Blog Posts

Climate change poses an urgent threat to the American economy. For many companies, the physical and economic dangers of climate change are clear, and delaying action is no longer a viable option. Last fall, a series of reports made very real the present risks of climate change. These reports underscore that keeping average global temperature rise to no more than 1.5-degrees Celsius and avoiding the worst effects of climate change requires dramatically increasing the pace and scale of greenhouse gas (GHG) emission reductions.  Fortunately, companies across all sectors of the economy understand what is at stake and are already heeding this pressing call for action, by taking concrete steps to accelerate the transition to a zero-carbon economy and ensure they remain competitive in the global economy. More and more, major U.S. companies, including Apple, Bank of America, Citigroup, Coca-Cola, Kellogg’s, Mars Incorporated and Nike, are making ambitious commitments to reduce emissions in their operations and across their supply chains. They do this not just because it is the right thing to do, but also because they have done the math and know that it makes business sense. However, the private sector cannot tackle climate change on its own. The sum total of corporate commitments to reduce emissions are insufficient to meet long-term climate goals and mitigate the impacts of a warming planet. We also need strong policies such as a well-designed price on carbon.  Thanks in part to the cascade of new scientific findings showing the devastating effects of climate change and to an energized U.S. House of Representatives, momentum is building for climate action at the federal level. While the Green New Deal has certainly received significant attention, there has been a slew of other activity among members on both sides of the aisle—including several bipartisan carbon pricing proposals introduced within the last year.  Seizing on this new momentum, companies large and small—including Ben & Jerry’s, DSM, JLL, Johnson & Johnson, New Belgium Brewing, PSEG and Seventh Generation—will take Capitol Hill by storm this spring to raise their collective voice and call for a meaningful federal price on carbon. A well-designed price on carbon is a critical element of the necessary legislative response to climate change, and would help drive emissions reductions while strengthening the overall economy and creating a stable, predictable policy environment for U.S. companies and communities.  Here in the U.S., we already have evidence that economic growth and emissions reductions can go hand in hand. States and regions that have implemented carbon pricing have some of the strongest economies in the country. For example, the Regional Greenhouse Gas Initiative (RGGI) is a cap and trade program (a type of carbon pricing) for the electric power sector in the Northeast and Mid-Atlantic states that has been in place since 2008. A recent report found that RGGI has helped reduce the electric power sector’s greenhouse gas emissions 40 percent since 2008. At the same time, electricity prices in the region have decreased by 6.4 percent, while they have increased by 6.2 percent on average in all other states. The economies in RGGI states also grew by an additional 4.3 percent relative to non-RGGI states during that time. Another strong example is the state of California—the fifth largest economy in the world and home to one of the fastest growing and most innovative sectors of the economy. It also happens to have extremely ambitious climate policies, including a statewide carbon price in the form of a cap and trade program. As in the RGGI states, as California’s emissions have declined, the state’s economy has flourished. Because they understand the risks of climate change, as well as the economic opportunities of tackling climate change and spurring clean energy development, the business community also increasingly supports climate action. Major American corporations are stepping up to support climate action and carbon pricing. Nearly 40 Fortune 500 companies have declared that “We Are Still In” the Paris Agreement. Corporate support for a carbon price is perhaps most clearly articulated by members of the Climate Leadership Council, including ExxonMobil, Shell, BP, GM, Johnson & Johnson, P&G, PepsiCo, Santander, Schneider Electric and Unilever. Institutional investors are even more clear and consistent in their call for a price on carbon. Last year at COP 24, 415 investors from around the globe—many based here in the U.S. and together representing over $32 trillion in assets under management—called on governments around the world to step up action to tackle climate change, including a meaningful price on carbon. Support for climate action is also building among everyday Americans. A March 2018 poll of registered voters by Gallup found that 71 percent of respondents favor a carbon tax on fossil fuel companies and support using the revenue to reduce other taxes. The poll found that on average Americans are willing to pay almost 15 percent more on their energy bills for this. In addition, the poll found that the most popular uses of the significant revenue raised from a carbon price are clean energy investments, infrastructure investments and transition assistance for fossil fuel workers and associated communities. The impacts of climate change on our economy and in our communities become more real and immediate every day. We need a strong and comprehensive policy response equal to the severity of the climate challenge—and that should include carbon pricing. We urge companies to join their peers in May to raise their voices in support of a meaningful price on carbon.  This blog was originally published by Smart Energy Decisions.

Water scarcity and water crises are top global risks, according to the World Economic Forum. Climate change is already having a profound effect on global water cycles, resulting in both longer and more severe droughts and more frequent extreme precipitation and flooding events. Increasing competition for finite water resources among industry, agriculture, and an expanding population is exacerbating these impacts and the underlying risks. For all of these reasons and more, water risk has attracted widespread investor attention and the Dutch asset manager ACTIAM is at the forefront of both research and action on this issue. With $63 billion in assets under management (AUM), ACTIAM proactively shares its approaches and key lessons learned on water issues with the global investor community. For example, it contributed to the development and launch of Ceres’s Investor Water Toolkit, a “how-to” guide for institutional investors on integrating water issues into portfolio management practices. ACTIAM has also set itself a groundbreaking goal: By 2030, it hopes to be water neutral. In practical terms, this means the companies in the firm’s portfolio will “consume no more water than nature can replenish and cause no more pollution than is acceptable for the health of humans and natural ecosystems.” This commitment provides important insights for investors pursuing portfolio-wide approaches to understanding water risks and sets a high bar for mitigating those risks. I recently spoke with Hans van Houwelingen, ACTIAM’s CEO, about the importance of water risks to investors and ACTIAM’s unprecedented, portfolio-wide water neutrality goal. Read the full interview here.

Ceres’ Kristen Lang (Senior Director, Company Network) recently interviewed Levi Strauss & Co.’s Sustainability Vice President Michael Kobori about the company’s ten-year relationship with Ceres, their history of engagement and their sustainable business strategy. Kobori highlighted some of the key moments for Levi’s and Ceres in the last decade, including decisions the company made to be a leading voice on tackling climate change, assessing the chemicals it uses and reducing both its water and carbon footprints as it aims to become a “Net Positive” company. ​ KL: When Levi Strauss & Co. first joined the Ceres Company Network in 2009, what was driving your company then to want to be a sustainable business leader? And why did you identify Ceres as a key partner? MK: Back in 2009, we had just completed our first product Life Cycle Assessment (LCA), which showed us the full environmental footprint of a pair of Levi’s 501s--everything from growing cotton to production on the front end and consumer use and care on the back end. We recognized that our greatest impacts in terms of our material environmental, social and governance (ESG) issues of water, chemistry, carbon and people were in cotton agriculture and consumer use. So we set out to address those. Working with Ceres made sense because the organization was both very credible with key stakeholders and a trusted advisor to the private sector. Ceres also had—and still has—a reputation of not just passively advising companies on their performance, but also of challenging them to do better. KL: Looking back over the past decade, how has your partnership with Ceres shaped Levi Strauss & Co.'s sustainable business strategy? Is there a moment that stands out as a particularly important point of collaboration and impact between Levi Strauss and Ceres? MK: We’ve always looked to Ceres for advice and to challenge us on what our vision of the future could be. We paid close attention to Ceres’ report “The 21st Century Corporation: The Ceres Roadmap for Sustainability,” for example. Two particular collaborations really stand out: One is our partnership in the Business for Innovative Climate and Energy Policy (BICEP) network.  Since we joined in 2009 as a founding member, BICEP has grown to include more than 50 companies, including other leading consumer brands and Fortune 500 companies. When the current administration announced that the U.S. would withdraw from the Paris Climate Agreement, BICEP helped form the “We Are Still In” coalition, which now includes more than 3,600 investors, companies, mayors, governors, college presidents and other leaders still committed to achieving the Paris Agreement’s goals. Our work with BICEP also inspired us to establish industry-leading Science Based Targets for climate last year. The other standout is the Ceres-led engagement on our Screened Chemistry program. Ceres brought together key stakeholders to discuss what was then a nascent idea to screen all the chemicals we used, identify which ones should be phased out and seek safer alternatives. This engagement was a real sea change for the apparel industry because it moved us from an approach guided by lists of prohibited chemicals toward a hazard-based approach in which we now seek  to use only chemicals proven to be safer. We’ve since seen four major apparel companies adopt this approach, and the idea continues to gain steam. Working with Ceres at the outset helped us think beyond just our company, or even just the apparel sector, and recognize that this was a game-changer for all kinds of companies--and for the chemical industry, too. KL: In the last ten years, what have been one or two defining moments for Levi Strauss & Co. that shifted the company’s perspective on what it means to be a sustainable business leader? MK: One happened a few years ago, when we realized that we needed to shift from simply reducing our negative impacts to creating more positive impacts. The notion of having a “Net Positive” impact on the world truly began to animate and influence our plans and goals, even going beyond the notion of a circular economy. The other moment came in March of this year, when we once again became a public company after nearly 35 years. Our CEO, Chip Bergh, has said that becoming public is not the end, but rather the beginning of a new journey for us. He said, “There is no question in my mind that our value and our values are inextricably linked, and I believe it is false to say we--or any company--must choose between business performance or responsible social conduct. The most successful companies do both. That’s how they drive growth, strengthen their brand and keep their people inspired and engaged.” That’s a fantastic message to have emphasized from the top on one of the most important days in the company’s history. It helps us set the tone for the future in a very positive way. KL: Looking ahead to the next five or ten years, what are the environmental or social issues that are most critical for your company? And how do you hope to work with Ceres to tackle those challenges and advance your sustainability journey?  MK: The four issues that have the greatest material impact on our company – and the entire apparel sector – are water, chemistry, carbon and people. In addition to chemistry, the climate-water nexus will be a major concern for all companies, especially those with supply chains of any sort, as we struggle to address the accelerating impacts of climate change and extreme weather events. The other dynamic that carries both great opportunities and great challenges is the growth of artificial intelligence and machine learning, which could make our forecasts more accurate and enable customers to order exactly what they want. That, in turn, would enable us to essentially make what we sell, rather than sell what we make, resulting in massive efficiencies and waste reduction. Technology will also have a significant impact on production, with attendant impacts on the unskilled labor jobs that the apparel sector currently provides, and relies on, in many developing countries. We’ll look to Ceres as these issues develop to help guide our approach and strategy. Importantly, we’ll also look to Ceres to help us address and realize the opportunity that our CEO described by demonstrating that financial success and sustainability are inextricably linked, and that sustainability is integral to how businesses should operate in the 21st Century. This blog is one in a series celebrating Ceres' 30th anniversary and showcasing how our Investor Network, Company Network and Policy Network members work to help Get US There: to a just and sustainable global economy. Levi Strauss and Company’s Senior Vice President and Chief Communications Officer Kelly McGinnis  will be speaking at the closing plenary session of the 2019 Ceres Conference on Wednesday May 1 on “Brand Power: The Role of Corporate America in Advancing Social Issues.”

A series of critical developments in the climate and energy space have converged to alter the field of play for power companies — making it an important moment to take stock of power sector progress on climate action. With renewable energy out-competing coal and other sources of electric power, climate change alarm bells blaring, a broad swath of new company commitments to reduce greenhouse gas (GHG) emissions, and increasingly engaged investors, we're seeing an entire sector of the economy transform. While the sector's overall emissions increased slightly in 2018, largely due to increases in natural gas generation, electric power has otherwise led other sectors in reducing CO2 emissions in the U.S. over the past decade, according to the 2019 Sustainable Energy in America Factbook. Meanwhile, over the past year, many of the largest power companies and biggest CO2 emitters in the sector have issued more robust climate risk reports and made deeper commitments to medium- and long-range GHG reductions.  These announcements have come at a crucial time, with the recent release of the Special Report on Global Warming of 1.5°C by the Intergovernmental Panel on Climate Change (IPCC) highlighting the critical need for the power sector to achieve net zero emissions before 2050 and to supply clean energy to support a broader range of uses in order to avoid the worst impacts of climate change. The IPCC report highlights the significantly increased climate-related impacts expected under a 2°C warming scenario compared to 1.5°C, a difference that could prove existential for entire countries — not to mention devastating for the global economy. One doesn't have to look into the future to see such climate-related economic disasters. Right now, the power sector is reeling from the fallout from PG&E's massive bankruptcy, referred to by the Wall Street Journal as the first climate change-related bankruptcy. Against this backdrop, it is encouraging that there has been a surge of companies releasing climate disclosures and setting meaningful GHG reduction goals, such as science-based targets. These commitments have been enabled by factors including: Decreasing costs for renewable energy, which gives company executives more confidence in their ability to sustain emission reductions Increasing pressure from investors, via initiatives such as Climate Action 100+, which urges companies to address climate risks and opportunities associated with climate solutions Customer demand for clean energy, especially from large corporate customers seeking to procure 100% renewable energy through initiatives like RE100 Cities and states increasing their ambitions and setting goals for clean energy and carbon reductions The vacuum in leadership at the federal level, which makes it more essential for companies to fill the void Many U.S. power companies have also undertaken climate scenario analyses. Companies issuing reports based on such analyses include AES, PPL, Duke Energy, Southern Company, Dominion Energy and CMS Energy. Among these published analyses, one of the strongest examples of climate leadership emerges in the report from the Virginia-headquartered AES. The company's climate scenario report is well aligned with the recommendations of the Task-force for Climate-related Financial Disclosures (TCFD) — a group that has created comparable and consistent disclosure standards that companies can use to show climate resilience to their investors — and utilizes three climate scenarios, including a "well-below 2-Degree Celsius" scenario. AES details its new focus on four primary "Clean Energy Growth Platforms." These platforms, which are intended to move the company toward decarbonization, are: Continued growth of renewables such as wind and solar Exchanging less carbon-intensive Liquified Natural Gas (LNG) for oil-fired & diesel assets Deployment of energy storage to build grid reliability and flexibility Investment and promotion of energy efficiency AES also outlines a shift in investment away from coal and toward renewable energy assets, with its CEO emphasizing that "We are even more pleased to see that the results show our actions make us a more resilient company across various climate scenarios." Importantly, in light of the ever-more-favorable economics of renewable energy, it is reasonable to anticipate that the company's planned reliance on LNG will be less than what the company envisioned in its report. Meanwhile, late last year, Xcel Energy disclosed its long-range GHG reduction plans, announcing a bold new commitment to provide 100% carbon-free electricity to its customers by 2050 and achieve an 80% reduction by 2030. Xcel thus became the first major U.S.-based power company to commit to carbon-free electricity across its entire service territory and raised the bar for climate ambition across the sector. Investors driving action These disclosures and commitments are often in response to investors' explicit requests. As Mark Carney, the Governor of the Bank of England recently explained, financial firms with nearly $110 trillion in assets under management now support the standards put forth by the TCFD and "...there has been a step change in the demand and supply of climate reporting." One key aspect of all this transformation is the role that shareholders have played to encourage action. Investors are increasingly focused on the material financial implications of climate change and recognize that if companies make investments that are not prudent over a long time horizon, the risk of stranded assets and potential write-downs increases. As AEP Executive Vice President and Chief Financial Officer Brian X. Tierney aptly noted, "As the demand for climate-related disclosure continues to grow among investors, so does the need to provide accurate and consistent data that is relevant for AEP and our industry." While we have witnessed demonstrable progress, and recent U.S. power company commitments are encouraging, the sector still has a long way to go. Many companies have neither set goals nor shown the necessary level of ambition. This coming year will require a continued ratcheting-up of commitments, and will challenge companies in the sector to display increased ambition and a commitment to finding innovative ways to lead on climate. They will be nudged along by Ceres' Commit to Climate initiative, as well as by voices like the Climate Majority Project — who recently launched an investor-led "Net-Zero by 2050" effort urging other power companies to follow Xcel's lead. Investors will pay close attention to this year's Annual General Meeting season, looking for indications of improved clean energy transition planning, enhanced climate scenario analyses and accountability around achieving these goals — such as via executive compensation plans tied to achieving them. These investors understand, as do many consumers, employees, regulators, and lawmakers, that increasing the pace and scale of this transformation is paramount to the sector's — and the economy's — long-term success. This post originally appeared on Utility Dive.

Political participation is hard. In a democratic society, it is also a right that must be preserved. Ten years ago, Nike let Ceres know that when it came to climate action, they wanted their voices to be heard on Capitol Hill. At the time, their voice as an energy purchaser and a consumer brand was not deemed central to the climate debate. Unlike in the case of traditional energy providers, it was thought companies like Nike, Levi Strauss & Co., Starbucks, Sun Microsystems and Timberland did not have "skin" in the game.  Nothing could have been further from the truth. As lawmakers and the national media quickly realized, these companies had particularly thick "skin" in the game. They understood the economic risk as they had cotton, coffee, cocoa and complex supply chains at risk—all of which they knew would be impacted by a changing climate. They understood the risk to people, as they had farmers and communities and, like many of us, children and grandchildren in the game. The tired notion that the energy providers should be the only corporate voice at the negotiating table died one day in 2009, when five courageous companies stood up to declare with Ceres, "American Businesses Agree: The Climate is Right for Action."   And with that, the game changed. Nike came up with the name: Business for Innovative Climate and Energy Policy, otherwise known as the Ceres BICEP Network. The five stand-out companies grew their ranks to a critical mass so that in 2010, when Proposition 23 threatened to kill California's historic cap and trade bill, BICEP companies were able to weigh in to make their opposition clear. The strength of their voices in support of climate action neutralized the California Chamber of Commerce and BICEP scored its first win.  ​ That was just the beginning of BICEP’s work to mobilize businesses and make the business case for climate legislation. In 2012, when the auto companies agreed to tighten federal Corporate Average Fuel Economy (CAFE) standards for vehicles, BICEP companies stood up in support. Then, in 2013, as President Obama set forth his Climate Action Plan, Ceres brought more than 300 companies to the table under a compelling banner: "Tackling Climate Change is one of the Greatest Economic Opportunities of the 21st Century. . . and simply the right thing to do."  President Obama would repeat that compelling phrase, while naming the names of major U.S. companies that had stood up for climate action. Lawmakers and the media were beginning to understand that energy-consuming companies indeed had “skin in the game” and were now a powerful force in the climate debate.  The Ceres BICEP Network went on to grow in size and influence to build bipartisan support for countless measures, one of which was the Clean Power Plan, the nation’s first standard to reduce the carbon footprint of the electric power sector. Introduced in 2014, the policy provided an opportunity for businesses to demonstrate that they were seeking what some called "legislative guardrails" when it came to climate change. BICEP companies made clear to lawmakers that they wanted policy certainty to create a predictable, stable businesses environment. It wasn’t just that acting on climate was the right thing to do, but also that companies recognized the enormous risks of climate change—as well as the opportunities that could come from addressing the climate challenge. Together, BICEP companies were making it clear that they wanted serious action, and they were calling on leaders in Congress and in statehouses around the country to tackle climate change.  In 2014, BICEP companies also saw the need to make their voices heard on state policy as a way to maintain momentum on climate action and continue developing markets for clean energy. Since then, the energetic advocacy of BICEP companies has played a crucial role in a number of key state policy wins on climate and clean energy, catalyzing local investment, job creation and economic growth in states from California to Massachusetts, and from Michigan to North Carolina. The Ceres BICEP Network also came to play a role on the world stage. In 2015, BICEP companies helped mobilize dozens of other companies from various sectors to call for a strong deal at COP 21, playing a critical role in the landmark adoption of the Paris Climate Agreement. When the historic accord came under threat from the Trump administration in 2017, and the climate debate had reached a new low, BICEP companies declared “We Are Still In” and committed to achieving the goals of the agreement. Since that historic moment, thousands of companies have joined the ranks of We Are Still In and are taking action to ensure the U.S. remains a global leader on reducing greenhouse gas emissions. During the past 10 years, the Ceres BICEP Network has raised the bar for business leadership on climate and clean energy advocacy. Working on both sides of the aisle on a host of legislative and regulatory issues—including carbon pricing, the phase down of hydrofluorocarbons, stronger clean energy standards and more—the Ceres BICEP Network has consistently called for what can only be referred to as “science-based policy” because when it comes to climate change the science is clear, and the time to act is now. Today, we thank those five founding companies for their vision. We are grateful for the dozens of other companies that have since joined the Ceres BICEP Network and the several hundred others who have stood with us in key states, at the COPs, on the air, on the ground and in the offices of those charged with preserving both our planet and our economy. For ten years, BICEP companies have been at the helm, preserving our democracy and putting their political muscle behind tackling the greatest challenge of our time.      Feeling inspired? Join us this spring in Washington DC to call for meaningful price on carbon. Along with our partners, the Ceres BICEP Network is about to converge on Capitol Hill for full day of advocacy: LEAD on Carbon Pricing. We urge companies to bring their stories and their voices to Washington and to educate lawmakers on the need for comprehensive climate action. Game on.

In March, New Mexico lawmakers approved two clean energy bills that will be a boon for the state’s overall economy and for individual businesses both large and small. The governor has signed them. The Efficient Use of Energy Act will boost investments in programs and services for efficiency by up to 67 percent — making it easier and more affordable for New Mexico residents and businesses to purchase efficient equipment, upgrade lighting, patch air leaks and take other steps to cut energy waste. Beyond the immediate cost saving benefits of implementing efficiency measures, this legislation will provide a myriad of other benefits to New Mexicans by improving the comfort of homes and buildings. It will also create new local jobs that can’t be outsourced in hands-on industries like installation and construction. The economic benefits of energy efficiency extend to every New Mexican, regardless whether they directly participate in efficiency programs. Over the last decade, efficiency programs for the Public Service Company of New Mexico, El Paso Electric and Xcel Energy reduced electricity demand by 7 percent all together, saving customers $400 million. In fact, every dollar spent on energy efficiency measures saves customers as much as $3 on their electricity costs. How is that possible? When homes and businesses collectively reduce electricity waste, they also reduce overall demand and congestion on the grid. As a result, utility companies can avoid investments in costly new infrastructure, which consumers pay for through higher electricity rates. In other words, expanding energy efficiency will help control energy costs for all New Mexicans. As a result, families and businesses have more money to spend and invest in their local communities. Electricity is a major expense, and New Mexico’s largest industries — healthcare, tourism and research — use a lot of it. At a time when companies must compete internationally, it is crucial that the state keep its electricity costs low and predictable. Investing in energy efficiency can help do just that. In addition to expanding energy efficiency, New Mexico lawmakers also passed the Energy Transition Act, which will dramatically increase the state’s renewable energy use, helping New Mexicans transition away from conventional fuels. The bill also directs $40 million to help displaced workers in communities like San Juan County, where the coal-powered San Juan Generating Station is shutting down because it can no longer compete with cheaper clean energy sources like wind and solar. As older plants like the one in San Juan County are taken off line, lawmakers should continue to support new jobs in fast-growing industries like energy efficiency and renewables, while also investing in the communities most impacted as the energy industry shifts. Together, these two bills will help drive economic development in New Mexico, especially as a growing number of companies look for ways to invest in clean energy. Nearly half of Fortune 500 companies have set goals to reduce greenhouse gas emissions and invest in both renewable energy and energy efficiency. Companies set these goals not only because it is the right thing to do for the environment and their communities, but also to help them cut energy costs, reduce exposure to volatile fossil fuel prices and stay competitive. As more companies seek to realize the bottom-line benefits of clean energy, New Mexico’s commitment to clean energy sends a signal that it is open for business. This op-ed originally appeared in The Santa Fe New Mexican. 

Regardless of political leanings, companies understand that climate change presents a significant risk to the American economy and recognize the urgent need for action. “One of the most important things that companies can do is to continue to elevate the voices that say ‘this is beyond politics,’” says Anthony Leiserowitz, Director of the Yale Program on Climate Change Communication in a recent Ceres webinar. He is absolutely right. Sadly, climate change has become a deeply partisan issue over the last few years, and the responses to proposals like the Green New Deal threaten to further politicize this global challenge. Businesses, however, don’t view taking action on climate as a political issue: they treat climate change as an economic risk—and an opportunity. For businesses across many sectors, the economic realities of climate change are clear, and delaying action or denying science is no longer a viable economic possibility. Last fall, a series of reports brought the threats of climate change to life. The Intergovernmental Panel on Climate Change report warned that global temperature rise must be limited to 1.5 degrees Celsius in order to avoid dire consequences; and the National Climate Assessment report detailed how climate change is already having economic and health impacts across the nation. Together, these reports underscore that avoiding the worst effects of climate change will require dramatically increasing the pace and scale of greenhouse gas emission reductions. Companies are responding by making commitments and taking action to reduce emissions in their operations and across their supply chains. In fact, more than 160 major companies including Apple, Bank of America, Citigroup, Coca-Cola, Mars Incorporated, and Nike have committed to sourcing 100 percent of their electricity from wind and solar. Hundreds more companies have set ambitious science-based targets to reduce greenhouse gas emissions, while others have increased their investments in electric vehicles. They take these actions not only to avoid risks to their bottom lines, but also, as Leiserowitz says, to take advantage of the opportunities throughout every sector of the economy. Companies see that a low-carbon economy is the future, and are taking steps to accelerate this transition. This type of action is increasingly what U.S. consumers have come to expect. When asked by Yale researchers through a series of surveys over the last decade who should act to address global warming, Americans have consistently responded that corporations and industry bear the most responsibility. Furthermore, 68 percent of Americans believe that corporations should do even more than they currently are to address global warming, including over half of those who self-identified as Republicans. The bottom line? Increasingly, people are looking for ways to “vote” with their dollars. Americans view companies not simply as providers of a specific service, but also as partners in helping meet larger sustainability goals. In the eyes of consumers, companies have something to gain by prioritizing sustainability. Many companies have already taken this viewpoint to heart, and a growing number are speaking up to advocate for policies that facilitate the transition to a low-carbon economy. According to the Yale research, the majority of Americans are on their side. In fact, the Yale Program for Climate Change Communications finds that Americans overwhelmingly believe that policies that promote clean energy will improve economic growth and create jobs. While support for climate action is widespread among Americans of all political leanings, there is still work to be done to move policy. Since companies understand firsthand the economic risks and opportunities, they have a leadership role to play in sharing their sustainability stories and making the business case for addressing climate change, engaging with policymakers on both sides of the aisle. With that in mind, in May, companies large and small will take Capitol Hill by storm to raise their collective voice and call for a meaningful federal price on carbon. For our part, Ceres remains committed to mobilizing companies through our BICEP Network and beyond to increase bipartisan ambition around climate action at both the state and federal levels. We will also continue to lift up the voices of the many entities that have declared “We Are Still In” and promised to do their part to meet the U.S. goals of the Paris Agreement. We know that companies increasingly see that the bottom line on climate change goes beyond politics—and is just good business.

By Mindy Lubber and Veena Ramani Let’s add the World Economic Forum to the list of organizations sounding a clarion call on climate change. Their recent risks report identifies climate change as one of the most severe risks that the world faces, and warns, “it is in relation to the environment that the world is most clearly sleepwalking into catastrophe.” Investors heard the wake-up calls early, and have been raising the alarm with companies. Over the past decade, we have seen rapid growth in shareholder engagement on environmental, social, and governance (ESG) issues in general, and on climate change in particular. One of the most important tools that investors have for engaging with companies on these issues is shareholder resolutions. In 2017 alone, investors filed a record 175 proposals on climate change with U.S. and non-U.S companies, with many of them receiving record-high voting support. It is important to keep in mind that investor attention to climate change is not motivated by social good or altruism. As the owners of companies, investors, particularly long-term investors, have a financial interest in ensuring that the board and management can maintain corporate resiliency and build long-term value. Shareholders file climate-related resolutions for economic reasons. They want to be sure company executives and their boards are doing all that they can to prepare for climate-related business and economic disruptions, including operational impacts, regulatory shifts, supply chain ripples, and potential reputation risks. By digging in and engaging on these questions, investors are looking for climate-resilient strategies that strengthen corporate performance and value creation. Non-binding shareholder resolutions are hardly a new tool. In place for nearly a century under the U.S. Securities and Exchange Commission (SEC) Rule 14a-8, the process allows qualifying investors to submit resolutions that can be voted on by all company shareholders. It is a constructive, low-cost way for investors of all sizes to engage with company management and boards in a transparent way. Unfortunately, this process is under attack by interest groups painting these resolutions as driven by investors with political agendas. We believe that this is incorrect, as it implies that investors who file these resolutions are fringe or minor players. In fact, Wall Street icons such as BlackRock, State Street Corp., Fidelity Investments, Vanguard, and other large institutional investors are among those who consistently support climate resolutions. Collectively, these institutions manage over $16 trillion in assets. Additionally, from our perspective, to say that climate resolutions are politically motivated is also untrue. While climate change has unfortunately been politicized in this country, the business and financial risks that it poses to corporate value are very real—and material. Look no further than the recent National Climate Assessment showing that climate change is already impacting all parts of the United States. This report, which was developed based on contributions by 13 federal agencies, predicts that if significant steps are not taken to mitigate climate warming, the damage could shrink the country’s gross domestic product by as much as 10 percent by century’s end. That’s more than double the losses from the Great Recession a decade ago. The business impacts are clear: In 2017, 73 companies on the S&P 500 publicly disclosed a material effect on earnings from extreme weather events, and 90 percent felt the effect was negative. Supply chain disruptions due to climate risk have increased 29 percent since 2012 according to Dow Jones. In addition, the business case for proactive focus on climate and broader ESG issues is also strong. Academic and investment research—including studies by Bank of America Corp., Morgan Stanley, and JP Morgan—show that serious corporate attention to climate and ESG issues delivers higher stock returns, incurs lower capital costs, and lowers volatility risks. So what should companies and boards do when faced with investors who are looking to engage with them, including through the shareholder resolution process, on climate change? Previously, we wrote about the responsibility of the board to oversee material climate change risks and opportunities. The following suggestions build on those made in a previous article.  Engage. Research has consistently shown that boards and management make the best decisions when considering multiple perspectives. Rather than hesitate in the face of investors who are looking to engage on climate change, boards should remember that as owners of the company, investors, have an equal interest in the financial wellbeing of the enterprise, and have an important point of view to bring to the table. The sheer act of dialogue could serve to provide valuable information to boards and management and, importantly, generates goodwill. Ceres’ report Lead from the Top notes that shareholder engagement on climate and ESG is an important step to helping the board build its own fluency in these issues.   Disclose. Our economy and capital markets work best when companies engage in robust disclosure. Company management and their boards have critical roles in helping their companies provide the kind of climate risk disclosure that investors are requesting in shareholder resolutions. Frameworks like the recommendations from the Task Force on Climate Related Financial Disclosures (TCFD) provide an important starting point. By partnering and engaging with investors, boards can help ensure that companies are more resilient, prepared, and profitable in navigating fast-changing global risks. And being prepared is a win-win for everyone. This blog originally appeared on NACD Board Talk.

Thirty years ago, a massive Exxon Valdez oil tanker spilled nearly 11 million gallons of oil into the pristine Prince William sound off Alaska’s coast, affecting 1,300 miles of coastline. It was the worst oil spill in the history of the United States. Local ecosystems were devastated, hundreds of thousands of birds and fish were killed, and the corporation was hit with more than a half billion dollars in liabilities. ​ Just one year before, Americans heard congressional testimony about a buildup of carbon dioxide and other industrial greenhouse gases that were gradually warming global atmospheric temperatures and starting to change the climate. In cities across the U.S., residents complained of smog and air pollution that were limiting their visibility and harming their lungs. Congressional leaders responded with amendments to strengthen one of the most important environmental laws to regulate air quality, the Clean Air Act. The devastating news of the oil spill also struck a chord with a small group of investors who knew there had to be a better way of doing business. These investors, led by pioneer Joan Bavaria, began to mobilize as a coalition, bringing together other investors and environmentalists to re-evaluate the role and responsibility of companies as stewards of the environment and agents of economic and social change. The coalition, initially named the Coalition for Environmentally Responsible Economies, later became known as Ceres. ​ Within just a few months, these founding investors worked with environmental groups to craft a groundbreaking code of conduct for companies called the Ceres Principles (originally named the Valdez Principles). Ceres then co-founded the Global Reporting Initiative (GRI), setting the standard for corporate sustainability reporting, now a mainstream practice used by nearly 13,400 companies. Within a decade, environmental and social issues were being considered and reported on as corporate financial imperatives, not merely externalities. The new frameworks for reporting highlighted the risks and opportunities - providing the tools to not only measure corporate performance on environmental, social and governance (ESG) issues, but also act on them. Over time, Ceres built networks of investors and companies and nonprofit organizations focused on improving corporate ESG disclosure and performance, fostering results demonstrating that superior ESG performance is directly correlated to stronger financial performance. Today, one of those networks, the Ceres Investor Network, is at the forefront of transformational corporate change with some of the most influential asset owners and asset managers in the global economy calling on the companies they own to address their exposures to climate and water risks. Through initiatives such as Climate Action 100+, a global collaboration with our regional partner organizations, investors are moving the largest corporate greenhouse gas emitters into alignment with the objectives of the Paris Agreement. Investors also are demonstrating leadership in sustainable investment decision-making and policy advocacy. More than 400 investors have taken action in line with The Investor Agenda. This agenda, developed with our global partners, highlights investor actions such as: investing in low-and zero-carbon assets, phasing out investment in thermal coal, increasing climate-related financial disclosures, and backing stronger climate policies, such as putting a price on carbon pollution. As we mark 30 years since the ground-breaking investor response to the Exxon oil spill, and Ceres’ founding, we must take stock of how far we have come, and how much we have achieved in tackling some of the greatest sustainability challenges. Investor action on sustainability is no longer a sideline endeavor. Investors working with Ceres have made real inroads shifting capital market systems and incentives to promote sustainability, including by addressing climate-related risks such as those associated with fossil fuels. Yet there is much more work to be done, building on this strong foundation. In order to keep global temperature rise to no more than 1.5-degrees Celsius, consistent with the Paris Agreement, we must drive transformation at a pace and scale the world never has seen before. We must all recognize the power of our investable dollars to accelerate the transition to a just and sustainable global economy that ensures a livable planet for all of us. Going forward, we need investors to step up their efforts and join an all-hands-on-deck effort by all economic sectors, all governments, and all segments of society. This blog is one in a series celebrating Ceres' 30th anniversary and showcasing how our Investor Network, Company Network and Policy Network members work to help Get US There: to a just and sustainable global economy.  Mindy Lubber is CEO and President of Ceres. Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy. This post first appeared on Mindy's Forbes blog. Read more at https://www.forbes.com/sites/mindylubber.  Banner photograph by E.R. Gundlach 

Roughly 50 percent of the Brazilian Cerrado, a global biodiversity hotspot, has been converted to agro-pastoral lands for Brazil’s rapidly expanding soybean industry—and investors are taking notice. They’ve sent a clear signal: it’s not sustainable, and they are calling on the $112 billion industry to eliminate deforestation losses, land conversion, and other damaging impacts in soy production. Failing to act, investors warned in a recently released statement to companies, will negatively impact society and create long term investment risks within the industry. As we mark International Day of Forests today, there should be cause for celebration, but the rapid spread of deforestation and land conversion due to soy and other commodities is dampening the mood. Since the late-2000s, agricultural expansion in Latin America has been supported through land clearing in Brazil’s Cerrado. The Cerrado is a biodiversity hotspot made up of woodlands, shrublands and riparian forests but is also a hotspot for deforestation or land clearing. Roughly 50 percent of Cerrado vegetation has been converted to agriculture and pastures, representing almost half of Brazil’s agro-pastoral land. Fast-growing meat consumption in many parts of the world has sparked a surge in soybean demand, a key commodity for livestock and animal feed. Soy production has more than doubled in just 20 years and it now uses more than one million square kilometers of farmland, twice the size of California. But the industry’s expansion comes at an enormous cost, especially in regions like South America where woodlands and savannah are being cleared every year to make room for soybeans. Greenhouse gas (GHG) emissions are one of the biggest concerns. Converting tropical forests and native vegetation into croplands releases GHG into the atmosphere – lots of it. Soybeans, palm oil and cattle grazing are the primary drivers of tropical deforestation. Agriculture, forestry, and land conversion account for roughly a quarter of net GHG emissions, second only to the energy sector in emissions. Land conversion and deforestation have also been linked to human rights violations and social conflicts, much of it related to land acquisitions, labor conditions and environmentally-damaging farm practices. This month, 57 investors with $6.3 trillion in collective assets under management announced to the industry that greater risk management, traceability, and disclosure of progress toward commitments to address deforestation is needed. In the two-page statement, they call on soybean producers, traders and buyers, as well as consumer goods companies, to eliminate deforestation and land conversion in their soy supply chains. Investors behind the statement are all motivated by the same goal: protecting the long-term value of their investments in the publicly-traded companies in the soy industry, including global traders, food processors and manufacturers, and grocery retailers. They cite the wide-ranging “material” risks in the sector, including: reputational risks, as consumers become aware that a company’s supply chain is linked to deforestation; operational risks, from potential changes in local climates and agricultural yields; and regulatory risks, as governments try to reduce deforestation and land conversion from soybeans. These risks are real and increasingly affect the bottom line. Last year alone, Brazil’s environmental agency imposed $29 million in fines to grain trading houses, as well as dozens of farmers, for activities connected to illegal deforestation. Political pressure is also growing. France, Germany and the United Kingdom are calling on the European Commission to launch tough new action to halt deforestation. In February, eight leading U.S. senators sent letters to a dozen leading investment managers and asset owners, requesting that they outline their strategies for reducing deforestation risks in their investment holdings. The statement came close on the heels of the latest Intergovernmental Panel on Climate Change (IPCC) report calling for deeper, faster action by world governments to limit global temperature rise to 1.5-degrees Celsius to avoid the worst impacts of climate change. It calls on companies to take specific steps, among those: Evidence of well-documented, transparent monitoring and verification systems to ensure supplier compliance with the company’s deforestation policies and goals. Disclosure of progress towards implementation of company commitments to achieve no-deforestation supply chains by 2020. Public disclosure of their direct and indirect GHG emissions (including commodity supply chains) and time-bound goals to reduce those emissions. Given the IPCC report findings and the recognition by the world’s governing bodies and national governments of the increasing risk scenarios from GHG impacts due to deforestation and land conversion, the business-as-usual approach is no longer fiscally responsible and investors have taken notice. While more companies are stepping up their efforts and should be applauded, investors are setting clear expectation: Deforestation creates material market and reputational risks for companies, and is a source of systemic risk across investment portfolios given its contribution to climate change. Stepped up engagement and action by companies and investors on these challenges is the sensible and successful way forward.