August 2008
Response of Board of Directors
In response to the activism of shareholders, company boards are now formally addressing environmental and corporate social responsibility issues.

As recently reported in the Wall Street Journal, amid rising investor worries over global warming and shrinking natural resources, directors are keeping a closer watch on environmental issues.  About 25% of Fortune 500 companies now have a board committee overseeing the environment, compared with fewer than 10% five years ago.

In 2008 some 3,000 companies are expected to publish a Corporate Social Responsibility (CSR) report to document their policies and performance on key issues, including environmental and social activities. Of these, around 750 will include a third-party assurance statement addressing the report’s credibility and completeness.

Carbon Emissions Reporting
As boards address these issues and consider the potential environmental risks, more companies than ever are trying to measure their carbon footprint. Unfortunately, the current set of measurement tools are leading to inconsistent and potentially meaningless results.

Despite growing efforts to measure their carbon emissions, almost 75 percent of firms' carbon footprints are typically going unrecorded, according to a new study from Carnegie Mellon University. Report authors are urging companies to embrace new methods for following the trail of dangerous carbon emissions that are responsible for much of the world's global warming threats.

Even more concerning, a recent study by the University of Washington and Vanderbilt University found that nearly all current models used to measure a company’s carbon footprint yield drastically different results, even when controlling for the same input values.

According to the study, results varied by as much as several metric tons of carbon dioxide (CO₂) emissions per activity, and the majority of calculators make it difficult to compare the tools because they fail to disclose information about the different methods and estimates used.

July 2008
A Call for Standards
Market confusion and uncertainty is resulting in a call for standards from business and their shareholders.

What are we hearing from companies?
According to a new report from The Ethical Corporation Institute, “a lack of consistent, comparable data on greenhouse gas emissions from the world’s largest firms prevents investors, policy makers and the public from getting a clear picture of performance, a study has found.”

The study assessed the methods used to measure and to verify emissions data, approaches to setting absolute and intensity emissions reduction targets and reporting rules in different countries. Here are a number of key findings and recommendations:

• “A great deal of inconsistency" exists in firms’ reporting, making it difficult to compare performance even between companies in the same sector
• Firms report emissions and set targets in different ways. Half of firms report both absolute emissions data and emissions intensity data, 40% only report absolute emissions and the remainder do neither
• Industry bodies need to bring companies together to establish a common framework for reporting within the sector to enable comparison
• Government should collaborate more effectively to ensure performance can be compared worldwide

A new report from EIRIS outlines the effectiveness of companies’ risk mitigation of climate change.  Key findings include:

• Many large cap companies at risk:  Over a third (35.6%) of companies in the global 300 are high or very high impact for climate change (representing over USD 6.8 trillion market cap)
• High-risk companies have taken initial steps but translation into coherent strategy is less apparent 84% of high risk companies have a corporate-wide climate change commitment. But only 14% link board remuneration to climate change strategies and only 25% publish a long-term strategic target to reduce emissions
• Emissions disclosure by high risk companies is high but unreliable 81% disclose either absolute or normalized data but only 9% disclose the scope of their emissions against the GHG Protocol

Investor Coalitions

June 2009
Shareholder Pressure Leads to Increased Carbon Disclosure

Chevron agreed to voluntarily track its products’ carbon contents as a coalition of shareholders led by Interfaith Center on Corporate Responsibility (ICCR) representing over 100B in capital withdrew their resolution. Chevron’s decision comes in the wake of growing shareholder support to climate change-related shareholder resolutions in the energy sector:

• 52% of shareholders at Idaho Power voted in favor of the |company establishing greenhouse gas emissions reduction goals and report
  on its strategy to meet its targets.
• Over 30% of ConocoPhillips shareholders voted to make the company
  account for the potential environmental damage created by its
  Canadian tar sands development.
• Nearly 46 percent of Massey Energy’s shareholders recently voted
  in favor of a climate change resolution.

Additionally, Home Depot has been the target of a shareholder resolution, filed by the $20 billion Connecticut Retirement Plans and Trust Funds, asking that Home Depot address their carbon footprint and report findings and progress to shareholders. The resolution also was supported by advisory firm RiskMetrics Group (RMG) and other investors in the $7 trillion Investor Network on Climate Risk. While the resolution did not pass, these shareholders plan to engage in continued dialogue with Home Depot and are looking at other firms in the construction sector as well.

Climate Disclosure Standards Board (CDSB) Announces
Proposed Framework

The Climate Disclosure Standards Board (CDSB) recently released a standard procedure for companies to follow when reporting climate change data. The proposed framework, supported by coalitions such as the Carbon Disclosure Project (CDP) and Ceres, aims to improve reporting in areas such as greenhouse gas emissions.

Investors, Insurance Firms and Environmental Groups:
Climate Risks Not Adequately Addressed

Flood-hazard maps, zoning laws, building codes and insurance rates in the United States do not accurately reflect the risk of climate change to coastal cities, a report published by the Heinz Center and Ceres found. The report was backed by Travelers and Fireman’s Fund, Calvert Investments, the Nature Conservancy and other groups.

Sharlene Leurig, who manages the insurance program at Ceres, said storms in recent years had caused such immense economic losses along the coasts that many insurance companies had limited or even halted underwriting there.

Given that half of Americans live in coastal counties, “that is not a sustainable business plan,” Ms. Leurig said, adding, “They are stepping away from a sizable portion of their business.”

May 2009
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:

• What is its estimate of possible damages if found liable?
• What if any disclosure has been made of these estimates?
• And, what if any reserves have been established in contemplation of such damages being assessed against Chevron?

Bloomberg L.P. Joins Ceres Company Network

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.

April 2009
Corporations Join Emerging Climate Change Coalition

The four-month-old company-led coalition Business for Innovative Climate and Energy Policy (BICEP) has added the following new members: Gap Inc., eBay and Symantec. BICEP’s founding members include Levi Strauss & Co., Nike, Sun Microsystems, Starbucks and The Timberland Co. The New York Times is reporting that BICEP is lobbying for Congress to pass by year's end a mandatory, economy-wide cap-and-trade program to slash U.S. greenhouse gas emissions to 25 percent below 1990 levels by 2020.

March 2009
Private Equity Firms Sign on to Principles for Responsible Investment
The Private Equity Council (PEC) has announced that its members have adopted a set of environmental, social and governance (ESG) guidelines in accordance with the United Nations' Principles for Responsible Investment (PRI). Members of PEC include many of the world’s best-known private equity firms, including The Blackstone Group, The Carlyle Group, and Kohlberg Kravis Roberts & Co.

U.S. Companies Face Record Global Warming Resolutions
CERES and the Interfaith Center on Corporate Responsibility, who collectively represent nearly one trillion dollars of capital, named nine companies to a Climate Watch List, citing concerns that the firms are lagging behind their industry peers and are potentially undermining their long-term competitiveness in responding to the business challenges from global climate change. Investors have filed shareholder resolutions with eight of the nine companies—and 49 other businesses—aimed at improving their focus and attention to the financial risks and opportunities from climate change.

February 2009
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.

December 2008
Investor Coalition Requests that Companies Join CEO Water Mandate
A group of sixteen investors, representing over 1.5 trillion dollars in assets, have asked the chief executives of 100 of the world’s biggest companies to join the CEO Water Mandate, part of the UN Global Compact. In a letter, the investors emphasized the importance of adopting a comprehensive approach to water management and reminded companies of the value of doing so in order to protect and foster their long-term investments.

November 2008
Five Major U.S. Companies Call for Congressional Action on
Climate Change,Clean Energy
Five leading U.S. corporations joined with Ceres today to announce the launch of a new business coalition, the Business for Innovative Climate and Energy Policy (BICEP), calling for stronger U.S. climate and energy legislation in early 2009 to spur the clean energy economy and reduce global warming pollution.

The group's key principles include:

• Stimulating renewable energy
• Promoting energy efficiency and green jobs
• Requiring a 100% auction of carbon allowances
• Limiting new coal-fired power plants to those that capture and store carbon emissions

The founding members of BICEP include Levi Strauss & Co., Nike, Starbucks, Sun Microsystems and The Timberland Company.

Trillion Dollar Investor Coalitions Unite on Carbon Reduction
Several trillion dollar investor coalitions announced their plan to issue a landmark joint statement calling on governments to reduce 50%-85% global GHG emissions cuts in developed countries by 2050 as recommended by the International Panel on Climate Change (IPCC). Signatories to the statement include CalSTRS and several large pension funds in Europe and Asia Pacific. Adoption of the emission cuts are believed to be accompanied by a global rollout of carbon cap-and-trade markets and carbon taxes.

Large Banks and Insurers Adopt Sweeping Climate Principles
Major financial institutions – including Credit Agricole, HSBC, Munich Re, Standard Chartered and Swiss Re – have adopted The Climate Principles, the first comprehensive industry framework for the financial sector in response to climate change.

These financial institutions have signed on to incorporate climate change-related risks and opportunities in the development of investment products. Corporate banks will develop and implement a methodology for assessing the climate-related risks in their lending and investment practices. The institutions will also engage significant suppliers on climate change issues and work with them to reduce GHG emissions throughout their supply chains.

October 2008
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.

September 2008
Carbon Disclosure Project
The Carbon Disclosure Project (CDP) is the most influential shareholder initiative ever witnessed by the global markets. It has organized 385 Signatory Investors representing over $57 trillion in assets under management. In 2008, CDP sent the request on their behalf to over 3,000 companies worldwide, requesting information on greenhouse gas emissions and the implications of climate change in terms of business risks and opportunities. The responses have been collected and were reported publicly in September.

• Over 1500 of the world’s major companies reported their greenhouse gas emissions and climate change related strategies in the updated Carbon Disclosure Project (CDP).
• Global corporations view climate change as a driver of risk and opportunity and have cited clear regulation as key to managing the impacts, in this year’s findings from the CDP report.
• Despite the uncertainty with regard to regulation the majority of global companies are acting to reduce their emissions. 74% of Global 500 companies reporting to CDP are now reporting emissions reduction targets, showing companies are increasingly taking climate change mitigation seriously.
• As an indication of the mainstreaming of the CDP’s information, September saw the announcement of partnerships with Bloomberg to market the CDP information to investors and with PriceWaterhouseCoopers (PwC) to write and audit the reports.

Emilia Fazzalari of Bloomberg, said:

"CDP data on Bloomberg allows users to access information about carbon emissions of companies, helps investors to assess the potential regulatory impact on their investments, and creates greater transparency and more tools for Bloomberg customers to participate in the emissions trading markets."

“Companies need to measure and report their carbon emissions and be clear about how they are managing them. Unless they do so, they risk losing sight of the impact of climate change on the long-term financial health and future prospects of their business.”

August 2008
Resolution Activity
The number of investor proposals related to the environment nearly doubled between 2004 and 2008, RiskMetrics Group Inc. says. Many proposals urge increased board attention to the issue.

A coalition of investors and environmental groups claimed that climate change-related shareholder resolutions filed in the US this year had achieved breakthrough results, reflecting growing investor concerns over global warming.

Of 57 resolutions filed by a range of socially concerned investors, almost half were withdrawn after companies ranging from Continental Airlines to El Paso made commitments on setting targets for reducing greenhouse gas emissions and other issues.

May 2008
Increasing Shareholder Activism:
Exxon’s Shareholder Action
ExxonMobil’s major shareholders (including the Rockefeller family) were pushing for changes ranging from traditional corporate governance issues to climate change.  Over 30 percent of Exxon’s shareholders voted for specific environmental resolutions.

"ExxonMobil's go-slow approach in addressing greenhouse gas reductions and investments in renewable energy sources places long-term shareholder value at risk," said California State Treasurer Bill Lockyer, who serves on the board at CalPERS and CalSTRS, two of the nation’s public pension funds. "Instead of dragging its feet, Exxon Mobil should be taking the lead in providing long-term climate solutions."

• ExxonMobil braces for Rockefeller showdown – Fortune, May 27, 2008
• Oil giant ExxonMobil rejects call to split up boss's dual roles – Telegraph, May 30, 2008

Despite the inability of shareholders to obtain the votes for the ExxonMobil resolutions, these actions are part of a growing shareholder movement that is affecting Board responsiveness to shareholders.

"Boards are taking much more notice of these winning votes", says Fabrizio Ferri, an assistant professor at Harvard Business School and a co-author of Board of Directors’ Responsiveness to Shareholders: "Evidence from Shareholder Proposals. The study found that boards were almost twice as likely to make changes now, than in the 1990s. The authors found that the rate of implementation of shareholder proposals approved by the majority of voters almost doubled to 40% in 2003-2004 compared to 22% in 1997-2002."   
(Source: Dow Jones Newswire - May 14, 2008)

February 2008
Shareholder Resolutions on the Rise
Faith-based investor group ICCR has released their 2007 report detailing 313 shareholder resolutions filed at 208 companies throughout North America. Our analysis of the report shows that 54 of the resolution topics focused on the environment and climate change issues: quantifiable Environmental Governance criteria. We've summarized this data into a PDF document here. You can also click here to see ICCR's complete list of sustainability-related resolutions.

January 2008
Carbon Disclosure Project (CDP)
Monday, February 4 marks the release of the Carbon Disclosure Project’s 6th annual survey, which asks companies about their strategic plans to address carbon and greenhouse gas emissions.

This year the Project represents more than 350 institutional investors with combined assets of over $50 trillion. These investors are signatories to the letter that will land in the inbox of over 3,000 of the world’s largest companies. These signatories include the likes of Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, AIG, Barclays and HSBC.

Increasing Shareholder Interests
The CDP is one of several influential shareholder initiatives seeking greater disclosure on carbon and other environmental issues. These shareholder groups have many overlapping members, are growing in numbers and are coordinating their international efforts.

Responses to the CDP get significant distribution throughout this growing community of interested investors. Other interested stakeholders also use the CDP database to understand who is acting and not acting on the carbon question.

What You Need to Know:

• The CDP surveys will land in the CEO's inbox this week. For some it will be the 1st time;
  for others it will be the 6th.
• This survey typically circulates through a variety of departments (Finance, IR, Legal, PR/PA)
  before finding a department that will decide on an action - respond or discard.
• Many companies tend to ignore or minimize the significance of this request since it is not
  a regulatory requirement.
• The CDP maintains a historic collection of all responses, rates their adequacy and
  documents those who did not respond.
• It is easy for interested shareholders and other interested stakeholders to quickly compare
  and contrast the responses of all companies surveyed.
• The CDP is also asking about supply chain impacts, so even if you don't receive the survey
  your carbon footprint is being increasingly scrutinized.

Ratings, Rankings, & Indices

June 2009
GreenSeal Develops Ecolabeling for Restaurants

GreenSeal announced the development of the GS-46 Environmental Standard for Restaurants and Foodservices.  The new standard is based on life-cycle research, involving a comprehensive evaluation of the sources of environmental impacts including food, energy and water use and waste.

Top 48 Energy and Utilities Ranked Based on Sustainability

The Roberts Environmental Center of Claremont McKenna College (CMC) released a study that analyzed the top 48 U.S. energy and utilities corporations on the 2008 Fortune 1000 list.  Using the Pacific Sustainability Index (PSI), researchers scored companies based on the reporting, intent, and performance of environmental and social sustainability efforts. 

UK’s 60 Best “Green Companies” 2009 Announced

The Sunday Times released its second annual list of the 60 best “green companies” in the UK.  Companies are ranked more heavily on environmental performance, which accounts for 70 percent of the final ranking.

New Global Sustainability Fund Launched

TD Waterhouse launched the TDAM Global Sustainability Mutual Fund for institutional investors that include companies recognized for their leadership in sustainability.  Companies will be selected primarily from the Dow Jones Sustainability World Index.

Low Carbon Fund-of-Funds Created

Osmosis Capital, a London-based fund manager, has launched a new low carbon fund-of-funds with approximately 300M under management.  An estimated 500 funds operating in renewable energy and other low carbon technologies have been identified globally with 100 likely contenders for investment.

May 2009
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:

1. Impacts on Ecosystems/Landscapes
2. Impacts on Communities
3. Human Rights Violations and Corporate Complicity

“Best of Green” Winners Announced

TreeHugger announced its first annual “Best of Green” designations. The company looked at organizations in food, health, travel, transportation, science and design.

April 2009
S&P Examines Corporate Carbon Efficiency

Standard & Poor’s has launched a low carbon version of the S&P 500. The S&P US Carbon Efficient Index will track around 350 companies chosen for their carbon efficiency.  The index is partially based on carbon scores and partly on rules designed to ensure the new index tracks the S&P 500 as closely as possible.

New Sustainability Index Announced: TSI

The non-profit Center for Sustainable Innovation (CSI) announced today the release of a new model for measuring and reporting corporate sustainability performance. Referred to as the True Sustainability Index(TM) (TSI), CSI's model consists of only 15 indicators that sustainability managers can use to assess the full triple bottom line performance of organizations. The TSI will become another resource for stakeholders, such as investors, customers, employees, and activists, to understand, rate and rank the sustainability performance of organizations.

100 Best Corporate Citizens List

The CRO, in partnership with Forbes, released its tenth annual 100 Best Corporate Citizens List based on companies in the Russell 1000 index.  CRO described selected companies as those who are “doing all they can to bring their shareholders more value and make sure they are running places where employees are proud to work”.  CRO added that “with the nation and world in the depths of recession, companies are trying harder than ever to become more efficient, and have the right current policies for a healthy, prosperous future”.

Environment and Energy Awards

The Aspen Institute announced the winners of the second annual Aspen Institute Energy and Environment Awards, which will be presented at a special ceremony on March 27, 2009, during the Aspen Environment Forum.  The Aspen Institute Energy and Environment Awards recognize and reward excellence for those making a real contribution to innovation, implementation, and communication of energy and environmental solutions.  Winners range from world’s largest retailer, Wal-Mart to a start-up, A123 Systems.

“Companies That Care” Honor Roll

The Companies That Care Honor Roll released its latest Honor Roll that publicly recognizes and celebrates “all organizations that prize employees and are committed to community service”.

March 2009
Uptime Institute Announces Global Green 100 List
The Uptime Institute announced the corporations selected for its Global Green 100 list. The list highlights the significant energy efficiency achievements of global corporations operating major data centers. The list included exemplary Fortune 500 and InformationWeek 500 organizations with a demonstrated board-level policy and governance commitment to increasing energy efficiency and reducing the carbon footprint of their enterprise IT and data center operations.

Sustainability Regulations

"I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America."
- President Barack Obama (to Congress, February 25, 2009)

EPA Expected to Regulate Carbon Dioxide
The New York Times reported that the U.S. Environmental Protection Agency (EPA) is expected to act for the first time to regulate carbon dioxide and other greenhouse gases that scientists blame for the warming of the planet, according to top Obama administration officials.  EPA regulation is projected to include mandatory reporting of emissions into a database, which aligned to Obama’s public call for a cap-and-trade system and other energy and climate change legislation pending in Congress.

Lawsuit Forces U.S. Financing Agencies to Account for Climate
Environmental groups and cities won a settlement in a precedent-setting lawsuit will force two U.S. government agencies to address the global warming effects of their overseas financing activities.  After more than six years of litigation, the first case of its kind established important legal precedents related to global warming. Under the settlement, the Export-Import Bank, the official export-credit agency of the United States, will begin taking carbon dioxide emissions into account in evaluating fossil fuel projects and create an organization-wide carbon policy. Additionally, the Overseas Private Investment Corporation will establish a goal of reducing greenhouse gas emissions associated with projects by 20 percent over the next 10 years.

February 2009
Dow Jones Sustainability Index (DJSI) reconstituted its portfolio
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 to reputational risk
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 Controversial Companies Announced
A recent report listed the top ten most environmentally and socially criticized companies in the following categories:

• Emerging Markets;
• North America;
• Banks, Financial Services, and Insurance; and
• Utilities

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.

December 2008
New 2008 Sustainability Index Rankings
In a recent analysis of sustainability reporting in the financial sector, new 2008 Sustainability Index rankings for 2008 were released.  According to the report, ninety percent of the 30 largest banks analyzed in this report are voluntarily reporting on sustainability issues and more than half produce a fairly extensive formal sustainability report.

EPA Recognizes Water Efficiency Leaders
The U.S. EPA recently announced its 2008 Water Efficiency Leaders. A special category honored corporate and industry leaders.

Companies Cited For Failure to Align Sustainability to Performance and Take Leadership
on Climate Change
A recent CERES Report found that the boards of only 11 of the 63 companies analyzed in hear climate-specific updates, and just seven CEOs have assumed leadership roles on climate change initiatives. None of the consumer and technology companies examined tie related performance to the compensation of their top officers.

Industry leaders included technology and pharmaceutical firms. Industry laggards included restaurants, real estate, and travel and leisure.

Mindy Lubber, president of CERES, said:

"With or without a recession, climate change is a core business issue that all consumer
and tech companies should be focused on."

November 2008
Climate Scorecards Released for Electronic Devices
Greenpeace recently released its 8th edition of the Guide to Greener Electronics, which scores electronics brands on a tightened set of chemicals and e-waste criteria as well as on new energy criteria.

The ranking criteria reflect the demands of Greenpeace’s Toxic Tech campaign to electronics companies. The guide is just another example of how companies are being rated on their ability to produce “clean” products, recycle throughout their production process, and improve their governance policies with respect to both Climate and Energy.

Consumer Electronics Association Sustainable Practices Report
Similarly, the Consumer Electronics Association published a report that examines sustainable practices in all areas of 64 companies from 2004 to 2007. The report states that sustainable practices are just better business as improved product design allows for less packaging, increased recycling and energy conservation, and an increase in a product’s usability.

2008 Corporate Social Responsibility Index
The Boston College Center for Corporate Citizenship and Reputation Institute released a new ranking of 200 responsible companies based on its 2008 Corporate Social Responsibility Index. The rankings focused on public perception about company's corporate citizenship, governance and workplace practices. Google, Johnson & Johnson and Campbell Soup topped the list.

Global Environmental 60 Index (GE60)
KLD Indexes and Jantzi Research have collaborated to create the Global Environment 60 Index (GE60). The index will consist of companies that derive 50% or more of their business from products or services that relate to environmental themes. The GE60 is the first index planned in a series of five environmental, theme-based indices.

New Green Seal Certifications
Green Seal announced its new Laureate Program to offer Green Seal certification to companies awarding them with bronze, silver or gold. Companies will be evaluated in five areas:

1. Environmental management, performance, and compliance
2. Environmental impacts by category
3. Supply chain
4. Life cycle assessment
5. Product

The certification seeks to recognize companies for leadership in meeting comprehensive eco-friendly standards.

October 2008
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.

September 2008
Ratings Update
The world’s most influential sustainability ratings reviewed their listings in September.

• The Dow Jones Sustainability Index conducted their annual review. 33 companies were added and 25 companies were deleted from the index – increasing the number of companies from 312 last year to 320 this year. The Index, started in 1999, is weighted based on market capitalization, and changes are made every September based on the newest sustainability scores. The annual review is based on an analysis of corporate economic, environmental and social performance, and assesses corporate governance, risk management, branding, climate change mitigation, supply chain standards and labor practices.
• FTSE announced its 2008 Semi-Annual review of its FTSE4Good Index. Globally, 36 companies were added and 12 companies were removed from the index series. Additions and deletions to the index are based on transparent environmental and social criteria that represent global standards of good Corporate Responsibility (CR) practices, which continue to evolve over time, demanding continued improvement in corporate responsibility practices in order to gain or maintain inclusion in the index.

August 2008
Ratings, Ratings, and more Ratings
As we’ve seen in previous months, more rating mechanisms are being created to help stakeholders assess companies along with their environmental policies and risks.

In response the growing demand for sustainability investing tools, Dow Jones has partnered with SAM, a sustainability investment firm, to create four new sustainable, blue-chip indexes. The new indexes are designed to utilize sustainability both as a selection tool as well as weighting metric within investment portfolios, both in the U.S. and around the globe. 

The sustainability scores are derived from a comprehensive annual assessment of general, as well as industry specific criteria covering issues such as: corporate governance, risk management, emissions, water and energy consumption, human capital development and stakeholder relations.

July 2008
Ratings, Ratings, and more Ratings
As the proliferation of “green claims” continues, so do the ratings.  Here are a few of the latest updates:

New Climate-Based Index
KLD Research & Analytics, Inc. has marked the third anniversary of its Global Climate 100SM Index (GC100) – the first global index focused on solutions to climate change. The GC100 has returned 53% (15.24% annualized) from its launch on July 1, 2005 through June 30, 2008. The index holds a diversified group of companies that are leaders in renewable energy, clean technology & efficiency, and future fuels.

Sustainable Stock Index
The SB20 list, in its seventh year, consists of 20 public companies that are leading the way to a sustainable society.  The list consists of both large and small cap companies from around the world that either operate within the sustainability space, such as Green Building and Renewable Energy, or are “Corporate Pioneers” - companies with conventional products and services that are actively greening their product lines.

Ethical Ranking
Geneva-based Covalence is publishing today its quarterly ethical reputation ranking, giving the best ranked companies as well as those companies which have made the most progress in the 2nd Quarter of 2008. An overview of emerging and decreasing topics is also given.  Several dozen major corporations are reviewed by sector.

Sustainability Rankings for Consumers
ResponsibleShopper.org informs concerned consumers about problem corporate practices, action campaigns and ways to live greener in relation to more than 150 major consumer companies. In a major enhancement of the Web site, ResponsibleShopper.org now ranks companies in 27 industry categories from best to worst based on research focusing on such key issues as human rights, social justice, environmental sustainability and more.  In addition to attention-getting companies like Wal-Mart and Exxon, major consumer companies ranked by the new ResponsibleShopper.org site include such brand-name corporations as McDonalds, Toyota, Coca Cola, Disney, Hanes, and General Electric.

June 2008
Ratings, Ratings & more Ratings
A number of old and new ratings schemes continue to make their way into today’s sustainability headlines. While the topics, methodologies and lists vary widely, the common thread is the increasing interest in these types of ratings and the “sustainability story” conveyed to stakeholders. Here are a few of the latest:

Ethical Company Index
For the second year Ethisphere Magazine has published a list of companies that assesses business ethics and corporate responsibility. After examining 10,000 global companies, a panel of judges at the Ethisphere Institute selected 93 companies as the World's Most Ethical Companies.

Largest California Companies Scored on Sustainability
Cited in this month’s Environmental Leader was a report produced by the Roberts Environmental Center of Claremont McKenna College in 2007. The article highlights the difficulties companies and stakeholders confront as they attempt to measure and report sustainability performance. The report contains a compilation of scores evaluating the environmental and social reporting of California’s largest companies. The analysis finds that some companies, like Chevron, Hewlett-Packard and Walt Disney, publicized their sustainability on their Web sites, while others, like eBay, Google and Apple, rarely mentioned the subject, if at all.

Access to Medicine Index
The Access to Medicine Index measures and rates drug companies’ efforts to increase access to effective and affordable medicine. The Index ranks twenty of the world’s largest drug companies, offering investors and other stakeholders a new tool to rate the social responsibility record of these companies.

IT Companies Under the Radar
The Guide to Greener Electronics ranks the 18 top manufacturers of personal computers, mobile phones, TV's and games consoles according to their policies on toxic chemicals, recycling and climate change. First launched in August 2006 the Guide is now on its 8th edition and has been a key driving force in getting many of the companies to make significant improvements to their environmental policies.

UN Global Compact delists 630 companies
One path that many companies take on the sustainability journey is signing up to the UN Global Compact. It’s a voluntary initiative, but it does have some requirements around acting and reporting. Inaction recently resulted in a “delisting” of 630 companies from the UN Global Compact.

May 2008
Ratings, Rankings & Listings
In a report published by Moody’s Investor Services, the EU's climate change policies could erode profits made by power generators and energy-intensive industries, and have implications on their credit ratings unless safeguards are put in place.

• EU Utilities, Car Suppliers Face Moody's Downgrade on Emissions – Bloomberg, May 21, 2008

Companies are increasingly under scrutiny from third-party organizations that are publishing results on corporate environmental impacts. For instance, Climate Counts recently released their updated results for 2007, which identifies and ranks 56 corporations on climate change actions. These results are capturing the attention of the mainstream media and other influential stakeholders.

• Companies Improve Scores in Climate-Change Ranking – New York Times, May 7, 2008

The Climate Registry designates "reporters" as organizations that demonstrate their environmental leadership by voluntarily committing to measure, verify, and publicly report their greenhouse gas emissions to the Registry. Reporters consist of corporate, non-profit, and government entities. Founding Reporters are organizations that demonstrate outstanding environmental leadership by joining The Climate Registry prior to May 1, 2008, thereby supporting the Registry in its initial formation. As of May 31, 2008 there were a total of 251 reporters.

April 2008
Market Due Diligence
As an increasing number of companies make "green" claims,an increasing number of Influential Stakeholders are using a variety of resources to conduct their own environmental due diligence on these companies and their claims. Here are two examples of public lists that rank and rate companies on environmental performance.

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 extra-financial drivers of risk and shareholder value, including companies’ performance on social, environmental and strategic governance issues.

http://www.global100.org/2008/index.asp

The Toxic 100: The Top Corporate Air Polluters in the U.S. – The index relies on the U.S. Environmental Protection Agency's Risk Screening Environmental Indicators (RSEI) project. The starting point for the RSEI is the EPA's Toxics Release Inventory (TRI), which reports on releases of toxic chemicals at facilities across the United States.

http://www.peri.umass.edu/Toxic-100-Table.265.0.html

Now that thousands of companies are actively reporting quantified environmental performance data, it becomes increasingly important to understand where your company falls within the dozens of rankings, ratings and sustainability listings.  It is also critical that your sustainability message is consistent with the information that’s already in the market.  Not reporting quantified data about your carbon footprint while claiming that you are, or will be "carbon neutral", sends a mixed signal to the markets.

March 2008
Index Updates
It is that time of year when Investor Relations is getting either the latest information requests, resolutions or invitations on sustainability issues.

• In mid-March, FTSE4Good released their semi-annual list of additions and deletions to the index. 41 new companies have been added; 15 have been dropped. To see a complete listing of all companies added, download this PDF file.
• The Dow Jones Sustainability Indexes (DJSI) sent assessment invitations to over 2,500 leading companies last April. If you're one of these, you should be receiving your 2008 invitation any day now. Click here to view last year's timeline and access an Excel list of 2007 recipients.

Sustainability Regulations

June 2009
EPA Invests in GHG Registry; EPA, DOE Announces Environmental
and Energy Budgets

The Environmental Protection Agency (EPA) and the Department of Energy (DOE) have released details of their budget plans for the 2010 fiscal year, which highlights the Obama administration’s commitment to a “green” economy. The EPA’s 2010 budget includes $17 million in greenhouse gas (GHG) registry investment.

Plan for Dividing Carbon Allowances in the U.S. Announced

An agreement between the leaders of the House Energy and Commerce Committee regarding the proposed allowance allocations has been reached with the goal “to assist industry in the transition to clean energy economy and to spur energy efficiency”.

Over 10,000 Small Businesses Announce Support for
Climate and Energy Bill

Over 10,000 small business leaders nationwide have joined Business for Innovative Climate and Energy Policy (BICEP) and the U.S. Climate Action Partnership (USCAP) – two leading coalitions of large companies such as Nike, Starbucks and Sun Microsystems – to announce support for passing federal environmental legislation in the United States.

U.S. Cities: High Emphasis on Sustainability; Plans to Reduce
Emissions in 5-10 Years

A new report from Living Cities, a collaboration of 21 of the world’s largest foundations and financial institutions, found that 80 percent of the cities studied listed sustainability as one of their top-five priorities, and more than 75 percent of the cities already have a sustainability program in place or are in the developmental stages to reduce overall greenhouse gases. These cities usually set a goal to reduce total emissions by 10 to 20 percent in the next five to 10 years.

May 2009
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?"

April 2009
U.S. EPA Proposes National Carbon Reporting System

The Wall Street Journal reported the U.S. Environmental Protection Agency has proposed a national system for reporting carbon dioxide and other greenhouse gas emissions by major emitters – a national carbon registry.  The registry, which was originally proposed in a 2007 energy bill and is funded in U.S. President Barack Obama's 2010 Budget outline, would lay the foundation for regulation of carbon and other greenhouses gases thought to contribute to global warming.

Global Spread of “Green” Stimulus

The Financial Times, in an interactive chart, has summarized the percentage of dollars allocated to “green” initiatives for the leading stimulus packages.

The leading countries, in terms of amounts of dedicated “green” funds in their stimulus packages, are:

• #1 - China (US$221 billion)
• #2 - The United States (US$113 billion)
• #3 - Germany (US$14 billion)

The proposed round of government spending in economies across the world represents a variety of opportunities for companies who approach the stimulus packages strategically.

February 2009
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.

January 2009
The Changing Administration: What it Means for Green
With the election of Barack Obama, there’s been a great deal of focus about the incoming President’s pledge to increase environmental disclosure, to invest in green infrastructure, and to cap carbon emissions. This pledge will present opportunities for numerous firms (including access to public monies) and force other firms to alter their strategy and operations.

Federal Monies For Sustainability
Congress is projected to begin reviewing the “American Recovery and Reinvestment Act”, which will offer billions of dollars in grants for a broad range of sustainability related initiatives, such as those related to carbon, water, waste, and energy efficiency.

Mandatory GHG Reporting
Some predict that the Obama administration will signal increased regulatory oversight on carbon by federal administrative agencies, namely the Environmental Protection Agency (EPA) and the Securities and Exchange Commission (SEC).

Congress directed EPA to publish a mandatory greenhouse gas reporting rule by June 2009, which will likely require companies to report on greenhouse gases beginning in 2010.

Widespread Carbon Reduction and Related Regulations in the Post-Obama World
In 2008, Obama (via videotape) opened Governor Schwarzenegger's International Climate Change Summit. Obama reiterated his support for cutting greenhouse gas emissions using a cap-and-trade system and stated that he would establish annual targets to reduce emissions to 1990 levels by 2020 and reduce them another 80 percent by 2050.

Obama also stated his intention to engage in global coordination on carbon reduction, which may include:

• The December 2009 deadline to complete the successor to the Kyoto Protocol treaty
• Carbon reduction efforts by cities and states (including California's Assembly Bill 32 mandate to reduce carbon to 1990 levels by 2020)
• Carbon cap-and-trade system

The reduction of carbon to 1990 levels by 2020 will require coordinated efforts, including investments in green infrastructure and increased regulation, such as California's New Green Building Code that will address emissions from buildings and other environmental issues.

December 2008
President-Elect Obama Names Green Team
President-elect Obama recently named his “Green Team”, which includes:

• Energy Secretary Steven Chu (a Nobel-winning physicist)
• Climate Czar Carol Browner (a former EPA chief)
• EPA Leader Lisa Jackson (a former New Jersey environmental regulator)

Insurance Regulators Push for Reporting on Climate Change
The National Association of Insurance Commissioners (NAIC) is pushing for reporting on climate change. The NAIC asserts that insurers should be asked about climate risk in their internal risk-assessment process, particularly how insurers inform and provide incentives for policyholders to deal with climate risk. The NAIC is working with industry groups to define disclosure practices, which may include a survey with results made publicly available.

September 2008
Measurement Before Management
The first mandatory cap-and-trade auction in the United States was initiated on September 25th, under the Regional Greenhouse Gas Initiative, adopted by 10 Northeastern and mid-Atlantic states. By the end of the month the auction had raised nearly $40 million. This is only the beginning of the carbon market, which has the potential to become the largest commodity market in the world.

August 2008
Setting Precedent
According to Bloomberg, some U.S. investors want more information on climate-change risks and have petitioned the Securities & Exchange Commission to force companies to disclose global warming risks to profit.

As reported in the New York Times, one of the country’s largest builders of coal-fired power plants will give investors detailed warnings about the risks that global warming poses to its business under a deal with New York’s attorney general. The agreement between the New York attorney general, Andrew M. Cuomo, and Xcel Energy of Minneapolis, is the first of its kind in the country. It could open a broad new front in efforts by environmental groups to pressure the energy industry into reducing emissions of the greenhouse gases that contribute to global warming.

The agreement with Xcel requires the company to analyze the likely effects on its business of current and future legislation or regulations in the states and countries where it operates and to disclose that information in its investor filings with the Securities & Exchange Commission.

What's Happening in Washington?
As pending regulation becomes more and more likely, it becomes increasingly necessary to understand your own corporate footprint. Both presidential candidates promise to address greenhouse gas emissions and companies can expect to see some type of GHG reduction program implemented in 2009.

John McCain proposes a Cap-And-Trade System that would set limits on greenhouse gas emissions with the following targets:

2012: Return emissions to 2005 levels (18 percent above 1990 levels)
2020: Return emissions to 1990 levels (15 percent below 2005 levels)
2030: 22 percent below 1990 levels (34 percent below 2005 levels)
2050: 60 percent below 1990 levels (66 percent below 2005 levels)

Barack Obama’s proposed energy policy will attempt to reduce our greenhouse gas emissions 80 percent by 2050. His policy will be to implement an economy-wide cap-and-trade program, which will require all pollution credits to be auctioned, and proceeds will go to investments in a clean energy future and rebates and other transition relief for families.

July 2008
What are we hearing from industry?
Top executives from U.S. industry told a congressional panel that the country should assign a dollar cost to carbon emissions to encourage investment in efficiency and tackle climate change.

"We need to reaffirm the principle of predictability," George David, chairman of United Technologies Corp, told the House of Representatives Select Committee on Energy Independence and Global Warming. "We need to say to our world that we are going to have a cost of carbon, whether it's cap-and-trade or a carbon tax. There's got to be an understanding that the cost of energy is going to be high for a long time."

What are we hearing from government?
A group of seven US states and four Canadian provinces, working together under the title of the Western Climate Initiative, last week unveiled draft plans for a carbon cap-and-trade scheme to come into effect in 2012. The draft document outlines how the coalition aims to use a cap-and-trade mechanism to reach its stated target of cutting emissions by 15 percent on 2005 levels by 2020.

Legislators and investors are also urging the Securities and Exchange Commission to adopt policy that would require publicly traded companies to disclose their financial risks from climate change. State treasurers, pension fund managers and institutional investors representing $6.5 trillion in publicly traded investments have called on the SEC to take some type of action on this disclosure issue.

May 2008
Investor’s Call on Congress
Shareholders are not limiting their actions to corporate boardrooms.  A group of investors managing over $2.3 trillion in assets urged the US Senate to pass the Lieberman-Warner bill on climate change to help them make better long term investment decisions.

Man Group, the world's largest listed hedge fund, and CalPERS, the nation's biggest public pension fund, signed off on a letter sent this month to Senate Majority Leader Harry Reid of Nevada and Senate Minority Leader Mitch McConnell of Kentucky.

"In the current unpredictable national climate policy environment, it is difficult and risky for businesses to justify the large-scale, long-term capital investment needed to seize existing and emerging opportunities to transition to a clean, low-carbon economy,'' according to the letter.

Dozens of public pension plans, institutional investors, foundations, endowments and corporations are part of this growing call for federal action on climate.