Letter from the President and CEO: Smoke Detectors
July 9, 2008
Jim Kaitz

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From the July/Aug. issue of AFP Exchange magazine

Dear AFP Members:

This summer, you can’t open a newspaper without reading about climate change.

No matter your personal opinion on this subject, it is an issue that companies may have to address in the future as several groups are pressuring the Securities and Exchange Commission to require corporations to disclose climate change-related risks in their public filings.

So, in this governance issue of Exchange, we explore the leadership role that corporate executives and financial professionals play as companies begin to develop their climate risk mitigation strategies.

Josh Margolis, co-CEO of CantorCO2e, a subsidiary of Cantor Fitzgerald, certainly thinks they should play a big role. In “What Do You Know About Emissions Trading?” he is quoted:

"If you’re not paying attention to climate change, that’s akin to not thinking about fire insurance until you smell smoke.  Well, there’s smoke in the air now. The klaxon is ringing. Your shareholders, customers and insurers are demanding to see your climate mitigation strategy. Taking the battery out of the smoke detector and adopting a ‘wait and see strategy’ is nothing short of reckless.”

It has been estimated that ninety percent of a company’s carbon footprint comes from the supply chain. Some of the tools that are used to provide visibility into the supply chain can also provide data about carbon usage, especially from suppliers, as we see in the article by Tim Albinson.

We are keenly aware that today’s financial professionals are already collecting volumes of information for various compliance reasons and that collecting even more information for new compliance reasons would present a professional burden.
 
But there is another way to think about it.

The best organizations create a culture of life-long learning and professional growth so that employees can adapt to new requirements. In an era where innovation is being hailed as the only sustainable advantage, companies must learn to welcome the unknown and develop a competency in gaining new insights and skills in this changing market.
  
That is exactly what we encourage AFP members to do. The most prepared individuals in any organization are the ones who welcome the unknown and who keep their skills up-to-date in a business environment that is likely to include many changes in the future.

James A. Kaitz
President and CEO
Association for Financial Professionals

Copyright © 2008 Association for Financial Professionals. All Rights Reserved.