The alternative fuels market has evolved much faster than anticipated, reveals the report, produced by a coalition of investors, utilities, and makers of alternative fuels and vehicles. For example, sales of electric vehicles are beating early projections, the surge in natural gas supply is helping decrease the carbon intensity in the transportation of merchandise, and biodiesel and renewable diesel are being consumed in much higher quantities than ever before. Although the cellulosic ethanol industry has struggled to produce projected volumes, other alternatives have emerged in unforeseen ways.

“We know now that the Low Carbon Fuel Standard is exceeding our expectations and driving us towards a clean fuels future,” said Eileen Tutt, executive director of the California Electric Transportation Coalition (CalETC). “The standard is doing exactly what it was designed to do – open the way for new fuels and technologies to compete fairly in the marketplace.”

The report analyzes recent developments in the transportation sector and presents three scenarios that ratchet down the carbon intensity of transportation fuels 10 percent to meet the goal of California’s Low Carbon Fuel Standard by 2020.

In addition to the three scenarios, the report offers these main conclusions:

• California’s Low Carbon Fuel Standard is achieving its goal of encouraging technological innovation through private investment;
• The standard’s goals are achievable within its timeline, given current market conditions and revised estimates of low-carbon fuel availability out to 2020.

“The market has certainly taken some unexpected turns – we’re seeing very interesting, if nascent developments from alternative fuel providers that are both encouraging and reflective of the market-based approach of the Low Carbon Fuel Standard,” said Philip Sheehy, analyst for ICF International, the independent consulting firm that performed the technical analyses contained in the report.

Emerging as the report’s biggest surprise was the promise of fuels that substitute for diesel, including biodiesel, renewable diesel, and natural gas. These fuels, which can all be used in trucks, are produced from waste materials, including animal fats, corn oil, and the gas that would otherwise escape from landfills. California drivers are rapidly increasing their consumption of biodiesel, up from the range of 20-25 million gallons in 2010. In fact, “2013 promises to be a banner year for biodiesel consumption in California,” the report declared.

Biodiesel blended at up to 5 percent with conventional diesel does not require any modifications to delivery infrastructure or vehicles. With recent improvements to the carbon intensity of biodiesel by using feedstocks such as corn oil, waste oils, and animal fats, diesel providers can blend low carbon biodiesel and earn credits for those reductions. Similarly, advances in renewable diesel production using waste feedstocks have enabled the deployment of significant volumes of this fuel in California.

Finally, increases in natural gas supply, more vehicle offerings, and attractive fuel pricing have generated significant interest for compressed and liquefied natural gas, particularly by fleets in the goods movement sector. Based on new market data, the report assumes that collectively these diesel substitutes will play a key role in the program.

“It is noteworthy that much of the good news from the state’s emerging fuel sector has come during a continuing national recession and consequent drop in clean-tech investments,” said Carol Lee Rawn, transportation program director for Ceres, a sustainability advocacy group. “It suggests that as the economy improves, we can expect even faster progress – and forward-thinking entrepreneurs and investors would be wise to seize this moment to enter the new market.”

Based on new market data, recent industry investment, and likely consumer behavior, the report outlines three scenarios for how California’s transportation industry might comply with the fuels standard out to 2020. All three projections point to an increasingly diverse fuel supply, with more innovation leading to more renewable fuels and advanced vehicles.

“Despite the unexpected advances, there are additional untapped reductions available with slight adjustments to the state’s clean fuels standard,” said Tutt, at the California Electric Transportation Coalition.

The report also highlights the benefits in terms of greenhouse gas reductions from two additional low-carbon fuel strategies: the addition of off-road electrification (such as electric locomotives and battery-powered forklifts), and improvements to California’s fuel-recovery and extraction processes (using solar energy in crude oil extraction or installing carbon capture and storage technologies at oil and gas wells).

This report is the first phase of a comprehensive, year-long project to analyze the environmental and economic impacts of meeting California’s Low Carbon Fuel Standard. It is the work of a diverse coalition, including CalETC, Ceres, E2, and California Natural Gas Vehicle Coalition, the National Biodiesel Board, and the Advanced Biofuels Association.

View the full report.

Investors and policymakers participating in the two-day gathering include UN Secretary General Ban Ki-moon, former U.S. Vice President and Chairman of Generation Investment Al Gore, and senior investment executives of many of the world’s largest pension funds and other institutional investors.

The Forum comes on the heels of a new International Energy Agency report stating that global temperatures are currently on track to rise between 3.6 °C and 5.3 °C, a change that would have dramatic adverse effects on every sector of the global economy, from agriculture to automobiles.

“The GIC Forum is an extraordinary gathering that signals the urgency major capital market players attach to climate change and its far-reaching economic impacts,” said Christopher Davis, director of Investor Programs at Ceres, a nonprofit group that coordinates the Investor Network on Climate Risk, (INCR), one of four investor networks that comprises the GIC.

Davis, who is representing INCR in Hong Kong, said a key goal of the forum is to engage Asian investors on climate change as a key investment risk and opportunity.

The forum will also focus on sharing best practices on integrating climate concerns into investment practices and on encouraging investors to engage with their portfolio companies about their own climate strategies.

Investors also have a major role to play in directing capital towards climate change solutions such as clean energy, efficient technologies and resilient infrastructure, Davis said.

In addition to INCR, the Global Investor Coalition includes the Europe-based Institutional Investors Group on Climate Change, the Australia/New Zealand-based Investor Group on Climate Change, and the Asia Investor Group on Climate Change.  GIC’s goal is to reduce climate risks to investors and the global economy by encouraging strong carbon-reducing government policies that will galvanize increased low carbon investments.

“When $20 trillion dollars in capital speaks, companies and governments tend to listen,” Davis said. “GIC’s investor members have a critical role to play in moving governments and businesses to take the action necessary to avoid the worst impacts of climate change, and to accelerate the necessary transition to a low carbon economy.”

“To date, governmental efforts to address climate change have been inadequate,” Davis added. “The implications for the global economy are enormous and that’s why major institutional investors are committed to take action. But it will take clear market signals from policy makers, such as limits or taxes on greenhouse gas emissions, to ensure the flow of investment capital towards climate solutions is adequate to meet the challenge. The Global Forum on Climate Change is an important step forward in advancing investor engagement on this critical issue.”

About Ceres
Ceres is a Boston-based nonprofit organization mobilizing company and investor leadership on climate change and other sustainability challenges. Ceres coordinates the Investor Network on Climate Risk, a network of more than 100 institutional investors with collective assets totaling more than $11 trillion.

These financial leaders join more than 150 other American businesses, including industry icons General Motors Co., Intel and Nike and more than 100 ski areas, in asserting, “Tackling climate change is one of America’s greatest economic opportunities of the 21st century … There must be a coordinated effort to combat climate change—with America taking the lead here at home.”

“As the global economy moves toward a low-carbon future, governments that act aggressively to enact strong, long-term climate and energy policies will reap the biggest rewards,” said Jack Ehnes, chief executive officer of CalSTRS, the world’s largest educator-only pension fund serving 862,000 beneficiaries with a portfolio valued at $167 billion. “In order to tackle the global climate crisis, we must realize the strength of our combined efforts. That is why CalSTRS signed the Climate Declaration. U.S. policy leaders need to step up on this issue and embrace climate change policies as an economic opportunity.”

Investors have been an important force in supporting policy changes related to clean energy and efficiency. Last year, investors managing $800 billion in assets called on Congress to renew the Production Tax Credit for renewable energy, which was ultimately extended for another year. Investors have also been outspoken proponents of state Renewable Portfolio Standards (RPSs) that more than two-dozen states have enacted to boost sourcing of wind, solar and other renewable energy. RPSs have catalyzed billions of dollars of investment, thousands of new projects and hundreds of thousands of good-paying jobs, including 30,000 new jobs in 2012 alone.

“Being smarter when it comes to climate change is the right thing to do for all of our families, and it also will translate into economic and investment opportunities,” said Oregon State Treasurer Ted Wheeler, who has previously called for better disclosure of climate-related opportunities and risks. “I am proud to stand with Oregon’s largest employers and premier ski destinations to recognize that a cleaner future will also be a more profitable one.”

Today’s announcement comes on the eve of the first Global Investor Forum on Climate Change, sponsored by Ceres’ Investor Network on Climate Risk (INCR) along with the Asia Investor Group on Climate Change, the EU-based Institutional Investors Group on Climate Change and the Investor Group on Climate Change, which represents Australian and New Zealand investors.

The two-day event will bring together investors and financial institutions from both developed and emerging markets for the first time to discuss the challenges presented by a changing climate, as well as the imperative to scale up investment in low-carbon infrastructure and business. Al Gore, co-founder and chairman of Generation Investment Management, and Ban Ki-moon, Secretary-General of the United Nations, will address the assembly via video.

“Without the participation of the financial community, we won’t get low-carbon solutions to the scale needed to address climate change, nor will the U.S. capture the full economic benefits of building a global clean energy economy,” said Anne L. Kelly, director of Business for Innovative Climate and Energy Policy (BICEP), a Ceres-led business network that helped launch the Climate Declaration in April. “We are pleased to see strong support from the investor community on climate change policy, and it couldn’t have come at a better time. We urge the investors meeting at this week’s event to take the challenge of tackling climate change seriously.”

In addition to CalSTRS and the Oregon Office of the State Treasurer, Climate Declaration investor signatories include: Boardwalk Capital Management; Boston Common Asset Management, LLC;

Calvert Asset Management Company, Inc.; Chrysalix; Domini Social Investments LLC; ESG Integrated Solutions; First Affirmative Financial Network, LLC; Friends Fiduciary Corporation; Green Century Capital Management; Leadership Council of the Sisters, Servants of the Immaculate Heart of Mary; Mercy Investment Services, Inc.; Pax World Management Corp.; Portfolio 21 Investments; Sisters of St. Dominic (Caldwell, NJ); The Christopher Reynolds Foundation; The Sustainability Group at Loring, Wolcott and Coolidge; Tri-State Coalition for Responsible Investment; Trillium Asset Management; Walden Asset Management; and Zevin Asset Management.

Over the course of an ongoing campaign organized by Ceres and BICEP, other leading businesses and investors, as well as individuals, are encouraged to sign the Declaration and join the call to action. For more information about the Climate Declaration, please visit www.climatedeclaration.us.

More information on the Global Investor Forum on Climate Change is available at investorforumonclimate.com.

About Ceres

Ceres is a nonprofit organization mobilizing business leadership on climate change and other sustainability challenges. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org

About BICEP

BICEP (Business for Innovative Climate & Energy Policy), a project of Ceres, is an advocacy coalition of businesses committed to working with policy makers to pass meaningful energy and climate legislation enabling a rapid transition to a low-carbon, 21st century economy – an economy that will create new jobs and stimulate economic growth while stabilizing our planet’s fragile climate. BICEP is a project of Ceres. For more information and a list of member companies visit: http://www.ceres.org/bicep

About CalSTRS

The California State Teachers’ Retirement System, with a portfolio valued at $167.2 billion as of April 30, 2013, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. For 100 years, CalSTRS has served California's public school educators and their families, who today number 862,000 from the state’s 1,600 school districts, county offices of education and community college districts.

About the Oregon State Treasurer

The Oregon State Treasury protects public assets and manages a portfolio valued at $82.4 billion as of April 30, 2013. State investment policies are overseen by the Oregon Investment Council, of which the Treasurer is a member. The Treasurer also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices.

This is one of the major positive findings of a new Ceres analysis of proxy votes cast in 2012 by 43 of the largest U.S. mutual fund companies. Six fund families failed to support even a single climate-related resolution in 2012, including BNY Mellon, Franklin Templeton, ING, Pioneer, Putnam and Vanguard.

“Too many mutual fund managers still fail to grasp the risks that climate change poses to companies they invest in,” said Mindy Lubber, president of Ceres, which commissioned the analysis by Jackie Cook of FundVotes.com. “But it’s encouraging to see DWS, AllianceBernstein, and Oppenheimer acting on their fiduciary duty by voting in the best interest of their clients on these resolutions. While shareholder support for climate resolutions averaged around 22 percent last year, 14 votes were above 30 percent, indicating growing awareness of these important risks and opportunities.”

A growing number of institutional investors – many of them members of the Ceres-coordinated Investor Network on Climate Risk (INCR) comprised of 100 institutional investors – have publicly signaled that they view information about climate risks as material to their investment decisions.

Many of these same investors have filed more than 100 climate-related resolutions in each of the past two years with companies in the electric power, oil & gas, insurance and other sectors. The resolutions typically request that companies disclose climate-related risks they are facing and strategies for managing those risks, including greenhouse gas reduction plans. In 2012, 48 resolutions were withdrawn before going to vote after the companies responded affirmatively to the shareholder requests.  The Ceres study tracked 46 climate resolutions that went to vote during the 2012 proxy season.

Besides AllianceBernstein and DWS, other fund groups that improved their support for climate resolutions last year are Transamerica and Metropolitan. State Street (SSgA), while still supporting relatively few climate-related resolutions, increased its support from 6 percent in 2011 to 13 percent in 2012.  Prior to 2011, State Street had not supported a single climate-related resolution.

Vanguard remains the only fund family to have never cast a single vote in support of a climate-related resolution in the nine years covered by the Ceres survey.  Last year it opposed 59 percent of resolutions that came to vote within its portfolio of funds and abstained on 41 percent of resolutions.

The 10 resolutions requesting that companies prepare a sustainability report including mitigation measures for climate-related risks earned an average of 38 percent support and the four resolutions requesting that companies adopt quantitative greenhouse gas emission reduction goals earned an average of 27 percent support from shareholders.  These outcomes are clear signals of growing market demand for climate-related corporate disclosure.

In 2010, at the request of INCR members, the U.S. Securities and Exchange Commission issued formal guidance on publicly traded companies' obligations to disclose material climate risks in their financial filings.

“U.S. mutual funds, with their sizeable ownership of domestic corporate stocks, need to consider the merits of shareholder requests on climate change and formalize their proxy voting guidelines accordingly,” Lubber said.

Graphic:

Average Support for Climate-Related Shareholder Resolutions in 2012 Proxy Season by Large US Mutual Fund Families


View larger image

About Ceres

Ceres is an advocate for sustainability leadership.  Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org and http://www.incr.com/.

Growing Blue is a data-driven, online resource designed to help local communities and businesses gain a better understanding of water resource challenge and the need for thoughtful solutions.

Both Ceres and World Resources Institute are now serving on Growing Blue’s executive committee. Their addition expands Growing Blue’s information resources to provide decision-makers with the data and best practices required to face a world marked by increasing water scarcity and challenge.

Betsy Otto, Director of the World Resources Institute’s Aqueduct Project, explained, “We are excited to join Growing Blue in its efforts to increase awareness and generate new ideas around sound water management. Aqueduct, WRI’s platform for measuring and mapping water risks worldwide, is just one of the ways WRI is providing the best information on complex natural resources issues. We look forward to working with Growing Blue to help people and businesses identify and respond to the mounting water risks in today’s world.”

Brooke Barton, Ceres Water Program Director, said, “Our investor members want better information on how water risks are affecting the financial performance of corporations and water utilities. We're excited to partner with Growing Blue and its contributors to advance better analysis and public discussion on this critical topic."

The Growing Blue site offers a number of resources, including water management tools, interactive maps and case studies, all of which can be found at www.growingblue.com.  The site’s blog features a diverse group of innovative environmental thinkers.  To follow Growing Blue on Twitter, please visit www.twitter.com/growingblue.

About Ceres

Ceres is a nonprofit that mobilizes business and investor leadership on sustainability challenges such as water scarcity and climate change. It directs the Investor Network on Climate Risk (INCR), a network of more than 100 investors with collective assets totaling more than $11 trillion.

Ceres provides tools and resources to advance corporate water management including the Ceres Aqua Gauge, a roadmap that helps companies assess, improve and communicate their water risk management approach and that allows investors to evaluate how well companies are managing water-related risks and opportunities.

For more information, visit www.ceres.org

About World Resources Institute

WRI focuses on the intersection of the environment and socio-economic development. We go beyond research to put ideas into action, working globally with governments, business, and civil society to build transformative solutions that protect the earth and improve people’s lives. For more information, visit http://www.wri.org.

About Growing Blue

Growing Blue was created to tell the important story of how water is as essential to economic and social growth as it is to ensuring healthy ecosystems and the environment.  In consultation with environmental industry colleagues, scientists, academia and environmental professionals at leading NGOs, Growing Blue is a repository for water-focused data that is used to generate interactive maps that better inform people on the current state of water and the impacts of daily life on dwindling water resources around the world. The web site is managed by representatives from the non-profit, academic and corporate sectors including Cardno ENTRIX, Ceres, The Earth Institute at Columbia University, GE Intelligent Platforms, Global Water Intelligence, IBM, International City Managers Association, The Nature Conservancy, United Nations Global Compact CEO Water Mandate, U.S. Water Alliance, Veolia Water, World Business Council for Sustainable Development, World Resources Institute, and Xylem. The site is available online at www.growingblue.com.

These ski areas join iconic American businesses, including General Motors Co., Nike and Levi Strauss & Co., as well as founding signatory Aspen Snowmass, in asserting that a bold response to the climate challenge is “one of America’s greatest economic opportunities of the 21st century.” A full list of ski industry signatories is available here.

“It is obvious that the success of ski business operations depends greatly on climate, which is why we are so invested in programs that keep our slopes sustainable. But our actions alone won’t be enough without strong policies,” said Brent Giles, Chief Sustainability Officer for Powdr Corp of Utah, parent company to Park City Mountain Resort in Utah, Copper Mountain in Colorado and Killington Resort in Vermont. “We welcome legislative and regulatory initiatives that will reduce carbon emissions, incentivize renewable energy development and help improve our resiliency in the future.”

Ski areas in the U.S. employ approximately 160,000 people and generate approximately $12.2 billion in annual revenue. The National Ski Areas Association (NSAA) calculates that visitors to U.S. ski areas spent $5.8 billion at those resorts over the course of the 2011/2012 season. Preliminary figures from the 2012/2013 season show an 11 percent increase in visits year-over-year, to an estimated 56.6 million visits this season.

“The past ski season was a banner year for our guests and for our resort, but we can’t gamble on the weather in an uncertain climate. We have to take action,” said Jerry Blann, President of Jackson Hole Mountain Resort in Wyoming. “Resorts have made tremendous efforts to raise awareness on the issue of climate change and to adjust our operations to reduce carbon emissions and manage resources efficiently. We need Washington to take those strategies seriously through stronger policies.”

“Ski area environmental programs have come a long way in 20 years, particularly in terms of their level of sophistication, demonstrated results, and their concerted focus on addressing climate change,” says Geraldine Link, NSAA Public Policy Director. “Signing the Climate Declaration is the next logical step for our members to get solutions to scale.”

“We welcome the ski industry as allies in our work on climate and energy issues and as signatories of the Climate Declaration. This is an industry that cannot be off-shored, and they are calling for climate action here at home,” said Anne Kelly, director of BICEP. “Policymakers must realize that the old political paradigm of ‘It’s the environment or the economy; pick one’ is a false choice. American businesses are ready to combat climate change, and policymakers should join them in leading the way.”

Over the course of an ongoing campaign organized by Ceres and BICEP, other leading businesses, as well as individuals, are encouraged to sign the Declaration at www.climatedeclaration.us and join the call to action.

About Ceres

Ceres is an advocate for sustainability leadership.  Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org

BICEP (Business for Innovative Climate & Energy Policy), a project of Ceres, is an advocacy coalition of businesses committed to working with policy makers to pass meaningful energy and climate legislation enabling a rapid transition to a low-carbon, 21st century economy – an economy that will create new jobs and stimulate economic growth while stabilizing our planet’s fragile climate. BICEP is a project of Ceres. For more information and a list of member companies visit: http://www.ceres.org/bicep

Full List of Ski Areas Signing Climate Declaration:

ALASKA
Alyeska Resort

CALIFORNIA
Alpine Meadows
Bear Valley
Boreal Mountain Resort
Dodge Ridge
Granlibakken Ski Area
Homewood Mountain Resort
Kirkwood Mountain Resort
Mammoth
Mountain High
Mt. Shasta Ski Park
Northstar California
Royal Gorge
Sierra-at-Tahoe
Soda Springs Ski Area
Squaw Valley
Sugar Bowl

COLORADO
Arapahoe Basin
Aspen Highlands
Aspen Mountain
Beaver Creek
Breckenridge
Buttermilk
Copper
Crested Butte Mountain Resort
Durango Mountain Resort
Echo Mountain
Keystone
Loveland Ski Area
Monarch
Powderhorn
Silverton
Snowmass
Sol Vista at Granby Ranch
Steamboat Ski & Resort
Telluride Ski & Golf Resort
Vail Mountain
Winter Park

IDAHO
Lookout Pass
Schweitzer Mountain Resort
Tamarack Resort

ILLINOIS
Chestnut Mountain Resort

INDIANA
Perfect North Slopes

MAINE
Camden Snow Bowl
Mt. Abram
Shawnee Peak Ski Area

MASSACHUSETTS
Catamount Ski Area
Jiminy Peak
Ski Butternut
Wachusett Mountain Ski Area

MICHIGAN
Crystal Mountain

MINNESOTA
Lutsen Mountains
Spirit Mountain
Welch Village

MONTANA
Bridger Bowl
Moonlight Basin

NEVADA
Heavenly Mountain Resort
Las Vegas Ski & Snowboard Resort
Mt. Rose

NEW HAMPSHIRE
Attitash
Cranmore Mountain Resort
Gunstock Mountain Resort
Loon Mountain
Mount Sunapee
Ragged Mountain Resort
Waterville Valley

NEW MEXICO
Pajarito Mountain Ski Area
Ski Apache
Taos Ski Valley

NEW YORK
Bristol Mountain
Gore Mountain
Greek Peak Mountain Resort
Holiday Valley Resort
Holimont Ski Area
Hunter Mountain
Mt. Peter Ski Area
Whiteface
Windham Mountain

OREGON
Anthony Lakes
Cooper Spur Mountain Resort
Mt. Ashland Ski Area
Mt. Bachelor
Mt. Hood Meadows Ski Resort
Timberline Lodge & Ski Area

PENNSYLVANIA
Camelback Mountain Resort
Elk Mountain
Liberty Mountain Resort
Roundtop Mountain Resort
Whitetail Resort

UTAH
Alta Ski Area
Canyons Resort
Deer Crest Private Trails
Deer Valley
Park City Mountain Resort

VERMONT
Bromley
Burke Mountain
Killington
Middlebury College Snow Bowl
Okemo Mountain Resort
Pico Mountain
Smugglers’ Notch Resort
Stowe
Stratton
Sugarbush

VIRGINIA
The Homestead Ski Area
Massanutten Ski Resort
Wintergreen Resort

WEST VIRGINIA
Snowshoe

WASHINGTON
49 Degrees North Mountain Resort
Mission Ridge
Stevens Pass
Summit-at-Snoqualmie

WISCONSIN
Cascade Mountain
Crystal Mountain
Granite Peak at Rib Mountain State Park

WYOMING
Grand Targhee Resort
Jackson Hole Mountain Resort

That is the key finding of Power Factor: Institutional Investors’ Policy Priorities Can Bring Energy Efficiency to Scale, a new report issued today by Ceres and its Investor Network on Climate Risk (INCR). Based on the input of nearly 30 institutional investors and other experts from the energy, policy and financial sectors, Power Factor cites three areas of policy—utility regulation, demand-generating policies and innovative financing policies—that can take energy efficiency financing to a scale sufficient to attract significant institutional investment.

Investment analysts estimate that climate change could contribute ten percent of overall risk within institutional investment portfolios. Furthermore, the International Energy Agency estimates that one third of emissions reductions must come from energy efficiency in order to avoid the worst impacts of climate change. Energy efficiency-related investments thus offer institutional investors an attractive opportunity to manage the risks of climate change while earning returns.

“Energy efficiency offers investors a potent one-two punch: stable returns and an important strategy for mitigating climate-related risks,” said Mindy Lubber, president of Ceres and director of INCR. “Policymakers and regulators should work to unlock capital from institutional investors for energy efficiency by promoting the policies identified in this report. Many of these policies do not require public funds, and they can put money back into the pockets of homeowners and business leaders around the country.”

Although institutional investors hold shares in energy services companies, have improved energy use in their real estate investments, and have filed dozens of shareholder resolutions encouraging more efficient energy use at corporations within their portfolios, the report argues that the ability drive the financing of energy efficiency projects—financing retrofit loans through a secondary market—is unavailable to them. Secondary markets are routinely used to bundle loans, such as mortgages and car loans, and repackage them as securities or bonds. Investors can then purchase shares of these products, and sell them as they would a share of stock.

“CalSTRS has made a commitment to energy efficiency. In the last year alone, we’ve engaged nearly 100 of our public equity portfolio companies concerning their energy efficiency efforts. In 2007, 47 percent of buildings in our real estate portfolio received top Energy Star scores; today over 90 percent make that mark,” said Jack Ehnes, CEO of the California State Teachers Retirement System (CalSTRS). “However, while many of the largest investors in the country are taking action on energy efficiency, more is needed. Smart policy fixes can help us go further to both realize the massive energy efficiency investment opportunity that exists and help avoid the worst of climate change and the risks it presents to our portfolios.”

“Investors are interested in energy efficiency, but we need a strong pipeline of projects and better information to maximize the investment opportunity,” said Ken Locklin, managing director, Impax Asset Management LLC. “The changes we are seeing at the local level, including stronger public utilities regulations and disclosure standards for building energy performance are all encouraging factors.”

Specifically, investors cited several areas of policy that would help to build up a secondary market for energy efficiency retrofit loans:

• Utility Regulations: Public Utilities Commissions and other regulators can move the utility business model from a 20^th century model that rewards increasing energy sales to one that maximizes energy efficiency. At the same time, utilities and their regulators can help make energy-efficiency finance programs investment grade through the same protections provided to electricity sales as well as better data sharing and strong contractor and performance standards.
• Demand-Generating Policies: Investors highlighted efficiency-inducing measures including building codes and standards and appliance and equipment efficiency standards set a baseline of efficiency in the marketplace. Building energy disclosure requirements, such as those adopted by cities like Philadelphia, New York City and most recently, Boston, can provide both an impetus to do energy efficiency retrofits and the transparency to facilitate investments in more efficient buildings.
• Innovative Financing Policies: These policies include Property Assessed Clean Energy (PACE) bonds, on-bill repayment, credit enhancement, and extending Master Limited Partnerships to combined heat and power (CHP) projects can overcome the challenge of paying for the upfront costs of energy efficiency retrofits. In addition, these policies help provide vehicles for loans that can be packaged and sold to institutional investors.

“In order for California to realize the full advantages of energy efficiency, we need to focus on policies that encourage institutional investor participation and job creation. We know from our investment colleagues here and around the country that we’re facing similar challenges and opportunities,” said California State Controller John Chiang. “This is why I am sponsoring legislation in California that will scale-up commercial sector energy efficiency improvements to a level that would be attractive to institutional investors. As this report indicates, the right policies can overcome barriers to low-cost financing for projects that create jobs and use less energy.”

A webinar will be held on June 6, 2013, from 3:00-4:00 p.m. ET/12:00-1:00 p.m. PT to provide an overview of the report. To attend, please register at this link.

About Ceres and INCR

Ceres is an advocate for sustainability leadership.  Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org

Based on the latest available data, the report also reveals that Wyoming, Kentucky, West Virginia, Indiana, and North Dakota had the highest CO₂ emissions per megawatt-hour of power produced, while Idaho, Vermont, Washington, Oregon, and Maine had the lowest CO₂ emissions rates. Nationwide, five power producers—American Electric Power, Duke Energy, FirstEnergy, Southern Company, and Tennessee Valley Authority—generate 25 percent of overall electric sector CO₂ emissions, though some of these producers and others have significantly reduced emissions in recent years.

The Benchmarking Air Emissions report is the ninth in a series highlighting environmental performance and progress in the nation’s electric power sector. Traditionally, the report has been published every two years. However, in light of ongoing changes within the industry, in terms of plant retirements, pollution control retrofits and new emissions regulations under consideration, a streamlined version of the report was prepared this year, based on 2011 generation and emissions data from the Energy Information Administration and the Environmental Protection Agency.

Key findings of the report include:

• In 2011, power plant NOx and SO₂ emissions were 70 percent and 72 percent lower, respectively, than they were in 1990 when Congress passed major amendments to the Clean Air Act.
• Since 1990, power plant CO₂ emissions have increased by 20 percent, although CO₂ emissions declined 7 percent from 2008 through 2011.
• There is wide variation in CO₂ emission rates across the 50 states, as noted in the report’s new state-by-state emissions summary.  States with the highest CO₂ emission rates were heavily reliant on coal: Wyoming and Kentucky, the states with the highest CO₂ emission rates, relied on coal for 86 and 93 percent of their power generation, respectively.
• Coal accounted for 44 percent of the power produced by the 100 largest companies in 2011, followed by natural gas (23 percent), nuclear (22 percent), hydroelectric power (8 percent), non-hydroelectric renewables and other fuel sources (3 and 1 percent, respectively), and oil (less than 0.2 percent).
• From 2000 to 2011, natural gas generation increased 69 percent industry-wide, while renewable generation increased 44 percent.  Coal-fired generation dropped 12 percent over the same period.

“The electric power industry is moving to cleaner sources of energy, demonstrating that cleaner power generation is achievable.  Stronger regulations will reinforce those trends and stimulate further investment in low-carbon, low-risk resources like renewable power and energy efficiency,” said Mindy Lubber, president of Ceres, which sponsored the report with NRDC, Entergy Corporation, Exelon, Pacific Gas and Electric Company, PSEG, Tenaska and Bank of America.  M.J. Bradley & Associates authored the report.

“The Benchmarking Air Emissions report is an important resource for following changes in the U.S. electric power sector,” said Chuck Barlow, Vice President, Environmental Strategy and Policy for Entergy Corporation. “The rise of natural gas is a game-changer for U.S. power plant emissions, as this year’s analysis shows. At Entergy, our focus has long been on providing value to all of our stakeholders while maintaining our commitment to environmentally responsible action.  A diverse generation portfolio helps us get there.”

Each edition of the Benchmarking Air Emissions report analyzes the latest emissions from the 100 largest power producers in the U.S. In 2011, the year covered in this edition of the report, the top 100 power producers together accounted for 86 percent of the electricity produced. The 100 largest power producers emitted approximately 4.1 million tons of SO₂, 1.7 million tons of NOx, 25 tons of mercury, and 2.1 billion tons of CO₂ in aggregate during 2011.

Air pollution emissions from power plants, while declining overall, are highly concentrated among a small number of power producers. For example, nearly a quarter of the electric power industry’s SO₂ and CO₂ emissions come from just three and five top producers, respectively, as illustrated in summary slides available for download at mjbradley.com/benchmarking-air-emissions.

The report also provides company-specific emissions trend information from 2000 through 2011 for the four largest power generators, illustrating the range of approaches that power companies have used to reduce emissions:

• AEP reduced its total SO₂ emissions by 52 percent between 2000 and 2011, from 1.1 million tons to just over half a million tons, primarily by adding scrubbers to approximately 7,900 megawatts of coal-fired generating capacity.
• Southern Company reduced total SO₂ emissions by 63 percent while increasing overall generation by 8 percent between 2000 and 2011 by bringing online approximately 14,000 megawatts of natural gas-fired capacity during the same period.
• NextEra Energy added more than 20,000 megawatts of wind, solar, and natural gas-fired generating capacity between 2000 and 2011, and nearly doubled its total power generation, driving down its CO₂ emissions rate from 1,023 to 603 pounds per megawatt hour, a 41 percent improvement.
• Among the top 100 power producers, Exelon had the eighth lowest CO₂ emissions rate in 2011, largely due to its large nuclear and renewable energy fleet, as well as its investments in nuclear uprates.  Even with a low level of emissions, Exelon reduced its total CO₂ emissions by 32 percent and its CO₂ emission rate by 40 percent between 2000 and 2011.

“Power plants are America’s largest source of global warming pollution. The good news is that their emissions have declined significantly since their peak in 2007, but we still have a long way to go. The Benchmarking Report provides a valuable scorecard, allowing citizens and policymakers to compare the performance of individual companies against others in this critical industry," said Dan Lashof, Program Director of Climate and Clean Air at the Natural Resources Defense Council.

“Today’s report highlights the credit due to policy leaders in New Jersey and at the federal level for adopting policies that have reduced power plant emissions. The progress made in New Jersey can, and should, be a model for policymakers across the country,” said Geraldine Smith, PSEG’s General Environmental Counsel and Managing Director Environmental Policy. “By investing more than $3 billion in our New Jersey power plants since 2005, PSEG has been able to reduce emissions of NOx, SO₂ and mercury by more than 90 percent, while increasing output of electricity. We look forward to participating in future discussions on cost-effective ways to improve air quality in our home state and across the nation.”

The 2013 Benchmarking Air Emissions report’s comparative analysis of emissions data is relevant to policymakers considering regulatory approaches; public interest organizations concerned about public health and consumer costs; and financial analysts and investors assessing company risk exposure as power plant emission limits in the U.S. gain more momentum.

The report is available for download at ceres.org, nrdc.org, and mjbradley.com. In addition to the aggregate corporate emissions data for 2011 provided in this report, plant-specific data for 2011 are now available for download at mjbradley.com.

For more information:

Brian Bowen, 617-247-0700 x148, bowen@ceres.org

About Ceres

Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion.  For more information, visit http://www.ceres.org

About NRDC

The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 1.3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Livingston, Montana, and Beijing.  Visit us at www.nrdc.org and follow us on Twitter @NRDC.

About Bank of America

Bank of America’s commitment to corporate social responsibility (CSR) is a strategic part of doing business globally. Our CSR efforts guide how we operate in a socially, economically, financially and environmentally responsible way around the world, to deliver for shareholders, customers, clients and employees. Our goal is to help create economically vibrant regions and communities through lending, investing and giving. By partnering with our stakeholders, we create value that empowers individuals and communities to thrive and contributes to the long-term success of our business. We have several core areas of focus for our CSR, including responsible business practices; environmental sustainability; strengthening local communities with a focus on housing, hunger and jobs; investing in global leadership development; and engaging through arts and culture. As part of these efforts, employee volunteers across the company contribute their time, passion and expertise to address issues in communities where they live and work.  Learn more at www.bankofamerica.com/about and follow us on Twitter at @BofA_Community.

About Entergy Corporation

Entergy Corporation, which celebrates its 100th birthday this year, is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including more than 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas.  Entergy has annual revenues of more than $10 billion and approximately 15,000 employees.

About Exelon

Exelon Corporation (NYSE: EXC) is the nation’s leading competitive energy provider, with 2012 revenues of approximately $23.5 billion. Headquartered in Chicago, Exelon has operations and business activities in 47 states, the District of Columbia and Canada.  Exelon is one of the largest competitive U.S. power generators, with approximately 35,000 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. The company’s Constellation business unit provides energy products and services to approximately 100,000 business and public sector customers and approximately 1 million residential customers. Exelon’s utilities deliver electricity and natural gas to more than 6.6 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO).

About Pacific Gas and Electric Company

Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combined natural gas and electric utilities in the United States.  Based in San Francisco, with 20,000 employees, the company delivers some of the nation’s cleanest energy to 15 million people in Northern and Central California. For more information, visit http://www.pge.com/about/newsroom/ and www.pgecurrents.com.

About PSEG

Public Service Electric and Gas Company (PSE&G) is New Jersey’s oldest and largest regulated gas and electric delivery utility, serving nearly three-quarters of the state’s population. PSE&G is the winner of the ReliabilityOne Award for superior electric system reliability. PSEG Power is a major unregulated independent power producer in the U.S. with three main subsidiaries: PSEG Fossil, PSEG Nuclear, and PSEG Energy Resources and Trade. PSEG Power operates one of the most balanced portfolios in the country, both in terms of fuel mix and market segment (base load units, load following units and peaking units) and is committed to operational excellence.  PSE&G and PSEG Power are subsidiaries of Public Service Enterprise Group Incorporated (PSEG) (NYSE:PEG), a diversified energy company (www.pseg.com).

About Tenaska

Tenaska, based in Omaha, Neb., is one of the leading independent power producers in the U.S. Tenaska and its affiliates manage operations for approximately 11,000 megawatts (MW) of power generation consisting of 14 power plants, seven of which are owned by Tenaska in partnership with other companies and seven of which are private equity investments managed by affiliate Tenaska Capital Management, LLC. Tenaska’s affiliates operate nine power plants in seven states totaling approximately 6,500 MW of generating capacity. For more information about Tenaska, visit the company’s website at www.tenaska.com.

After a series of investor forums in May to incorporate key feedback, a final document will be submitted first to stock exchanges for review and subsequently for consideration at the World Federation of Exchanges annual meeting in October.

The Consultation Paper, developed by nearly a dozen members of the Ceres-led Investor Network on Climate Risk (INCR), calls for the following disclosures by companies as part of a sustainability listing standard: an ESG materiality assessment process; a sustainability table of disclosures that would map the locations of ESG content in public documents; and ESG reporting on eight key issue areas.

To view the Consultation Paper, the supporting Appendices and comments received, visit: http://www.ceres.org/investor-network/incr/sustainable-stock-exchanges.

About Ceres and INCR

Ceres is a nonprofit organization mobilizing business and investor leadership on sustainability challenges such as global climate change. Ceres directs the Investor Network on Climate Risk (INCR), a network of over 100 institutional investors with collective assets totaling more than $11 trillion.

A new Ceres research paper on water use in hydraulic fracturing operations shows that a significant portion of this activity is happening in water stressed regions of the United States, most prominently Texas and Colorado, which are both in the midst of prolonged drought conditions. It concludes that industry efforts underway, such as expanded use of recycled water and non-freshwater resources, need to be scaled up along with better water management planning if shale energy production is to grow as projected.

The report, announced today, is based on well drilling and water use data from FracFocus.org and water stress indicator maps developed by the World Resources Institute (WRI). The research shows that nearly 47 percent of the wells were developed in water basins with high or extremely high water stress. The research was based on FracFocus data collected on 25,450 wells in operation from January 2011 through September 2012.

“These findings highlight emerging tensions in many U.S. regions between growing hydraulic fracturing activity and localized water supply needs,” said Ceres president Mindy Lubber, in announcing the report, Hydraulic Fracturing & Water Stress: Growing Competitive Pressures for Water, at Ceres’ annual conference in San Francisco.

FracFocus.org was launched in 2011 as a voluntary national hydraulic fracturing chemical registry. The database provides the location and date that each oil and gas well was developed and the chemical additives and total volume of water injected down each well.

WRI’s water stress indicator maps are part of a recently launched Aqueduct Water Risk Atlas, which provides a comprehensive, high-resolution picture of water-related risks worldwide. The baseline water stress indicator maps show the level of competition for water in different U.S. regions by measuring total annual water withdrawals against the percentage of water that is available.  Extremely high water stress means over 80 percent of available water is already being allocated for municipal, industrial and agricultural uses.

By linking the two datasets together through matching latitude and longitude coordinates, the report provides valuable insights about the extent and distribution of well production activity in regions with water competition challenges.

Colorado and Texas showed the highest  exposure to water stress. In Colorado, 92 percent of the wells were in extremely high water stress regions. In Texas, which accounts for nearly half of the total wells analyzed, 51 percent of the wells were in high or extremely high water stress regions. In some Texas counties, water use for hydraulic fracturing accounted for more than 20 percent of the region’s total water use. In Pennsylvania, 70 percent of the wells were in medium to high water stress water basins and only 2 percent were in high water stress basins.

“Given projected sharp increases in shale oil and gas production in the coming years, competition over water should be a growing concern to energy companies, policymakers and investors,” the report concludes, noting a projected doubling of oil and gas fracturing production in the coming years. “Shale energy development cannot grow without water, but in order to do so the industry’s water needs and impacts need to be better understood, measured and managed.”

As the report outlines, the industry has made progress in boosting the use of recycled water and other alternative water sources for fracturing wells. Operators are starting to use non-freshwater alternatives such as wastewater, saline water, seawater and acid-mine drainage. “Overall water recycling and the use of non-freshwater sources must increase considerably to have a significant impact,” the report says.

The report includes key recommendations for companies and regulators, among those:

• Comprehensive mandatory disclosure by companies of how much freshwater, non-freshwater and recycled water they are using region by region as well as how much water is returning to the surface and where it is ending up.
• Requirements for companies to set quantifiable water use targets, including recycling and non-freshwater use targets.
• Ensure that both companies and local regulators are conducting sufficient water management planning.
• Ensure that companies have a local stakeholder engagement process in place on water issues.

Other investor focused initiatives, such as the Interfaith Center for Corporate Responsibility and the Investor Environmental Health Network's Extracting the Facts (see their goal 6) have been pushing for better water sourcing disclosure along with other engagement recommendations on mitigating environmental and community impacts.

Today’s report is part of a larger, more comprehensive study Ceres is undertaking to analyze water risks across the entire hydraulic fracturing lifecycle – from water sourcing to final treatment and disposal of wastewater – across different regional basins in North America. The research is aimed primarily at investors who have financial stakes in operators and support services in these regions.

About Ceres

Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org

Angelides is currently President of Riverview Capital Investments, a real estate investment firm which focuses on clean energy projects and sustainable urban development. From 1999 to 2007, he served as California’s State Treasurer. During his eight years in elected office, Angelides called for a renewed push in shareholder activism and launched the Green Wave Initiative, encouraging investment in green technologies and urging companies to address the financial risks of climate change and reduce their energy consumption.

The Bavaria Award is presented by Ceres and Trillium Asset Management each year to honor an inspiring leader working to move capital markets toward a system that balances economic prosperity with social and environmental concerns. The award honors Joan Bavaria, a pioneer of social investing who founded Ceres and Trillium Asset Management. Joan Bavaria passed away in 2008.

“Phil’s actions were bold and transformational, given that at the time, no other state pension fund had taken steps to incorporate environmental impact into their investments.” said Trillium’s CEO Matt Patsky.

“Phil Angelides has worked tirelessly to push investors and the business community toward a sustainable economy. As California State Treasurer, he helped spur investments that increased returns, created jobs and addressed the financial risks caused by the changing environment,” said Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk (INCR). “Phil embodies the spirit of the Joan Bavaria Award and we are honored to acknowledge his contribution to the sustainable investing community.”

Angelides also served as Chairman of the Financial Crisis Inquiry Commission, a bipartisan panel charged with conducting the nation’s official inquiry into the causes of the financial and economic crisis and presenting findings and recommendations to the President and Congress.  Since 2007, Angelides has served as Chairman of the Apollo Alliance, a national coalition of business, labor, environmental and community leaders committed to creating green jobs and building a clean energy economy.

A founding member of the Ceres-led Investor Network on Climate Risk, Mr. Angelides served on the INCR Steering Committee and was a motivating force behind the first Investor Summit on Climate Risk at the United Nations in New York. Over the course of his career, he has helped mobilize financial leaders to act on climate and sustainability issues.

“The enduring strength of our economy and society is inextricably tied to our willingness to embrace investments and business practices that create sustainable enterprises, broaden economic opportunity, and protect our environment,” said Mr. Angelides. “I am deeply honored to receive the Joan Bavaria Award and remain committed to supporting the critical efforts needed to confront the enormous economic and environmental risks posed by climate change.”

About Ceres

Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of more than100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org

About Trillium Asset Management
With a history spanning three decades, Trillium is the oldest independent investment advisor focused exclusively on sustainable and responsible investing. Trillium manages over $1 billion in assets for clients including high net worth individuals, foundations, endowments, religious institutions, and other non-profits. To learn more about Trillium, please visit http://trilliuminvest.com.

The new signatories of the Climate Declaration were announced today during the annual Ceres Conference in San Francisco and include Autodesk Inc., Burton Snowboards, Eastern Bank, General Motors Co., LUSH, Method Products, Inc. and Novelis. Originally endorsed by 33 businesses and launched in April 2013, the Climate Declaration has now been signed by a total 40 leading businesses that collectively provide approximately 550,000 U.S. jobs and generate a combined annual revenue of approximately $611 billion.

Most notably, the Declaration has earned the support of General Motors, one of the world’s largest automakers and a Ceres network company for more than two decades.

“Everywhere you look there are opportunities to seize the high ground on climate and energy,” said Michael J. Robinson, GM vice president of sustainability and global regulatory affairs. “Indeed, our leaders have been presented with an historic opportunity to create a national energy policy from a position of strength and abundance, while also emphasizing the importance of energy efficiency and renewables. Every day our 200,000-plus GM employees around the world are working to improve the sustainability of our vehicles and the plants that build them. We believe our efforts are making a difference, and clear policies will help drive carbon emissions even lower.”

“Since we launched the Climate Declaration just a few weeks ago, the response from the business community has been overwhelmingly positive,” said Mindy Lubber, president of Ceres. “Companies see climate change as a material issue, and they know that without policy action, even their most ambitious internal carbon-cutting achievements will not be enough. We need smart policy to get solutions to scale and ensure that the technologies and strategies that help us to tackle climate change are developed here in the United States.”

Over the course of an ongoing campaign organized by Ceres and BICEP, other leading businesses, as well as individuals, will be encouraged to sign the Declaration at www.climatedeclaration.us and join the call to action.

Reporters interested in attending the Ceres Conference are encouraged to review the full conference agenda and asked to contact Peyton Fleming, 617-733-6660, fleming@ceres.org. Follow Ceres on Twitter at @CeresNews and the conference via the hashtag #Ceres13.

About Ceres

Ceres is an advocate for sustainability leadership.  Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org

BICEP (Business for Innovative Climate & Energy Policy), a project of Ceres, is an advocacy coalition of businesses committed to working with policy makers to pass meaningful energy and climate legislation enabling a rapid transition to a low-carbon, 21st century economy – an economy that will create new jobs and stimulate economic growth while stabilizing our planet’s fragile climate. BICEP is a project of Ceres. For more information and a list of member companies visit: http://www.ceres.org/bicep

Launched in June 2011 by Ceres and Tellus Institute, GISR is a global non-profit initiative aimed at moving markets to the advantage of corporate sustainability leaders.  GISR will not rate companies on sustainability.  Instead, it will accredit other sustainability ratings, rankings or indices to apply its standard for measuring excellence in corporate sustainability performance.

Currently, more than 100 ratings, ranking and indices are evaluating the performance of more than 10,000 companies. They are using more than 2,000 indicators of corporate sustainability performance.

“This abundance of sustainability information may seem to be a boon to investors, but the signal to noise ratio, coupled with the absence of a generally accepted global standard as GISR is pursuing, has curbed ratings’ use, uptake and ultimately impact among investors,” said Mindy Lubber, president of Ceres, who announced the GISR effort in advance of Ceres annual conference May 1-2 in San Francisco. “In the same year, companies that score high on one rating system may score low on others, often confounding investors, confusing companies and constraining ratings’ potential to move markets towards more sustainable outcomes.”

To address this challenge, GISR aims to accelerate the integration of environmental, social and governance (ESG) issues and indicators in investment decision-making. It will do so by building a new standard that equips investors, companies and other stakeholders with the tools to recognize true excellence in corporate sustainability.

“GISR’s goal is to create a benchmark of excellence that will bolster investor confidence in sustainability ratings and increase their uptake,” said Mark Tulay, GISR Program Director. “This, in turn, will grow the market for ratings and unleash their full potential to move capital toward true sustainability leaders.  In a world fraught with uncertainty, such outcomes will play a vital role in bringing long-term prosperity and resilience to investors, companies and society at-large.”

A multi-stakeholder initiative with involvement from investors, companies and non-governmental organizations (NGOs), GISR’s standard development process includes three components: Principles, Issues and Indicators. The Principles, announced today, identify the core attributes of a ratings framework applicable to all sustainability ratings, rankings and indices.  The Principles were developed with input from hundreds of GISR investor, corporate and NGO partners. “Issues” are themes, topics or aspects of sustainability material used to assess a company’s sustainability performance, such as water, carbon emissions and human rights. “Indicators” are the metrics applied to issues that measure a company’s sustainability performance.

Today marks the release of the Beta Version of the 12 Principles, which include: Transparency, Impartiality, Continuous Improvement, Inclusiveness, Assurability, Materiality, Comprehensiveness, Sustainability Context, Long-Term Horizon, Value Chain, Balance and Comparability.

The public comment period will be open from June 1 – July 31, 2013. The Principles may be found at www.ratesustainability.org.

“We need to transition into the next generation of ratings,” said Allen White, Founder of GISR and Co-Founder and Former CEO of GRI. “Investors are increasingly aware that businesses in the 21^st century face powerful forces that pose formidable risks to corporate performance, forces linked to ecological and social perils facing the global economy. Once defined solely in terms of financial metrics, savvy investors now understand that a company’s value is inextricably linked to how well it measures, preserves and enriches human, intellectual, natural, and social capital, all which contribute to the financial prosperity of the organization. GISR will promote a race-to-the-top among raters and, in turn, enrich and accelerate business’ contribution to the global sustainability agenda.”

UPS and McDonald’s Join Supporting Stakeholder Program

Also today, GISR also announced UPS and McDonald’s commitment to its Supporting Stakeholder Program. They join the growing list of companies, investors and NGOs that are playing an active role in the GISR standard development process, such as Bloomberg, TIAA-CREF, UBS, Intel, AMD, Deloitte, Pax World, GRI and SASB.  For more information about the Supporting Stakeholder Program, visit: www.ratesustainability.org.

About Global Initiative for Sustainability Ratings (GISR)

Launched in June 2011 as a joint program of Ceres and Tellus Institute, the Global Initiative for Sustainability Ratings (GISR) is a global non-profit, mission driven program aimed at moving markets to the advantage of true sustainability leaders. GISR's mission is to design and steward a global sustainability (ESG) ratings standard to expand and accelerate the contribution of business and other organizations worldwide to sustainable development. GISR will not rate companies. Instead, it will accredit other sustainability ratings, rankings or indices to apply its standard for measuring excellence in sustainability performance. For more information, visit www.ratesustainability.org.

About Ceres

Ceres is a nonprofit organization mobilizing business leadership on sustainability challenges such as global climate change and water scarcity. Ceres directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information about Ceres and its upcoming annual conference in San Francisco, visit www.ceres.org.

About Tellus Institute

The Tellus Institute, founded in 1976, is among the world’s leading sustainability research and policy organizations. Its work focuses on the creation of scenarios,  tools and networks designed to drive transformational change in business, civil society, global governance and, more broadly, public discourse surrounding global futures. The Institute is founder/co-founder of numerous sustainability initiatives, including the Global Reporting Initiative (GRI) Great Transition Initiative (GTI), Corporation 20/20 and the Sustainable Consumption Research and Action Initiative (SCORAI).  For more information, visit www.tellus.org.

Media Contact:

Melissa Small
GISR
melissa.small@ratesustainability.org
617. 247.0700 Ext. 167

The bill would, among other things, strengthen national building codes for energy efficiency in new buildings, stimulate private investment in efficiency upgrades through a financing initiative, increase manufacturing and supply chain efficiency including through the establishment of a new DOE program – SupplySTAR – and boost energy efficiency in federal facilities and operations.

“Energy efficiency is a proven job creator, and it saves homeowners and businesses money, which strengthens the overall economy,” said Anne Kelly, Director of BICEP. “Efficiency measures also take effect faster than many other energy policies, and the Shaheen-Portman bill is a solid step forward toward tackling the challenges of climate change. We urge members of Congress to pass this legislation quickly so that citizens and businesses can begin to see its benefits as soon as possible.”

This statement of support follows the launch of BICEP’s “Climate Declaration,” which was signed by 33 major U.S.-based businesses, urging federal policymakers to take action on climate change. The Declaration asserts that a bold response to the climate challenge is one of the greatest American economic opportunities of the 21st century, though carbon-cutting U.S.-based initiatives like energy efficiency.

Over the course of an ongoing campaign, other leading businesses, as well as individuals, will be encouraged to sign the Declaration and join the call to action. A full list of signatories is available at climatedeclaration.us.

About Ceres

Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit http://www.ceres.org

BICEP (Business for Innovative Climate & Energy Policy), a project of Ceres, is an advocacy coalition of businesses committed to working with policy makers to pass meaningful energy and climate legislation enabling a rapid transition to a low-carbon, 21st century economy – an economy that will create new jobs and stimulate economic growth while stabilizing our planet’s fragile climate. BICEP is a project of Ceres. For more information and a list of member companies visit: http://www.ceres.org/bicep

“Climate change is fundamentally changing the United States, and American taxpayers are paying a huge price for it,” said Ceres president Mindy Lubber. “The cost of withered crops, submerged streets, hurricane damage and wildfires eventually comes out of our own wallets. Crop insurance losses from last year’s drought alone cost every person in America $51.”

Ceres compiled data showing rising costs to three federal programs, as well as growing financial exposure for state taxpayers in hurricane-prone states. Among the findings:

Floods

The National Flood Insurance Program (NFIP) is staggering under massive losses after Hurricane Sandy, which triggered more than 115,000 new claims in just the first two weeks after the storm. Although NFIP collects about $3.5 billion a year in premiums, the amount of claims the agency has paid out has exceeded the amount of premiums collected in four of the past eight years. Last year's losses in Sandy's wake are expected to approach $8 billion.

“That’s $25 for every American, and that figure doesn’t even include the $50 billion of disaster relief that Congress approved in January for Sandy-impacted states,” Lubber said.

Food

Taxpayers subsidize the Federal Crop Insurance program that was created during the 1930s Dust Bowl to protect farmers against crop losses. Federal crop insurance losses, due in part to the devastating, ongoing drought, have tripled in the past three years to $16 billion in payouts for 2012, or $51 for every man, woman and child in America.

“This year will likely be costly too,” Lubber said. “The latest numbers from the U.S. Drought Monitor show more than 64 percent of the country is now experiencing some level of drought.”

Fires

In 2012, more than nine million acres burned in wildfires — an area larger than the state of Maryland — making it the third-worst fire year in U.S. history. In 2012, the Forest Service overspent its available fire suppression budget by $400 million, as it has almost every year for the last 20 years, transferring millions of dollars away from other land management projects. And climate models show a likely increase in fires in coming years.

“The costs are not only borne by the federal government,” said Lubber. “Wyoming and Montana spent more than $90 million of state money fighting wildfires in 2012.”

State taxpayer exposure

Extreme weather, influenced by climate change, creates other taxpayer risks. State governments are increasingly liable for hurricane damages as private insurers pull out, leaving state taxpayers subsidizing insurance loss claims for homes and businesses.

The state insurer in Florida, for example, is carrying the burden of more than one million homeowners’ policies — a financial catastrophe just waiting for state taxpayers the next time a major hurricane hits Florida. State government-loss exposure in hurricane-prone states (such as Florida, Texas and Massachusetts) now exceeds $885 billion, a 16-fold jump from 1990.

“As Americans pay their taxes on April 15, let’s consider what our political leaders — in Washington and our state capitals — are doing to address climate change,” Lubber added. “Let's hope, for our wallets’ sakes, they're tackling the issue head-on.”

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For more information, or to request an interview, contact Peyton Fleming at fleming@ceres.org, phone (617) 733-6660.

Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand theadoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion.