Ceres, the Boston-based activist investor group, has joined governments, trade organizations and global investors in calling for automakers to measure and disclose their products' greenhouse gas (GHG) output. Autos account for 10% of global carbon emissions, according to International Energy Agency figures cited by Ceres. Despite this, "it is extremely difficult for investors to assess properly the risks and opportunities posed by climate change policy to individual companies," according to Ceres' new report.

Shareholder and environmental advocacy groups have long called for better transparency and more disclosure of environmental, social, and governance (ESG) performance. Now state and federal governments are poised to require automakers and other industries to report their GHG emissions. Environmental Leader reports that a new EPA rule will affect 13,000 industrial facilities, including chemical plants, utilities and the paper industry, as well as automakers. According to the EPA, these sources account for as much as 90 percent of greenhouse gases emitted nationwide.

The Ceres report, "Global Climate Disclosure Framework for Automotive Companies," provides guidelines for automakers' reporting efforts. (KLD's Elizabeth Horan Edgerly and Alex Lamb reviewed and commented on a pre-release draft of the report.) It sums up the limitations of current reporting by the auto industry:

" - Information provided is unrelated to core business aspects (e.g. disclosure that focuses on greenhouse gas emissions from company operations as opposed to vehicle usage). - Lack of quantitative or comparable data. - Company strategy and technology choices are unclear. "As a result, it is extremely difficult for investors to assess properly the risks and opportunities posed by climate change policy to individual companies, and to understand the manner in which auto companies have structured their business strategies and R&D plans to reduce greenhouse gas emissions from their vehicles."

Global trends heighten the urgency of building cleaner cars. "The world's car fleet is expected to triple by 2050 with 80 percent of this growth in developing economies," according to Achim Steiner, executive director of the U.N. Environment Program, as quoted by James Kanter in the New York Times. In recognition of the worldwide scope of the problem, Ceres developed its guidelines in conjunction with investors' organizations in Europe and Australia/New Zealand. Together, these organizations represent investors with trillions of dollars in funds under management.

Despite this, the US auto industry and its supporters are engaged in a more parochial fight over states' right to regulate auto emissions. "Global warming is not unique to California," said Michigan Senator Carl Levin, as he argued for Congress to deny states the power to set their own GHG emissions rules. California has indicated that it would accept this, but only if federal standards are as stringent as those proposed by state regulators.

The Los Angeles Times notes that struggling General Motors, which actively fought emissions regulations in the past but has recently requested billions from taxpayers, has now "taken a quieter role in the debate." As the industry faces a more-active EPA and an uncertain future, downstream stakeholders like states – and shareholders – could drive a more active response to the challenge of climate change.

Click here to download the complete Ceres report.

Also see this EPA report on US automotive fuel efficiency trends from 1975 to 2008.