Some traders could soon be crying out for environmental changes
The winner-takes-all world of stock markets and financial trading is not one you usually associate with attempts to save the planet.
Yet if some of Britain's biggest pension funds get their way, City traders will soon be discussing how climate change could affect the stock prices of FTSE 100 companies.
Nick Robins, of Henderson Global Investors, believes it might not be long before the market sees a profit warning from a company as a result of a failure to grasp the impact of emissions on business.
"It is probable that some corporations will have made investments without taking into account the likely tightening of limits under the Emissions Trading Scheme (ETS)," he warns.
This European Union scheme, launched in January, aims to reduce emissions of carbon dioxide, the main gas that causes global warming.
Under the ETS, installations such as power stations are given allowances to emit CO2. If they become more efficient and use less than their allocation, they can sell their spare permits.
If they exceed their limit, they must buy extra allowances to avoid fines.
The price of an allowance per tonne of CO2 emitted shot up from 6 euros ($7.5; £4.1) when trading began to nearly 30 euros in early June.
It has now fallen to around 22 euros, but this is still higher than many analysts had expected.
The driving factor is the jump in oil and gas prices, which has led some power companies to decrease their use of natural-gas power plants and switch to coal generation instead.
"As coal emits much more CO2, they have to buy more credits, making carbon emissions a real cost for some companies. Investors have a legitimate right to know about such liabilities," says Simon Thomas, chief executive of environmental research organisation Trucost.
A recent report published by Henderson and Trucost estimates that greenhouse gas emissions from the UK's one hundred largest companies in 2003/04 accounted for about 1.6% of the global total.
Moreover, it calculated that up to 12% of the pre-tax earnings of FTSE 100 firms could be at risk from measures required to incorporate the cost of emissions into market prices.
Many companies are under pressure to reduce carbon emissions
The actual impact of emissions on profits and share prices will depend partly on the extent to which companies can pass on that cost to customers.
Mr Thomas points out that those operating in national markets such as electricity generation have more freedom to raise prices than those in sectors where there is fierce international competition, such as aluminium smelting.
If European materials manufacturers want to keep prices as low as their Asian and US rivals - which are not subject to the same emissions regulations - they have little choice but to cut their carbon costs.
"If we look at all the climate change issues that could affect companies' bottom lines, it is clear that for many there will be an impact," says Peter Scales, of the UK-based Institutional Investors Group on Climate Change (IIGCC).
This network, which includes large public pension funds as well as investment management firms, works to promote better understanding of climate change among investors.
"We're not trying to save the world, what we want is for people to realise that climate change is an issue that can affect the value of their investments," says Mr Scales.
A recent report by the IIGCC and the Carbon Trust warned that
"virtually all" types of pension asset could be affected by climate change.
It defines a number of areas of concern, including regulatory risk - such as emissions trading, and physical risk - such as extreme weather events.
To help evaluate those risks, some investors are calling on companies to publish better information about their greenhouse gas emissions and how they plan to mitigate the impact of climate change.
In July, a group of 15 leading US investors with more than $550bn of funds under management asked the electricity sector's biggest greenhouse gas emitters to report on how possible future limits on emissions could affect their bottom lines.
Prior to that, four power companies had already published 'climate risk' reports.
According to Dan Bakal of Ceres, a coalition of investors and environmental groups which backed the initiative, the uncertainty of US government policy on climate change is a key problem for corporations.
"There is a growing sense that there will be greenhouse gas regulation, but they don't know how that will be developed. In the US, investors and companies are working in a void, and there is a need for information to fill that gap," he says.
Yet it is not only the negative repercussions of climate change that investors want to hear about.
Many are also looking to invest in the growing number of companies planning to make money from technologies that support a low carbon economy.
In May, US giant General Electric announced it would double both its investment in research on clean technologies and its revenues from products and services that provide "environmental performance advantages" by 2010.
Henderson's Mr Robins believes that some greener companies offer good investment opportunities, describing firms that provide goods and services to improve energy efficiency as "buried treasure".
In the coming years, green may well become the new black in City circles.