February 2009 Newsletter A note from Mike Wallace: This week, approximately 150 sustainability-related shareholder resolutions were announced. These resolutions came from large institutional investors and faith-based groups. Small and large companies were targeted, including some of the biggest names in the financial, energy, pharmaceutical and retail sectors. This week’s announcement of 2009 sustainability shareholder resolutions had a twist, though. The ICCR has partnered with TruCost to make Climate Risk Profiles publicly available for each company. Companies are now ranked by sector in a searchable list. The list highlights whether companies are voluntarily disclosing carbon emissions data. We are tracking market and regulatory changes related to sustainability Sustainability becomes
increasingly linked World Bank and UN Push to Institutionalize A new report by the World Bank’s IFC, the United Nations
Global Compact, and the Swiss government finds that although the financial
industry understands the necessity of developing methodologies and tools that
examine environmental issues in the investment process, it is still not
standard practice.
The 2008 Who
Cares Wins report urges the financial industry to advance efforts to integrate
environmental, social, and governance (ESG) issues into mainstream investment
decision-making and ownership practices. If they do not, consequences of
climate change could fuel another financial crisis.
"Though current turbulence
in financial markets may tempt investors and companies to think of
environmental and social issues as tomorrow's problem, we believe that urgent
and wholehearted action is warranted not in spite of, but precisely because of
the market dynamics observed in the past months." Rachel Kyte, IFC Vice President for
Business Advisory Services,
Investors See Green Technology as the According to latest survey on environmental
investing by Allianz Global Investors AG (AllianzGI), one of the world’s
largest asset management companies, Americans see a golden age for green
investing. Key survey
findings:
·
Environmental
technology has the potential to be the “next great American industry”
·
Despite
the sluggish economy, investors are generally optimistic and ready to put their
green to work
·
78
percent of investors, according to the survey, believe we are likely to see
more policies to promote business investment in the environment under President
Obama
·
58
percent say Europe is ahead of the U.S. when it comes to addressing
environmental problems
Norway Pulls $200 Private Investment on The Norwegian government has pulled its $200-million investment in Toronto-based Barrick Gold
Corp. after an ethical review by the country's public pension fund revealed
Barrick is causing severe environmental damage at its Porgera mine in the South
Pacific nation of Papua New Guinea.
The Norwegian government's Council on Ethics said
the move was prompted by the "risk of accumulation and buildup of heavy
metals, especially mercury, in the environment. Pollution from the Porgera mine
will potentially have serious negative consequences for human life and
health."
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Dow
Jones Sustainability Index (DJSI)
The Dow
Jones Sustainability Index (DJSI) reconstituted its portfolio. The DJSI includes
companies in the top 20% on sustainability performance across 57 sectors. The
DJSI is one of the most well recognized sustainability indices and offers
companies another avenue to access investment capital - over $6B US. To get
listed, companies must be able to answer an industry-specific survey on
sustainability performance.
Powerful, new partnership exposes companies
The
Interfaith Center of Corporate Responsibility (ICCR), a faith-based
organization who mobilizes institutional investors on sustainability-related
issues, has teamed up with TruCost, a leading environmental researcher to create
a new public clearinghouse of environmental data. 150 companies with pending
sustainability-related shareholder resolutions are now profiled and ranked by
sector based on their respective greenhouse gas (GHG) performance. (Click here to see the ICCR-TruCost Climate Risk Profiles)
The 100 Most Sustainable Corporations Announced
at Davos
The Global
100 Most Sustainable Corporations in the World is a project initiated by Corporate Knights
Inc., with Innovest Strategic Value Advisors Inc. a leading research firm
specializing in analyzing “non traditional” drivers of risk and shareholder
value including companies’ performance on social, environmental and strategic
governance issues. The
accompanying research shows that sensitivity to environmental issues,
particularly for the extreme performers, may enhance returns of an active
investor strategy over time.
Most Environmentally and Socially Controversia
l A recent report listed the top
ten most environmentally and socially criticized companies in the following
categories:
Rankings are based on RepRisk’s Reputational
Risk Index. These companies have been scrutinized by the media and NGOs on
environmental, human rights, labor and corruption practices.
EPA Ranks Companies on Green Power Purchases
The U.S. EPA’s Green Power Partnership works with a wide variety of
leading organizations — from Fortune 500 companies to local, state and
federal governments, and a growing number of colleges and universities. Their Top Partner Rankings highlight the annual green power purchases of leading
organizations within the United States and across individual industry sectors.
Covalence Updates Annual Ethical
Rankings
Covalence recently published their annual Ethical
Rankings from a study of over 540 companies across 18 different industries. They used
data from 2002 to 2008 and ranked companies according to waste management,
labor standards, environmental impact of production, information to the
consumer, human rights policies, plus 40 other criteria.
***
CSR Reporting Continues to Grow; North America
Lagging
The National Investor
Relations Institute (NIRI) and the Bank of New York Mellon recently collaborated on a
comprehensive global survey of investor relations practices. The survey looked
at the practice of CSR Reporting, which includes social, environmental, and
economic sustainability factors.
Among the most important findings, the survey showed
that:
·
43%
of overall respondents' companies publish a CSR (Corporate Social
Responsibility) report,
·
North
America lags the rest of the world at 28%.
·
17%
of the respondents are planning to publish a CSR Report
2009 Projected as “The Year of Enterprise Carbon
Accounting”
According to Groom Energy, 2009 will be the “Year of
Enterprise Carbon Accounting,” as their new report estimates the number of
firms disclosing greenhouse gas emissions will triple in the next two years from
the 3,000 companies who currently report this information.
***
ICCR
Releases 2009 Shareholder Resolutions
The Interfaith Center
on Corporate Responsibility (ICCR) announced the 2009 shareholder resolutions related
to sustainability. The ICCR has over
180 members,
representing approximately $100 billion dollars. The ICCR’s resolutions are
often backed by institutional investors, such as state pension funds.
For the first time, the ICCR made the list of
companies available to the public, free of charge. The list is searchable and
is augmented by TruCost’s Climate Risk Profile for each
company.
The approximately 150 companies targeted include
small firms, mid-size firms, and industry leaders across sectors.
***
Obama Strengthens Environmental Regulations
President Obama has promised new U.S. leadership in the fight against global
warming as he announced a series of steps aimed at making American cars more
fuel efficient and reducing greenhouse gases, including a directive to the
Environmental Protection Agency to reconsider granting California and other
states waivers to set their own strict regulations on auto emissions.
Investors Demanding “Green” U.S. Stimulus
As reported in the Wall Street Journal, some of the nation's biggest
investors are encouraging Congress to strengthen economic recovery proposals
that could give a substantial boost to energy efficiency and ailing renewable
industries.
The group of 44 investors included state treasurers,
pension funds and major asset managers representing nearly $1.7 trillion in
assets. They called for
longer-term economic incentives and warned lawmakers against encouraging
particular sectors.
Denmark Requires CSR Reporting
Denmark adopted a law requiring the 1100 largest
companies in the country to report on their corporate responsibility efforts.
The new bill, passed by a vast majority of the Danish parliament, makes it
mandatory for publicly listed companies, state-owned companies and
institutional investors to include information on CSR in their annual financial
reports.
***
Company News and Upcoming Events
Wallace Partners in the New York Times
Our client ValleyCrest Companies was recently noted
in a February 2009 New York Times piece entitled “A Tech Mogul’s Green Thumb” – highlighting the
investments of Michael Dell’s MSD Capital and the “green” aspects of
ValleyCrest’s business.
Financial Times’s “Sustainable Business, Responsible Investing”
Conference
Wallace Partners is supporting the “Financial Times:
Sustainable Business, Responsible Investing: Where Corporations &
Investors Connect on ESG Issues” at the Altman Building in New York
City on March 2, 2009. As a valued
Wallace Partners reader, you and your colleagues are entitled to a 20%
discount. Use the Wallace
Partners Code FTCSRWP Details and registration can be found
through the link:
National Investor Relations Institute (NIRI) –
CSR/Sustainability and Investor Relations
Wallace Partners will be presenting on the current market
conditions and explain how shareholders and companies are engaging on
sustainability through the IR/CFO office. A detailed description of the event and registration details are
provided on the NIRI site. Non-NIRI Members are welcome to join this call.
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