increase energy efficiency. Another dozen or so resolutions remain pending for the 2006 proxy season. (The eight companies with 2006 withdrawal agreements are Alliant Energy, Anadarko Petroleum, Great Plains Energy, Home Depot, Lowes, MGE Energy, Simpon Property Group and WPS Resources.)

The launch of the Kyoto Protocol in 2005 has made managing greenhouse gas emissions a fact of life for American companies doing business in key markets abroad, like Europe, Canada and Japan. As the United States moves to join this international effort in the years ahead, climate governance practices will assume an increasingly central role in corporate and investment planning. How effective companies are in managing these new risks and opportunities will also have a growing impact on shareholder value and the bottom line -- two things that matter to all investors.