A note from Mike Wallace:

I just returned from the 19th Annual SRI in the Rockies. While the economy struggles, the recognition and importance of sustainability remains high on the agenda of shareholders, corporations, employees, customers and other important stakeholders. SRI in the Rockies has grown significantly in numbers and influence over the past 19 years and this year was no exception with presentations and representation from some well-known financial institutions, including Goldman Sachs, TIAA-CREF, CitiGroup Smith Barney, ClearBridge Advisors/Legg Mason, RiskMetrics Group, Dow Jones and FTSE.

Environmental Governance - Leveraging existing corporate governance systems to respond to the growing market demand for sustainability information.

Whether you have an existing sustainability program or are just beginning to contemplate one, Wallace Partners can help you focus your efforts in a manner that meets your business needs while addressing your most influential stakeholders' interests.

Here are some questions we can help you answer:

• What are the most important sustainability criteria for your industry and your company?
• Is your sustainability performance being accurately communicated by your company, within the market and among your stakeholders?
• Are your departments (EH&S, IR, HR, PR, etc.) aligned and working together to address the growing demand for sustainability information?
• How do you compare with your competitors on sustainability?
• What do your stakeholders really want to know about your sustainability performance?

Shareholder Interest in Sustainability Continues to Increase

The latest controversies to hit the financial sector are rippling through the sustainability community as a call for increased 'responsibility', 'transparency', and 'accountability', words synonymous with sustainability and corporate social responsibility.

9,000 CEOs receive a $4 trillion incentive to address sustainability
An influential group of global investors has launched an initiative asking 9,000 listed companies to sign-up to international standards on human rights, the environment and anti-corruption measures. As shareholders in companies, these investors believe that sustainability is crucial to the long term success of these companies, as well as the investors’ own returns. These investors range from mainstream institutions, to state public pension plans, to religious organizations to the socially responsible investment community.

The 52 investors involved in this initiative manage around US$4.4 trillion in assets. The broader UN PRI coalition consists of more than 350 global institutions representing more than $13 trillion in assets. This is only a small portion of investors seeking to reward sustainable companies.

Extra-Financial Reporting
Fourteen of the nation’s largest institutional investors, including some of the country’s largest state pensions called on the Securities and Exchange Commission to require improved corporate climate risk disclosure and — for the first time — address a broader range of environmental, social and governance risks, or so-called “ESG” issues, in disclosure requirements.

Citing investors’ previous attempts to engage with the SEC on climate risk disclosure, and the growing number of businesses that are disclosing climate risks and climate change impacts on their financial performance and competitiveness, the letter lays out a need for deeper engagement with the SEC on disclosure issues. It also cites the 21st Century Disclosure Initiative as an ideal venue for such engagement.

Rankings, Ratings, and Indices

The growing interest in measuring sustainability performance continues to create new markets and market opportunities. 

Index Update
Indices like the Dow Jones Sustainability Index or the FTSE4Good are collections of companies that have met or exceeded certain sustainability performance criteria.  Two leading sustainability index providers – the FTSE Group and KLD Indexes – have entered into a strategic partnership which will include a rebranding exercise early next year. The rebranding is aimed to combine KLD's United States presence with FTSE’s presence in European sustainability indexes.

Ranking Update
Geneva-based Covalence published its quarterly ethical reputation ranking, giving the best ranked companies as well as those companies which have made the most progress in the 3rd Quarter of 2008. Covalence's ethical quotation system is a reputation index based on quantifying qualitative data, which are classified according to 45 criteria such as labor standards, waste management, product social utility or human rights policy. It is a barometer of how multinationals are perceived in the ethical field.

Corporate Reporting and the Ripple Effect

The growing interest in these issues at the top of the financial markets is creating a ripple throughout global supply chains. Whether you represent a public or private company, the demand for sustainability information is increasing from all directions – shareholders, customers, employees, etc.

Sustainability reporting doubled since 2005
Of the top 100 U.S. companies by revenue, 74 percent published corporate responsibility (CR) information in 2008 either as part of their annual financial report or as a separate document, up from 37 percent in 2005. Globally, 80 percent of the Global Fortune 250 companies now release CR data, up from 64 percent in 2005.

Thousands of Wal-Mart suppliers asked to measure and report
Wal-Mart held a supply chain summit in Beijing last month that involved CEOs of hundreds of suppliers, including Proctor & Gamble, FedEx, Lenovo, Kimberly-Clark, Coca-Cola and Newell Rubbermaid. Billed as one of the most ambitious private sector drives to reduce waste and pollution in China’s export-focused manufacturing industries, this is just the beginning of a global push by Wal-Mart. Their “Green Supply Chain Initiative” is aimed at working with individual suppliers on energy saving and other issues, and is expected to extend to other US and European retailers, covering another 20,000 factories.

How we can help

Wallace Partners offers a unique approach to assessing current conditions and integrating sustainability into organizations. We apply a methodology that builds on existing management systems, identifies unforeseen assets, and enhances operational efficiency. Our strategic approach will help you identify the financial and reputational benefits of measuring and strategically reporting sustainability performance data to priority stakeholders and the broader market. By identifying internal and external opportunities, we will help you lay the foundation for efficiently measuring and managing environmental, social, and economic performance, and disclosing sustainability information in a manner that:

• Increases business resiliency
• Reduces reputational risk
• Clarifies external perceptions
• Enhances access to investment capital, and
• Aligns with broader branding initiatives

We’ve recently helped clients achieve sustainability recognition through the Dow Jones Sustainability Index and the United Nations Global Compact.

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20% Discount – Corporate Water Footprinting –
San Francisco, Dec. 2 & 3. 
Wallace Partners supports this event and would like to offer you a 20% discount. Simply type csrw20 into the discount code box when booking online, or quote csrw20 when booking by phone or fax.

Upcoming Events

Nov. 19, 2008
Mike Wallace will be speaking at the National Investor Relations Institute (NIRI) – Orange County: Corporate Responsibility - The Flavor of the Month or the New Reality?

Jan. 26, 2009
Wallace Partners is working closely with the organizers of the 2009 VerdeXchange Green Marketmakers Conference, a California AB 32 inspired Clean and Green Energy/Technology Conference and networking event.