This quote from Robert Raninowitz, senior adviser to pure, a charity devoted to combating climate change, nicely sums up perhaps the issue of the moment: what is the business world going to do about climate change? And what are the implications of these changes, particularly in relation to banks and other financial institutions?

I am going to be hosting some business breakfasts around this subject (please email w.mason@ahselection.com if you'd like to come along), with speakers from a number of leading financial services companies including Man Investments, the global leader in Alternative Investments and one of the first FS companies to go carbon neutral.

Two of the first areas we're going to look at are Climate Change and Carbon Trading.

Perhaps the tipping point for climate change entering the mainstream business agenda is Al Gore's An Inconvenient Truth ( click here for a trailer): indeed a couple of days ago Stephen Schwarzmann, head of Blackstone Group, a world leader in private equity, said anybody who did not watch the documentary had to be “intellectually deficient”. He went on to say that “ Businesses have to do things to address the issue. It is not a game.....it's not a green issue, it's not a pink issue. It’s the issue”.

In regard to carbon trading, wherein major producers of greenhouse gases, such as power utilities, buy “carbon credits” from schemes that remove pollution from the atmosphere, the only way, it seems is up.

As Financial News recently reported,

...Carbon has emerged as a dynamic feature of capital markets in the past two years. Carbon, or emissions, trading is not the preserve of specialist, niche funds; mainstream banks and investment institutions are heavily involved.... It has also prompted investment banks to extend their trading, advisory and risk management skills to this arena.

And its not just specialists any more:

..Last October, Morgan Stanley announced it would invest up to $3bn (€2.3bn) in carbon credit projects over five years... Mainstream banks have concluded climate change and the policy response it evokes will have a substantial impact on their market. John Llewellyn, senior economic policy adviser at Lehman Brothers, said environmental shifts would force wholesale moves in economic behaviour: “Companies will need to adapt and evolve and investment banks are in the business of helping clients to do that,” he said. Last week, Lehman published Llewellyn’s 150-page analysis of the impact that climate change could have on business and finance."

The challenge - and opportunity - would appear to be significant:

..Julian Knight, chief executive of Global Cool, a campaign to raise awareness of climate change solutions, and former Global Head of Sales at Man, said: “Carbon has the potential to be more far reaching than any other product in a bank. It sits close to project finance, corporate finance, commodities trading and hedge fund activity. It ties up a lot of areas.”

I look forward to hearing from the pinstripes (are they still in fashion by the way?) out there as to the topics you would like to discuss over breakfast at the RAC Club around this subject. Do not forget that a 2meg ipod is on offer to the most deserving comment.

Thanks

Wayne