Ceres Reports

Benchmarking Air Emissions

Megan Doherty — 2013-05-15T12:10:00Z

This report analyzes the latest emissions from the 100 largest power producers in the U.S. The report shows that the electric industry cut emissions of NOx, SO2 and CO2 in 2011 even as overall electricity generation increased, largely due to increased use of natural gas and growing reliance on renewable energy.

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.

The 21st Century Investor: Ceres Blueprint for Sustainable Investing Summary

Megan Doherty — 2013-05-02T17:55:00Z

This summary report of The 21st Century Investor: Ceres Blueprint for Sustainable Investing (the “Ceres Investor Blueprint”) is a preview of a more detailed document Ceres will release later this quarter. The Ceres Investor Blueprint is intended to guide investors along a path to becoming what we call “sustainable investors" —investors who understand that the 21st century economy will be shaped by powerful forces such as climate change, population growth, rising demand for energy, declining supplies of fresh water and other natural resources, and protection of human rights and worker health and safety. To protect current and future beneficiaries, and maximize risk-adjusted returns, sustainable investors will need to mitigate the risks and seize the opportunities arising from these sustainability challenges.

By operating and investing sustainably, companies and investors will be contributing significantly to the creation of a sustainable economy—one that meets the needs of people today without compromising the ability of future generations to meet their needs. The Ceres Investor Blueprint is designed to help investors act on their growing concern about sustainability by providing a set of 10 concrete action steps that will move them along a path towards becoming sustainable investors.

Hydraulic Fracturing & Water Stress: Growing Competitive Pressures for Water

Megan Doherty — 2013-05-02T03:55:00Z

This Ceres research paper analyzes water use in hydraulic fracturing operations across the United States and the extent to which this activity is taking place in water stressed regions. It provides an overview of efforts underway, such as the use of recycled water and nonfreshwater resources, to mitigate these impacts and suggests key questions that industry, water managers and investors should be asking. The research is based on well data available at FracFocus.org and water stress indicator maps developed by the World Resources Institute.

The research paper provides valuable insights about potential water use/water supply conflicts and risks, especially in basins with intense hydraulic fracturing activity and water supply constraints (due to water stress and/or drought). Given projected sharp increases in production in the coming years and the potentially intense nature of local water demands, competition and conflicts over water should be a growing concern for companies, policymakers and investors.

The bottom line: 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. A key question investors should be asking is whether water management planning is getting sufficient attention from both industry and regulators.

INCR Listing Standards Drafting Committee Consultation Paper: Proposed Sustainability Disclosure Listing Standard for Global Stock Exchanges

Megan Doherty — 2013-04-08T13:10:00Z

A group of leading global investors have created a Consultation Paper with recommendations for integrating sustainability disclosure requirements into listing rules for U.S. and global stock exchanges.

The draft recommendations were developed by nearly a dozen investors who are part of the Ceres-led Investor Network on Climate Risk (INCR). BlackRock, British Columbia Investment Management Corporation, and the AFL-CIO Office of Investment are among those who participated on the INCR Listing Standards Drafting Committee.

The initiative is part of a growing effort by investors and stock exchanges, including NASDAQ OMX, to make sustainability disclosure a consistent requirement for corporate listings on stock exchanges. While several exchanges have adopted their own sustainability listing requirements and guidance, INCR members and NASDAQ OMX have set out to develop a uniform baseline standard that all stock exchanges can use.

Disclosure Framework for Water & Sewer Enterprises

Megan Doherty — 2013-04-02T12:50:00Z

Given the heightened attention to credit analysis across the municipal market, and the shifting operating environment facing issuers within the water and sewer sector, Ceres is issuing this disclosure framework to ensure that all material information is provided to investors in the primary and secondary markets.

This framework was created through outreach to stakeholders on the buy- and sell-sides of the market, including large water and wastewater systems and more than a dozen institutional investors with $40 billion in assets under management.

The framework entails six key areas of disclosure:

Supply Security
Demand Management
Asset Management
Water Quality
Energy Use and Generation
Rates

Insurer Climate Risk Disclosure Survey 2012

Brian Sant — 2013-03-06T18:35:00Z

This report summarizes responses from insurance companies to a survey on climate risk developed by the National Association of Insurance Commissioners (NAIC). In 2012 insurance regulators in California, New York and Washington required insurers that write in excess of $300 million in direct written premiums, and are licensed to operate in any of the three states, to disclose their climate-related risks using this survey. The aim of the survey and Ceres’ analysis of the responses is to provide regulators with substantive information about the risks to insurers posed by climate change, as well as steps insurers are taking in response to their understanding of climate change risks.

Water Ripples: Expanding Risks for U.S. Water Providers

Megan Doherty — 2012-12-11T13:55:00Z

As numerous western states are considering massive new water supply projects, a new Ceres report is suggesting caution.

Citing shrinking federal funds, uncertain water demand and declining revenues to pay for the projects, the report recommends that utilities move carefully before embarking on major pipelines, reservoirs and other new infrastructure that will create financial risks for investors and utility customers alike.

The report also recommends that water demand projections be viewed skeptically by credit rating agencies, investors and policymakers; that investors and credit rating agencies seek better understanding of how rate structures influence demand and revenue streams; and that environmental and consumer groups actively work to build public support for water rates that ensure future water security and affordability.

Power Forward: Why the World’s Largest Companies are Investing in Renewable Energy

Megan Doherty — 2012-12-10T08:00:00Z

Large corporations are increasingly turning to renewable energy to power their operations. Companies are investing in renewable energy because it makes good business sense: renewable energy helps reduce long-term operating costs, diversify energy supply and hedge against market volatility in traditional fuel markets. It also enables companies to achieve greenhouse gas (GHG) emissions reduction goals and demonstrate leadership on broader corporate sustainability and climate commitments.

This report shows that a majority of Fortune 100 companies have set a renewable energy commitment, a greenhouse gas (GHG) emissions reduction commitment or both. The trend is even stronger internationally, as more than two-thirds of Fortune’s Global 100 have set the same commitments.

Through two dozen interviews with Fortune and Global 100 executives and analysis of public disclosures, the report finds that clean energy practices are becoming standard procedures for some of the largest and most profitable companies in the world, including AT&T, DuPont, General Motors, HP, Sprint, and Walmart.

Ceres Annual Report 2011-2012

Brian Sant — 2012-12-07T16:15:00Z

In this report you will find highlights of our work over the past year, including groundbreaking reports that are helping reshape the nation’s electric-power sector; new tools to help industry use water more efficiently; successful efforts to require insurance companies to publicly disclose climate-related financial risks; progress on new stock exchange listing requirements for sustainability disclosure; and a major evaluation of the sustainability performance of 600 large U.S. companies.

Scaling Sustainability: 2012-2015 Ceres Strategic Plan

Brian Sant — 2012-11-05T19:30:00Z

Over the next three years, Ceres will work with its core constituencies to accelerate the adoption of sustainable business practices, integrate sustainability risks and opportunities into corporate and investor strategies, and establish new rules of the road.

Our strategic plan is divided into four mutually reinforcing impact areas: Sustainable Business Strategies, Sustainable Capital Markets, Climate & Clean Energy, and Water Resources. The plan is informed by 23 years of experience working alongside business leaders, investors and public policymakers to create frameworks that reward sustainable performance.

Investor Expectations for Improving Environmental & Social Performance in Canadian Oil Sands Development

Megan Doherty — 2012-10-22T12:50:00Z

A group of 49 investors with $2 trillion in assets under management are calling on Canadian oil sands developers to dramatically reduce the environmental and social impact of their operations by lowering greenhouse gas (GHG) emissions, managing water use, promoting land reclamation and consulting fully with First Nations and other communities affected by oil sands projects. The investors argued that these performance improvements “should be prioritized ahead of unmitigated growth ambitions for oil sands development.”

Oil sands development is significantly more resource-intensive than traditional oil development, creating environmental and social concerns that investors argue may threaten the sector’s long-term viability and growth.

In their statement, investors specifically called on Canada’s Oil Sands Innovation Alliance (COSIA) to:

Set goals and timelines for reducing the greenhouse gas intensity of oil sands production to at least that of conventional oil production, while also providing greater disclosure on research and development efforts and supporting provincial and federal regulations that would lead to significant reductions in GHG emissions.
Manage water risk by setting goals and timelines for minimizing net surface and groundwater withdrawals, and keeping withdrawals within science-based ecosystem limits.
Reduce the rate of land disturbance and increase reclamation, provide disclosure of liabilities, establish wetlands and biodiversity offsets and accept limits to the amount of land available to oil sands development at any given time.
In cooperation with government authorities, fully incorporate the principle of Free, Prior, and Informed Consent in their responsibilities to First Nations, Metis, Inuit and other communities affected by oil sands operations.

Incorporating Environmental, Social and Governance Factors into Investing: A Survey of Investment Consultant Practices

Megan Doherty — 2012-10-05T07:00:00Z

A new Ceres report shows that investment consultants retained by major asset owners such as pension funds, foundations and endowments have generally not considered environmental, social and governance (“ESG”) risks and opportunities as they advise their investor clients on their portfolios. Of the 13 U.S. and international consulting firms surveyed for the report, few have developed expertise in ESG investing, fewer than half believe environmental and social factors can impact long-term financial risk and reward, and only one integrates ESG into its risk/return and asset allocation modeling.

The report, Integrating Environmental, Social and Governance Factors Into Investing: A Survey of Investment Consultant Practices, was prepared by the Investor Network on Climate Risk (INCR), a group of 100 institutional investors with more than $10 trillion in assets under management, and the nonprofit group Ceres, which advocates for sustainable business and investment practices.

Stormy Future for U.S. Property/Casualty Insurers: The Growing Costs and Risks of Extreme Weather Events

Brian Sant — 2012-09-20T14:35:00Z

This Ceres report examines how extreme weather trends may be a harbinger of significant challenges ahead for a sector in which many companies are already confronting profitability and growth challenges. This analysis is based on a careful review of U.S. property/casualty insurance industry financial results as reported by A. M. Best Company in early 2012.

Supplier Self-Assessment Questionnaire (SAQ): Building the Foundation for Sustainable Supply Chains

Megan Doherty — 2012-08-31T12:10:00Z

The Supplier Self-Assessment Questionnaire (SAQ): Building the Foundation for Sustainable Supply Chains will be useful for all companies seeking to strengthen their supply chain engagement, though it was designed with the industrial goods sector in mind, as well as those that are just beginning to address sustainability issues in their supply chains. Drawing on leading practices in the field, and addressing environmental, social, and governance issues, the SAQ is a “conversation starter” for companies to use with their suppliers as they begin to assess the sustainability risks in their supply chains. The goal is to help companies be more competitive and build resiliency in their supply chains by identifying, assessing, managing and disclosing supply chain sustainability risks.

The SAQ is part of a broader strategy to raise the bar of supply chain sustainability performance across the global economy. Traditionally, supply chain management has focused on whether a particular supplier facility is complying with certain minimum standards or codes of conduct related to treatment of workers or environmental impacts.

Sustainable Extraction? An Analysis of SEC Disclosure by Major Oil & Gas Companies on Climate Risk and Deepwater Drilling Risk

Megan Doherty — 2012-08-02T11:55:00Z

This report, based on annual financial filings submitted in Q1 2011 by 10 of the world’s largest oil and gas companies, finds that companies making extensive capital investments related to climate change and deepwater drilling are failing to adequately disclose their substantial material risks in areas such as new regulations, adverse environmental impacts and water availability constraints.

Investors are looking for substantial improvement in these disclosures. The SEC’s guidance for disclosure does not yet require complete, and therefore completely accurate, assessment of companies’ climate or deepwater drilling performance or risks. This report contains detailed recommendations for improving both disclosure and performance.