"Investors ignore environmental issues at their own peril," said Duncan Austin, WRI economist and co-author of the report. "Environmental issues can have a significant impact on a company's bottom line and stock price."

The report looked at 16 leading oil and gas companies.

Unocal, Occidental Petroleum and Repsol YPF all stand to lose more than 6 percent of shareholder value as global warming and drilling access issues unfold over the next decade, the report said.

For example, the international Kyoto treaty that seeks to reduce greenhouse gas emissions could eventually dampen sales of oil, which is a major cause of the heat-trapping gases.

KYOTO SAID A FACTOR

The Bush administration has rejected the treaty but Japan, Europe and Russia have embraced it. Meanwhile, nearly a dozen U.S. state attorneys general have called for a national program to set specific targets to reduce greenhouse gas emissions.

"Even without U.S. participation in the (Kyoto) protocol, U.S.-based companies could be affected by it," the study said. "Changes in the global oil market, transmitted by price, will be felt throughout the industry."

In contrast, Burlington Resources, Sunoco and Valero Energy are relatively insulated against these environmental issues and should see little or no change to their shareholder value, the report said.

Another risk to balance sheets is growing opposition to drilling in environmentally sensitive areas such as the Arctic National Wildlife Refuge, the think tank said.

ChevronTexaco, Conoco, Phillips Petroleum, TotalFinaElf, Apache Corp, Repsol, Occidental and Unocal have a larger share of their oil and natural gas reserve in environmentally important areas, and are more at risk, according the report.

"Past troubles encountered by Texaco in Ecuador, Shell in Nigeria and other companies may be a precursor to future, more systematic difficulties," it said.

Exxon Mobil, Royal Dutch/Shell Group, Burlington and Eni Spa have few of their energy reserves on environmentally sensitive lands and offshore waters.

DISCLOSURE LIMITED

The report found that energy companies have made limited disclosure on the relevance of environmental issues on their future financial performance.

"At a time when investors have significant doubts about the quality of information put out by companies, this type of objective information and analysis is exactly what investors need to make accurate judgments about the value of their investments," said WRI President Jonathan Lash.

BP, Conoco and Phillips were the only companies reviewed that indicated in their annual reports to shareholders that climate change policies may have an impact on future business operations, according to the study.

"However, no company attempts to quantify in financial terms the potential environmental risks that it faces," the report said.

Energy companies are not the only ones to face financial risks linked to the environment.

On Monday California's governor signed a landmark law requiring automakers to limit carbon dioxide emissions and other pollutants. Gasoline fumes from cars and trucks are a major cause of greenhouse gas emissions.

The auto industry has vowed to dismantle the California measure in federal court by invoking federal laws that reserve for Congress the power to set fuel economy standards.