Green must be serious when Goldman Sachs gets in on the act

Some really welcome news on the climate change front: the big guns of Goldman Sachs are being trained on the issue.
Goldman Sachs has set up a "Sustain" team to look at the consequences for investment. Its argument is that we are approaching a tipping point not so much in climate change (though we may be) but in investment perceptions of climate change. So it has examined 800 companies around the world, assessing them among other things, for the effectiveness of their response to the challenges.
In particular it has identified three categories of company: abatement leaders in carbon-intensive industries; adjustment leaders in less intensive industries; and solutions providers that have growth opportunities.
Some British companies feature high in the rankings. Centrica and BG Group are relatively high in the carbon-heavy group that are doing well in abating their impact. Among the adjustment leaders HSBC comes top of the banking category and Reed does well among the publishers. Not many British firms, however, can be found among the solutions providers: most of the main alternative energy companies are foreign.
For investors this research will be a useful checklist. If, for example, you want to invest in a particular sector, why not go for the "greener" companies? If you want to build a "green" portfolio, here is a ready-reckoner. But the real significance will be its influence on corporate behaviour, encouraging companies to take such issues more seriously.
The practical point is that by being "green", companies protect themselves against all sorts of attacks: consumer challenges; public relations problems; legal issues and so on. Most important of all, a good reputation for environmental behaviour makes a company more attractive to young, skilled staff. What graduate wants to admit working for a company with a bad environmental reputation?
Up until now "green" ratings have been pretty arbitrary, often carried out by lobbying organisations, and done without reference to investment performance. Goldman Sachs will help change all that.