There is a renewed focus on carbon markets following a series of reports that highlight the economic and social environment implications of climate change, particularly post-Hurricane Sandy, Investment Week's Climate Change Conference was told last week.

Dr. Tauni Lanier, managing director of EcoCapital and adviser to Meteor Asset Management in the U.K., referred in particular to research by the International Energy Agency and climate change experts such as Bill McKibben of 350.org, who calculate that 80 percent of the proven fossil fuel reserves need to stay in the ground for us to have a 50-50 chance of keeping global temperature rise below two degrees Celsius, the point at which scientists say climate destabilization occurs.

Further studies by Price Waterhouse Coopers show that, since 2000, the rate of decarbonization of the global economy has averaged 0.8 percent annually. This is a fraction of the 5.1 percent reduction required to keep global warming at the two degree level.

A price on carbon is one way of tackling the problem, and Dr. Lanier pointed out that there continues to be confidence in the legitimacy of the carbon markets, although this tends to be at a regional rather than international level. The Bank of Japan is currently looking at establishing a market, as are South Korea, South Africa and Brazil, as well as regions in the United States.

Additional signals on climate change progress include the growing call for accountability of a company's use of natural resources, according to Dr Lanier. She cited the example of Puma, which last year became the first company in the world to put a value on the environmental impact caused by greenhouse gas emissions (GHGs) and water consumption along its entire supply chain used to produce its sports shoes and clothes.

Puma and its parent group PPR, which owns luxury brands ranging from Gucci to Stella McCartney, made a commitment that, within four years, half its international collections will be manufactured using more sustainable materials such as recycled polyester, as well as ensuring its suppliers develop more sustainable materials and products.

In addition, the Rio+20 conference saw indications of commitment by the financial sector to integrate natural capital considerations into their financial products and services. The Natural Capital Declaration was signed by the chief executives of 39 banks and insurance companies.

Helping these efforts are organizations such as the World Business Council for Sustainable Development (WBCSD), which offers guidance to companies on how to incorporate ecosystem valuations.

Photo of Hurricane Sandy at a New Jersey Pier provided by Master Sgt. Mark C. Olsen/U.S. Air Force/New Jersey National Guard via Wikimedia Commons.

This article is reprinted from Business Green with permission. It first appeared on Business Green's sister site Investment Week.