"What’s
New in Sustainability?" Several new and significant developments through the month of April that increase attention on Environmental Governance:
Upcoming Event: ESG: Sustainable Business, Responsible Investing - May 14 – San Diego, CA – Mike Wallace will be discussing the role Investor Relations plays in the success of an integrated sustainability program. Recent Publication: Modern Due Diligence: Opportunities and Challenges in the Green Economy – American Bar Association (ABA) Environmental Disclosure Newsletter, March 2009 Preparing for the Carbon Disclosure Project May 31st is the deadline for companies to
respond to this year’s Carbon Disclosure Project’s Information Request, which
was sent to over 3,000 companies worldwide. Please contact Wallace Partners for
further details. Corporate Directors and Officers Predicted to Face Liability Related to Climate Change ACE Insurance, a provider of D&O insurance, released a report entitled “Climate Change Is Heating Up D&O Liability”. The report states: “The question is no longer whether there will be actions arising out of how a company and its leadership assess, quantify, and disclose climate change risks, but rather…when it will be lodged against directors and officers.” The report concludes: “Climate-change-related litigation against companies has already started, and several settlements have already set unprecedented and high standards for detailed management disclosure and analysis under existing laws. Where management disclosure duties exist, liability exposure for directors and officers exists as well.” Carbon Footprints of Mutual Funds Now Assessed Environmental researcher, Trucost, published the first carbon footprint ranking of mutual funds. The report examined 75 major equity funds and 16 sustainability/socially responsible investment funds with a combined value of $1.55 trillion. These funds own shares in thousands of publicly traded companies, and the study highlights the level of exposures posed by emerging carbon regulation and the ensuing cost of carbon. Trucost's analysis of 91 funds will help investors gauge how emissions laws could affect a fund's holdings, and will also result in more pressure on the companies in those funds to measure, manage and report carbon emissions data. Investors Addressing Climate Change in All Asset Classes In response to investor demand, a handbook was released to help "pursue
climate-friendly investments, mitigate exposure to climate risk, and engage
stakeholders to improve climate-related performance across the range of
investment opportunities" for all asset classes, according to Social
Funds. Opportunities were identified in the following types of assets: stocks,
bonds, private equity, real estate investment, private infrastructure
investment, commodities markets, and hedge funds. The handbook is a guide to
help companies understand what investors and the financial community are
seeking in the way of “sustainable companies”. Reporting Under UN Global Compact Increased 25% since 2007 The UN Global Compact Annual Review 2008, its largest ever survey, found that more companies than ever before are now disclosing their practices under the Global Compact’s unique mandatory disclosure framework, also known as the Communication on Progress (COP). More than 1700 COPs were submitted in 2009, marking a 25 percent increase over 2007. At the same time, more than 400 business participants were removed in 2008 for repeated failure to communicate progress, bringing the total number of companies removed from the Global Compact to over 800. Company Best Practices for Sustainability Reporting Announced The Ceres-ACCA program, now in its eighth year, awards best
practices in reporting on sustainability issues by North American
organizations. The program is also designed to provide guidance to other groups
and companies that are publishing or intend to publish sustainability or
corporate social responsibility reports. The winners were selected by an 11-person
independent panel of judges representing a variety of sectors including
nonprofit, corporate and investment companies. Criteria focused on
completeness, credibility, and effectiveness of communication. Winners included
General Electric, Dell, Symantec, and Seventh Generation. New York Attorney General to CEO: Potential Environmental Liabilities Must Be Disclosed On May 4, New York Attorney General Andrew Cuomo sent a letter to David J. O'Reilly, Chairman and Chief Executive Officer of Chevron, requesting information related to the company's involvement in pending environmental litigation in Ecuador estimated to be as high as 27 billion dollars. The letter stated that: “Given the fact that both New York State and New York City public pension funds hold substantial Chevron shares…shareholders also have a right to know what contingencies, if any, have been taken by Chevron in recognition of a possible adverse ruling in the litigation.” Cuomo asked Chevron to submit the following information to its Investment Protection Bureau:
Bloomberg L.P., a leading information-services and media company, has been approved as a Ceres network company by the Ceres Board of Directors, citing the company's commitment to sustainability disclosure and setting goals to reduce its environmental impact. Bloomberg is the newest of more than 80 companies that have joined Ceres, a leading coalition of investors, environmental groups and public interest organizations working with companies to address sustainability challenges such as global climate change. IIGCC Planning a Report on Climate Change Activities of its Signatories The Institutional Investors Group on Climate Change (IIGCC)
will soon be releasing an update on the climate change activities of its signatories - managing more than $3 trillion in assets. The results, which are to be
published in the spring, will highlight best practices and share practical
actions regarding integrating climate change into investment processes. The
survey results will also allow investors to measure their progress over time
and benchmark themselves against their peers. National Top 50 Power Purchasers The U.S. Environmental Protection Agency (EPA) has released its updated quarterly ranking of the Top 50 Green Power Purchasers in the United States. The 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. 2009 Q1 Ethical Rankings Released A quarterly ethical ranking covering a universe of 541 multinationals within 18 sectors was released. The ranking uses an ethical quotation based on quantification of qualitative data among 45 criteria including labor standards, waste management, product social utility or human rights policy. Most Environmentally and Socially Controversial Companies Announced A recent report highlighted ten firms based on each firm's exposure to controversy, reach of news sources, the frequency and timing of news, and the type of news. The report indicated the most controversy regarding the following three issues:
U.S. EPA: Greenhouse Gases Endanger Public Health Announced shortly before Earth Day, the U.S. EPA finding, a response to the scientific review ordered by the U.S. Supreme Court two years ago, clears the way for the agency to regulate greenhouse gases under the Clean Air Act. The EPA analyzed six gases -- carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride -- and concluded their concentrations are at historic levels because of human activity. Obama Envoy: High Carbon Goods and Services Will No Longer Be Possible According to a report in the Financial Times, businesses must not sink money into high-carbon infrastructure unless they are willing to lose their investments within a few years, the US lead negotiator on climate change has warned. In the Obama administration's starkest rebuke yet to industry over global warming, Todd Stern, special envoy for climate change at the state department, said "high-carbon goods and services will become untenable" as the world negotiates a new agreement to cut carbon emissions and regulations on efficiency for cars, buildings and electrical equipment, become enacted worldwide. Stern added: "How good will the business judgment of companies that make high-carbon choices now look in five, 10, 20 years, when it becomes clear that heavily polluting infrastructure has become deadly and must be phased out before the end of its useful life?" Wallace Partners is actively speaking on environmental governance and sustainability in the coming months. We invite you to join us at the following upcoming events:
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