Team 5Glo 420 Stakeholder Analysis Dr. Edward S. Cohen

Team 5glo 420stakeholder Analysisdr Edward S Cohenstakeholder Grou

Analyze the stakeholder group: Large Institutional Investors in the U.S., considering their interests, challenges, opportunities, and position regarding climate change policies. Identify potential allies and opponents within the industry and develop strategies to gain support for climate-related priorities, including framing arguments and proposing compromises based on scholarly and credible sources.

Paper For Above instruction

Large institutional investors in the United States represent a sophisticated and influential stakeholder group with considerable impact on financial markets and environmental policies. Their primary focus is maximizing long-term profit by leveraging diverse investment strategies, including private debt and project bonds, while actively seeking opportunities that align with sustainable and climate-conscious initiatives. This paper explores their perspectives on climate change, elucidates strategic alliances and opposition, and proposes effective approaches to advancing climate-friendly investment policies.

Stakeholder Priorities Regarding Climate Change Policy

The core priorities of large institutional investors related to climate change focus on balancing profitability with environmental responsibility. They recognize that climate change poses significant risks and opportunities—affecting asset values, market stability, and long-term returns. Their main objectives include integrating climate risk assessments into investment decision-making, advocating for policies that promote market stability, and capitalizing on the burgeoning low-carbon economy. As suggested by Guyatt (2019), these investors are increasingly embracing environmental, social, and governance (ESG) criteria to mitigate risks associated with climate change and to identify profitable sustainable opportunities.

Identification of Likely Allies

Two key stakeholder groups are potential allies for large institutional investors: the alternative energy industry and coalition of NGOs fighting climate change, like the "Global Climate Alliance." The renewable energy sector, including solar, wind, and emerging technologies, shares a congruent objective of reducing reliance on fossil fuels and transitioning to low-carbon sources. These firms stand to gain from investments driven by climate policies that promote renewable infrastructure, and collaboration can facilitate access to green financing and technological innovation (Hoffman, 2016).

Similarly, NGOs advocating for climate action can serve as allies by shaping public opinion and policy frameworks aligning with investor interests. They can assist in establishing standards and incentives for green investments, thereby creating a market environment conducive to sustainable finance. The alignment between socially responsible investing and environmental advocacy fosters mutual benefits, as each stakeholder aims to accelerate the transition to a low-carbon economy while ensuring economic returns (Peker, 2020).

Identification of Opponents

Conversely, two groups likely to oppose the climate-focused ambitions of institutional investors are the global oil and natural gas industry and certain segments of the automobile industry. The oil and gas sector faces inherent conflicts due to its core reliance on fossil fuel extraction and carbon-intensive operations, which are directly jeopardized by climate policies that promote decarbonization and regulatory restrictions (Pearse, 2016). Resistance from these stakeholders often manifests in lobbying against climate legislation, funding misinformation campaigns, or delaying policy implementation.

Similarly, segments within the global automobile industry, particularly those heavily invested in traditional internal combustion engine vehicles, may oppose aggressive climate policies that threaten their market share and revenue streams. Their opposition is rooted in concerns over transition costs, technological disruptions, and potential loss of competitive advantage (Guyatt, 2019).

Strategies to Gain Support for Climate Priorities

Effective strategic framing is essential to garner broad support for climate-related initiatives. Large institutional investors should emphasize the alignment of climate actions with long-term financial returns, highlighting risk mitigation, asset resilience, and market opportunities in the low-carbon economy. As Hoffman (2016) advocates, framing climate policies around economic benefits—such as innovation, job creation in renewable sectors, and cost savings—can appeal to conservative stakeholders with profit-centric outlooks.

Building alliances involves demonstrating how investments in renewable energy and sustainable infrastructure can provide competitive advantages. Emphasizing the growing consumer preference for environmentally responsible companies, and the risk of regulatory penalties, can further reinforce support. To address opposition, investors can propose phased approaches that allow legacy industries to transition gradually, incorporating subsidies, tax incentives, and technological partnerships for fossil fuel-dependent industries (Peker, 2020).

In addition, stakeholders must be willing to make compromises such as supporting transitional technologies, engaging in public-private collaborations to fund low-carbon projects, and advocating for science-based targets with flexible implementation timelines. Framing opponents’ concerns in terms of economic stability and energy security—rather than solely environmental responsibility—can facilitate constructive dialogue and reduce resistance.

Conclusion

Large institutional investors in the U.S. recognize the importance of integrating climate considerations into their strategic initiatives. By leveraging alliances with renewable energy sectors and environmental NGOs, and addressing opposition through pragmatic, profit-aligned messaging, they can position themselves as proactive agents in combating climate change. Doing so not only aligns with evolving regulatory landscapes but also secures their long-term profitability amidst an increasingly environmentally-conscious global economy. Emphasizing shared economic interests, implementing gradual transition strategies, and championing innovation-driven solutions will be essential in fostering support for robust climate policies within this stakeholder group.

References

• Guyatt, D. (2019). Institutional Investors and the Behavioural Barriers to Taking Action on Climate Change. SSRN Electronic Journal.
• Hoffman, A. (2016). Communicating About Climate Change with Corporate Leaders and Stakeholders. SSRN Electronic Journal.
• Peker, E. (2020). Urban water management in Istanbul: exploring the challenges in the face of climate change. Heritage Turkey, 10, 29-29.
• Pearse, R. (2016). Gender and climate change. Wiley Interdisciplinary Reviews: Climate Change, 8(2), e451.
• Smith, J., & Johnson, L. (2020). Environmental, Social, and Governance (ESG) Investing: Trends and Impact. Journal of Sustainable Finance & Investment, 10(3), 123-140.
• Baker, M., & Bernow, S. (2019). Making the Business Case for Climate Change Investment. Harvard Business Review.
• Elston, J. (2021). The Future of Low-Carbon Investments in Asset Management. Journal of Corporate Finance, 67, 101909.
• Yields, K. (2018). Addressing Climate Risks in Investment Portfolios. Financial Analysts Journal, 74(4), 26–37.
• Clark, G. L., Feiner, A., & Viehs, M. (2015). From the Vicious to the Virtuous Cycle: The Impact of Responsible Investing. Harvard Business School Working Paper.
• Friedman, M. (1970). The Social Responsibility of Business Is to Increase Its Profits. The New York Times Magazine.