Blog Posts

Major food growers and retailers are looking hard at their growing and distribution practices to conserve soil nutrients and protect water quality. It’s an effort to reduce impacts throughout the entire food supply chain.  

2018, like many recent years, is on track to set dismal records: more extreme weather events, more droughts in more places, more flooding and faster sea level rise in more places, more disruption to agriculture at every level, and more negative impacts on industrial supply chains. We were reminded of climate change’s devastating impacts last week as Hurricane Michael, the third-most intense storm ever recorded with a U.S. landfall, slammed into the Florida Panhandle, causing death and destruction there and throughout the Southeast. Michael followed close on the heels of a sobering wake up call from from the world’s leading climate scientists, letting us know that if we continue on our present course, and see a potential rise of 2-degrees Celsius or more, the dire impacts we are already seeing from climate change will be compounded. Untold trillions of dollars will be lost, and untold millions of people will suffer, to say nothing of the species we share the planet with. The scientists at the U.N.’s Intergovernmental Panel on Climate Change (IPCC) explicitly point out that the worst impacts will continue to be felt by the global poor, and warn us to prepare for refugee and immigration crises the likes of which we’ve not seen in modern history as millions begin to flee the worst effects of climate change in their regions. These aren’t predictions from some dystopian novel: they’re happening now, to us, to our children, and to our grandchildren. If we want to spare our children and grandchildren across the world from the ever-worsening effects of climate change, we have less than 12 years left to bring about a radical departure from business-as-usual. Twelve years, give or take, isn’t much time. And yet with the right leadership, it can be enough, as we already know what we have to do, know how to do it, and have many of the tools to do the work of changing course. Unfortunately, here in the U.S., we have an anti-science administration in the White House that is taking us backwards, trying to erase years of progress. The Trump administration continues to promote fossil-fuel company profits despite considerable savings that can be realized, here and now, from accelerating the shift to clean energy. Tellingly, the administration recently proposed major rollbacks in regulations governing emissions of potent greenhouse gas emissions such as methane, and is seeking to weaken automobile emissions standards and allow more emissions from coal-fueled power plants (and wants more of them built). In others words, it seems to be taking a 19th Century approach to the challenges and opportunities of a 21st Century world. Fortunately, and critically for all of us, when it comes to climate change, many hands are indeed rushing on deck to pick up the slack. Investors, companies, and policymakers are clear-eyed and forward-looking in this moment of crisis and are increasingly bringing their efforts up to the speed and scale needed to get us to a just and sustainable future. From the Global Climate Action Summit in San Francisco to Climate Week in New York City, the month of September alone highlighted the potential and the progress of the private sector in its efforts to tackle the greatest challenge of our time. “Investors are in a unique position to mitigate the threats of climate change,” said Betty T. Yee, Controller of the state of California, and Ceres board member, at the Summit. Yee also serves on the boards of the California Public Employees' Retirement System and the California State Teachers' Retirement System. “With trillions of dollars under management globally, we can demand accountability from the largest corporate greenhouse gas emitters and hold governments responsible for the impact of their decisions.” Giving evidence to Yee’s claim, the Summit saw more than 400 investors with $32 trillion in assets under management taking action in line with The Investor Agenda. From investing in low-carbon, clean energy opportunities to phasing out investment in thermal coal to engaging the world’s largest corporate greenhouse gas emitters to curb emissions through the Climate Action 100+ initiative, investors showed the world they are scaling up their efforts to achieve the goals of the Paris Agreement. Companies, too, are committing to the low-carbon future by adopting science-based targets for reducing greenhouse gas emissions and adopting electric vehicles (EVs) across their fleets. They are examining their global supply chains to identify climate and water risks and disclose, mitigate, and even eliminate them. This week, we welcomed two major food and beverage companies to the AgWater Challenge who are committing to better preserve and protect freshwater resources in their supply chains, recognizing the nexus between these issues and climate change. Utility companies worldwide are shifting to renewable energy platforms, even utility giants like American Electric Power (AEP), which delivers electricity to more than five million customers in 11 states and is the highest greenhouse gas emitter in the energy sector. Earlier this year, and in response to  investor and customer pressure, AEP committed to reduce its emissions 60 percent by 2030 and 80 percent by 2050. The company is significantly stepping up its investment in renewable energy and is taking concrete steps to accelerate the phase-out of coal-fired power generation. And our political leaders at the state and local level continue to lead and innovate in this time of crisis. New York City recently committed to increasing its pension fund to $4 billion its investments in climate change solutions by 2021. California signed SB100, perhaps the most sweeping clean energy piece of legislation in history, into law, committing to 100 percent  zero-carbon electrictricity by 2045. Virginia’s Gov. Ralph Northam released an ambitious 2018 Energy Plan focusing on renewable energy, energy efficiency, energy storage, and electric vehicles. All of this is good news. And, we need more such actions. Now. As investors, we can and must invest more wisely and sustainably, and use our power as investors to demand climate-related disclosures, improvements in climate-related governance, and the reduction of climate-related risks to our investments. As business leaders, we can and must conduct analyses of our operations to identify and mitigate or eliminate climate risk, reduce our greenhouse gas emissions, and contribute to a concerted effort to limit temperature rise to no more than 1.5 degrees. As consumers, we can support companies with sustainable products, low-carbon footprints, and just and sustainable supply chain operations. In just a few weeks, many of us in the U.S. will exercise our most direct option for influencing our government at all levels by voting in the midterm elections. While many factors may drive our voting choices, we must recognize that we are in a moment of existential threat when it comes to climate change, and vote accordingly. We have less than twelve years left to bring about transformative change. None of this is easy. All of it is necessary. To borrow a phrase of understatement, we live in inconvenient times and are facing an inconvenient crisis -- one of our own making. To those who would compromise the all-hands-on-deck efforts, or merely hope that somehow the course will correct itself, we must ask: how much are you willing to compromise your children? Your grandchildren? What future are you willing to hand to the child born today, or in twelve years time? What will you say to that 7th grader facing life in a world you knew how to protect--and failed to? The science is clear. The task is hard, but we now have the tools to act at the speed and scale we need to avert a collision with disaster. This post originally appeared on Mindy's Sustainable Capitalism Blog on Forbes. 

Hurricane Florence caused record flooding at water and wastewater plants in North Carolina. Saltwater intrusion from rising sea levels is wreaking havoc on Florida’s water supplies. The nearly two decades of drought afflicting the Colorado River Basin will soon require southern California to cut its draw from the river by as much as 8%. Climate resiliency is becoming an increasingly material issue for utilities that manage water infrastructure and investors who buy the bonds to finance these assets. As climate risks rise, utilities and their bond buyers must address growing questions about the long-term resilience of existing and planned water infrastructure, to prevent these investments being left high and dry. Last fall, Moody’s warned New Orleans, Miami and other Gulf Coast cities to prepare for climate impacts or risk a downgrade on their bond ratings. In July, a University of Pennsylvania study warned of broader credit rating downgrades for all coastal communities that do not manage flooding and rising sea level risks. “What are we going to do when sea level rise is constantly battering cities? Declare a chronic emergency? We’re talking about hundreds if not thousands of cities at risk,” said UPENN’s John Miller, who authored the “Credit Downgrade Threat” report. These actions linking credit worthiness to climate resiliency are an important wake up call to water utilities that they must prepare for climate change. And momentum is clearly growing. Among the more recent breakthroughs is new guidance issued this spring by the National Federation of Municipal Analysts (NFMA) regarding utility disclosures. The guidance asks for stronger disclosure on potential climate impacts to physical assets, water supplies and revenue streams. It also asks utilities to share more about their plans to protect critical water sources as well as planned conservation measures to ensure water availability. The NFMA’s Recommended Best Practices in Disclosure for Water and Sewer Transactions guidance follows in the wake of an evaluation tool Ceres has developed to help bond investors assess the resiliency of water utility-related investments. The Water Risk Framework for Municipal Water and Wastewater is part of a new open-source water risk toolkit created in collaboration with a group of over 40 asset managers and owners. Another development that will shape the future of the municipal water bond market is the finalization of new water infrastructure criteria for green bonds. The new standard, which use specific scoring criteria to rank water projects on climate adaptation and environmental impacts, come as the green bond market is taking off globally, hitting a record $162 billion in 2017. Several utilities have already issued $1.5 billion of green water bonds, including San Francisco, Washington DC and Cape Town, South Africa. Still another development is a recent change by the Government Accounting Standards Board (GASB) to its guidance for bond financing for distributed infrastructure investments. The clarification makes clear that green roofs, smart meters, water efficient devices and other water-saving measures are assets that can be capitalized and debt-financed by water utilities. Having this financing flexibility will make it easier for utilities to deploy these types of assets at far greater scale. The bottom-line takeaway should be clear: as climate impacts create bigger challenges for the water sector, it is incumbent on bond investors to understand these risks – and for utilities to disclose and plan for them. This commentary was originally posted on BondBuyer.com. 

Farming and food production use most of the world’s water and produce 13 percent of global greenhouse gas emissions. A number of major growers and processors are taking steps to reduce those impacts, writes Ceres’ Kirsten James.

Hurricane Florence is only the latest environmental, financial and reputational calamity to hit the nation’s vast livestock industry this year. Even before last month’s torrential rains caused widespread losses and flooding in hog waste lagoons across North Carolina, meat producers had come under growing pressure due to extensive pollution from their sprawling factory farms, which confine thousands of hogs and chickens in tightly packed facilities. Noxious odors from football field-sized waste pits have prompted dozens of nuisance lawsuits by local neighbors in Iowa and North Carolina, two of which have resulted in favorable jury verdicts and financial damages. Harmful runoff into local waterways have triggered civil and criminal cases across the Midwest. Investor inquiries to companies about their ability to limit these pollution impacts have also been mounting, as is public pressure on state legislatures to crack down on the industry. Many of these pressures are expected to grow as climate change and more extreme weather events trigger more disasters for the industry, which is especially concentrated in poor, rural areas in the Midwest and Southeast. Floodwaters from Hurricane Florence caused dozens of hog waste lagoons to overflow, leaving trails of floating excrement that compromised local waterways and drinking water supplies. More than 3.4 million chickens, turkeys and hogs were killed, and the hurricane also forced plant closures, including the world’s largest hog plant operated by Smithfield Foods (WHGRF). Sanderson Farms (SAFM), the country’s third largest poultry producer, lost more than 1.7 million chickens to flooding. The losses come fresh on the heels of Hurricane Matthew in 2016, which caused similar damages, much of it from overflowing livestock farms. The United States’ livestock industry produces 335 million tons of untreated animal manure annually. (In comparison, the U.S. human population produces 7 million tons of waste annually, the majority of which is treated by public wastewater utilities). This vast stockpile of poorly stored animal manure is a burgeoning liability to a growing U.S. meat and livestock industry, and especially risky in the context of the ever-wilder weather we see tied to climate change. The irony is that livestock production is also a major and growing contributor to global warming -- producing approximately 15% of annual global greenhouse gas emissions—so these risks are at least partially self-inflicted wounds. A small number of industry players have taken steps address the twin impacts of water and climate pollution, but to date overall industry response has been tepid. When 40 of the world’s largest food producers were ranked by Ceres last year on their management of water risks, meat sector companies had the lowest overall scores, averaging only 15 points on a scale of 1 to 100. Similarly, very few meat companies have set climate targets that address the large-scale impacts of animal and feed-related emissions. As the water pollution-climate change connections accelerate, some in the investment community have begun asking “Big Meat” to identify how these impacts translate into bottom line regulatory, reputational and market risks. In 2016, 45 institutional investors and debt holders sent letters to major livestock companies – including Smithfield Foods, Cargill and JBS/Pilgrim’s Pride (PPC) – requesting that they address significant water-related risks associated with feeding, slaughtering and processing livestock. Investors followed up by filing shareholder resolutions this year with Tyson Foods (TSN) and Pilgrim’s Pride. The Tyson resolution was supported by 63 percent of the company’s independent shareholders. The company subsequently committed to improve water, soil and fertilizer practices on two million acres of its supplier land and to take additional measures to reduce water runoff and soil losses. To date, meat companies have also been slow to set greenhouse gas emissions targets and disclose their climate risks in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures. Nevertheless, major meat buyers are increasingly issuing their own directions for their suppliers. McDonald’s recently committed to lower the greenhouse gas intensity across its entire food supply chain by 31 percent by 2030. Wal-Mart, through its Project Gigaton, is asking its supplier base, including meat suppliers, to eliminate a total of one gigaton of emissions by 2030 – the equivalent to taking more than 211 million passenger vehicles off of U.S. roads and highways for a year. While these actions are encouraging, growing pollution pressures and extreme weather events mean that the meat and livestock industries’ outsized impacts and risks will require bigger responses. Maintaining public trust and their license to operate will require much more, including rethinking the siting practices of new animal feeding operations, the adoption of far safer manure management models, and providing much needed incentives for contract animal and feed suppliers to adopt more sustainable practices.

The author, Jeff McDermott, is the founder and managing partner of Greentech Capital Advisors (Greentech), a leading advisory and asset management firm solely focused on sustainable technology and infrastructure systems. As a career investment banker, I have been inside many corporate boardrooms as boards and executives make highly consequential strategic decisions. Shareholder value is always paramount. Directors and executives, in large part, make decisions through the lens of what they believe they will be rewarded for by their equity owners. The well-informed large fund managers, pensions and sovereign wealth funds (SWFs), which collectively own 43% of the world’s $79.2 trillion of equities, know that destroying the planet by pumping CO2 into the atmosphere is not in their long-term interest, nor in the interest of their underlying investors. Yet, like Dorothy in The Wizard of Oz, these large investors don’t seem to realize that they have the power to solve the problem – and in so doing, to help shape a truly sustainable global economy. At the Turning Point As noted in Ceres’ latest benchmarking report on corporate sustainability progress, Turning Point, we are clearly at a turning point for corporate sustainability disclosure. Investors are increasingly asking for corporate transparency and tools to assess data on environmental issues. Corporations, meanwhile, are starting to be rewarded in the stock market for proactively managing sustainability risks through strong governance and business integration. With ever growing focus on sustainability as material to the bottom line, and significant shareholder activity trending accordingly, executives are realizing that it is increasingly in both their own and their firms’ best interest for them to take meaningful action on climate change and to become more sustainable organizations. ​ Accelerating sustainable action starts with comparable disclosure. Disclosure requires corporations to report on comparable metrics and present data in a comparable manner. To quote Ceres’ President and CEO Mindy Lubber, “It is no longer just about raising the ceiling. It is about lifting the floor.” Now is not the time to be passive. Investors must use their position of power to drive change. The tools for adequate reporting are now widely available, and investors should demand that corporations use these tools, report hard metrics in a comparable way, and commit to the transition towards a more sustainable future.  Greentech is seeing strong interest from asset managers and investors in taking environmental, social and governance (ESG) considerations into account in their investment processes. A survey completed by Morgan Stanley earlier this year that polled 118 pension funds, endowments, and SWFs reported that 84 percent of investors are now “actively considering” ESG integration in their investment process. However, 68 percent of investors identified the availability of “quality ESG data” as the biggest challenge in the investment process.  Similarly, one of Ceres’ key findings after assessing 600 large US corporations was that, while financial risk disclosure continues to improve (51 percent of companies discussed climate change risks in their annual filings in 2017, up from 42 percent in 2014), the vast majority of those doing so only provide boilerplate language and fail to provide investors with “decision-useful information” on mitigating climate risk. Further, while more than half of companies are disclosing climate risks to investors only 36 percent of companies set time-bound, quantitative targets to address climate change by reducing greenhouse gas emissions. “Too Many Standards?” The problem is not that we lack metrics and standards. Rather, the key stumbling blocks to corporate reporting of “decision-useful information” are the proliferation of available metrics and resulting confusion, the absence of regulatory support for a global suite of standards, and the perception among Boards, CEOs and CFOs that there are limited incentives for voluntary reporting. In my conversations with senior public company executives, I hear that “there are too many standards,” or “we’re waiting to see what consensus evolves,” and “most of our shareholders don’t seem to care what we put in our sustainability reports.” With the average public company CEO’s tenure lasting only four years, most CEOs are tempted to continue to equivocate and stall.  This mismatch between incentives is why equity owners must be the ones to demand the change. According to the report The Business End of Climate Change, corporations can make meaningful changes which can lessen CO2 emissions by 10 billion tons – half of what the Paris Agreement calls for in the 2-degree scenario – once executive management teams align their operations and their supply chains to lower carbon and be more sustainable.  Recent initiatives and projects are making progress towards the harmonization of environmental impact and sustainable investing metrics, striving for a main goal of “material disclosure.” For example, the Global Reporting Initiative (GRI), Sustainable Accounting Standards Board (SASB), and CDP (formerly the Carbon Disclosure Project), have joined forces with five other metrics and accounting standards providers under the Corporate Reporting Dialogue (CRD). The project is mapping metrics and principles believed to be broadly consistent with “all forms of standards development and business reporting to stakeholders,” to create consensus around common metrics and build alignment.  In Europe, the European Commission’s Technical Expert Group of Sustainable Finance is working on an EU classification taxonomy to determine whether an economic activity is environmentally sustainable, as well as on benchmarks and guidelines to improve corporate disclosure of climate-related information. In contrast, in the U.S., the Securities Exchange Commission won’t act, at least not as long as the current Administration continues to support dependence on fossil fuels. Hence, private sector leadership – with investors and companies in the forefront – is critical to a sustainable future.  Disclosing What Matters—Three Stages of Disclosure In another recent Ceres report, Disclose What Matters: Bridging the Gap Between Investor Needs and Company Disclosures on Sustainability, analysis of these reporting tools and disclosure practices among the largest 476 of the Forbes Global 2000 shows that companies tend to fall into one of three stages of maturity on disclosure.  ​ In the first stage, companies “adopt commonly accepted disclosure frameworks in response to market demands for comparability.” For example, 70 percent of these major global corporations use the Global Reporting Initiative (GRI) standards in their disclosures. In stage two, the report found, companies demonstrate how they integrate their approached to sustainability and business performance, such as by establishing and demonstrating board oversight of sustainability initiatives. Yet only 15 percent of the companies studied provided strong disclosure of the board role, and just 17 percent disclose which specific stakeholders they engage with on sustainability issues.  In the third stage, companies demonstrate that their sustainability disclosures are as reliable as standard financial disclosures by acquiring external assurance. Disappointingly, however, less than 10 percent of those companies surveyed provide third-party verified disclosures.  Clearly, even among these leading corporations there’s much work to be done on disclosure, and investors are going to be a key component of making that work happen—if, like, Dorothy, they learn how to use their power. Investors in Charge Investors collectively have the power to change corporate behavior. ClimateAction100+ and The Investor Agenda are two leading examples of efforts to build consensus on metrics and standards. To date, 296 investors with $31 trillion in assets under management have signed on to the ClimateAction100+ initiative. As a common voice, investors can play a powerful role in harmonizing the use of standards and metrics. With the recent launch of the Investor Agenda at the Global Climate Action Summit, we see the critical actions that investors across the globe are taking to achieve further progress on corporate disclosure, one of the four pillars of the Investor Agenda. Large-scale capital providers and institutional investors should get behind initiatives like the CRD and collectively tell us what input they need, settle on what is important and what will make a meaningful impact.  When environmental impact decisions are made in the C-Suite, and when executive pay is tied to sustainability performance, will we then be able to move toward meaningful integrated reporting and make improvements in our society’s environmental impact. Only then can we close the virtuous circle and accelerate the amount of capital that is invested in sustainable technologies and infrastructure systems.   We have reached the turning point – now is the time for investors to use their position of power and to push boards and executives to report. The large owners of corporate equities should demand that hard metrics be disclosed for calendar year 2018 financial reporting. If they do, the corporations will follow. Similar to Dorothy’s ruby slippers, investors’ ownership positions give them the power to get corporates to lead the fight against climate change—if only investors realize that the ability to help set the world toward a low carbon future has been theirs all along. ​ Greentech’s mission is to empower companies and investors who are creating a more efficient and sustainable global infrastructure. Greentech has two public equity strategies for institutional investors seeking global exposure to companies with robust ESG standards profiting from sustainability – the GCA Sustainable Growth strategy, which focuses on companies in developed markets; and the GCA Emerging Markets Sustainable Growth strategy, which focuses on emerging and frontier market opportunities. We leverage our sector expertise to provide conflict-free advice and thoughtful, innovative solutions. We are dedicated to changing the way the world does business.

This blog was originally posted on NACD's Board Talk blog. Earlier this year, the CEO of the world’s largest asset manager, BlackRock, sent a letter to CEOs and boards of its portfolio companies that underscored the link between financial performance and atypical risks like climate change. “Your company’s strategy must articulate a path to achieve financial performance,” wrote Larry Fink. “To sustain that performance, however, you must also understand the societal impact of your business as well as the ways that broad, structural trends—from slow wage growth to rising automation to climate change—affect your potential for growth.” Larry Fink’s letter, which is cited often, reflects a burgeoning investor movement calling on companies to better understand environmental and social risks that are disrupting their business. The financial consequences of risks like climate change, water scarcity, and human rights abuses are clearer than ever. Investors are looking for companies in their portfolio to put smart governance systems in place that will proactively identify, assess, and manage these risks. Additionally, in many cases, investors are looking at the quality of those governance systems to predict the resilience of a company’s future performance. For instance, a 2017 survey by CFA Institute revealed that financial analysts believe board accountability is the most important sustainability issue in their investment analysis and decision-making. Data around environmental and social issues provides a good sense of a company’s current and past performance. But details on governance systems give investors and other stakeholders key insights into whether the company is likely to sustain this performance in the future. In other words, companies that are governed well for sustainability, especially at the board level, also demonstrate resilient performance in the face of risks. In particular, the board is responsible for making sure that these atypical sustainability risks are integrated and managed as enterprise risks when they are material to the organization. One of Ceres’ recent reports backs this up. Systems Rule analyzes how the boards of the world’s largest companies oversee sustainability issues, assessing whether businesses with the right board governance systems also performed well on environmental and social issues. The answer was a definite yes. We found that companies with strong board governance systems were more likely to also set environmental and social targets. The best performing companies also tended to have holistic systems for board sustainability oversight, including mandates, incentives, and expertise among their ranks on sustainability issues. Why is there such a strong link? The best performing companies, much like sophisticated investors, recognize that environmental and social issues such as climate change, water scarcity, and human rights pose material risks to corporate performance. Putting robust governance systems in place and setting performance goals are ways to mitigate this risk. Smart companies are ensuring that these governance systems are integrated into the management level as well. For instance, at Lockheed Martin Corp., enterprise risk and sustainability are structured under a single management team. Rather than having siloed discussions about existing and emerging risks, the team considers these risks and brings them to the board’s attention in a coordinated way. There are now moves to make this integrated approach the industry standard. The Committee of Sponsoring Organizations of the Treadway Commission (COSO), which creates globally recognized frameworks for enterprise risk management (ERM), recently released draft guidance for how its ERM framework could be applied to environmental, social, and governance risks. Because the board is responsible for oversight, the COSO draft also calls on boards to be aware of these risks. So how can boards effectively oversee environmental and social risks? Based on the findings of Systems Rule, companies can take a few key steps: 1. Make board governance systems holistic. Companies that perform best on sustainability risks are those that have incorporated mandates, expertise, and incentives for sustainability that reinforce one another. Such holistic board governance systems allow directors to better understand and make smart decisions on these risks. 2. Exercise sustainability oversight with an eye towards performance improvements. The board can play an important role in asking management the right questions and encouraging executives to identify the right material issues for corporate performance, as well as setting goals and strategies to manage these risks. Financial incentives can also be used to spur performance. 3. Orient board governance systems towards performance on material risks. The strongest performing companies don’t just have the right board governance systems in place. They also link them to specific sustainability risks that materially affect corporate performance. 4. Provide more detailed disclosure about board governance systems. More detailed disclosure, including on the material risks prioritized by the board and how it addresses these priorities, can spur further sustainability commitments and improvements. The message is clear: Smart governance systems help corporate resilience in a risky world. This blog was originally posted on NACD's Board Talk blog.

This week representatives from business, governments and non-profits will gather in San Francisco to engage in an action agenda to combat climate change at the Global Climate Action Summit. In this arena, it’s arguably ‘the’ event of the year. The diverse remit of the participants is a nod to the reality that any solution must work in our day-to-day lives, rooted in the dynamics of our market. Much has been done to date; exciting, innovative and promising solutions developed. But we must accelerate the pace and scale of our efforts.   At JLL we work hard to make comfortable, healthy, environmentally sustainable buildings more available to clients in cities and towns across the country. We realize that as the largest commercial real estate services firm in the U.S., we have both the opportunity and the responsibility to help minimize the impacts that buildings can have on the environment. The nation’s stock of residential, commercial and industrial buildings account for more than a third of total U.S. greenhouse gas (GHG) emissions. In California, buildings are the second largest source of emissions.    California currently has an opportunity to support initiatives that help reduce emissions in buildings while also lowering energy bills, thereby creating healthier spaces. The legislation encourages innovation in heating and water heating systems so that those appliances are more efficient. We applaud the legislature for taking on this issue because more innovation is welcome and needed.    Policies that drive the market to innovate new products and processes have been at the heart of the California climate debate for the past decade. Legislators have crafted market-based policies to reduce emissions from electricity generation and industrial activity in its cap-and-trade program; from transportation in its advanced clean cars and low carbon fuel standards; and from housing and office buildings in energy efficiency and weatherization programs. These policies have succeeded in both reducing GHG emissions and driving innovation that, in turn, have created 500,000 jobs, according to a study by the Advanced Energy Economy Institute. Policy solutions like those being adopted in California will help us fulfill our commitment to our clients while combating climate change, and that’s the kind of win-win developers and businesses alike can appreciate. Time isn’t on our side, but innovative, market-based solutions can act as an accelerant for the changes we need.   Thank you, California, for leading the way. Cynthia Curtis is Senior Vice President for Global Sustainability Stakeholder Engagement at JLL, a global commercial real estate services firm and a Ceres BICEP Network member. 

Everywhere you look, you’ll find new examples of climate change’s varied and increasingly intense impact. As the Carolinas brace themselves for Hurricane Florence and California picks up the pieces after a deadly season of wildfires, Europe is still reeling from unprecedented heat waves while South Asia is still drying out from last year’s historic and damaging floods. This “new normal” is wreaking havoc on human lives and altering our capital markets – putting our economic stability, global security, and our very future on this planet at risk. And yet at the same time, investment opportunities abound in pursuing the solutions to this crisis – climate change mitigation and the accelerated transition to a low-carbon economy. Investors who invest in clean energy technology such as renewable energy, energy storage, and electric vehicles are being rewarded for their foresight, while companies that prioritize sustainability are performing better over the long term. These new investments in the low-carbon transition are in turn revitalizing communities and serving as an economic engine in areas that need it most, with solar and wind creating thousands of new jobs from Massachusetts to Kansas, and from Minnesota to Texas. And while climate change is poised to hit the world’s poorest people hardest, the transition to and investment in just and sustainable economies hold the most promise for improving their lives along with the health of our planet. It is clear that climate change and our response to it present both perilous risks and boundless opportunities, and investors have a fiduciary duty to evaluate them both. Investors also have significant incentive to minimize their exposure to climate risk, embrace the opportunities embedded in the low-carbon transition, and push for the changes – both through policy and by engaging with the companies in their portfolios – that reduce emissions and put the world on track to meet its goals under the Paris Agreement. With immense power and influence in our global economy, investors have a tremendous opportunity – and dare I say, a tremendous responsibility – to take action. The good news is that an unprecedented number of investors are picking up the mantle of leadership. This week at the Global Climate Action Summit in San Francisco, we, along with our partners across the globe, are showcasing one of the largest-ever displays of investor action, with nearly 400 investors with $32 trillion in collective assets under management taking action in line with what we call the The Investor Agenda. The comprehensive agenda, launched today, was developed for investors to help them manage climate risks and capture low-carbon opportunities and provide them, for the first time, with a mechanism to report their actions in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy. The global reach and impact of The Investor Agenda is also unprecedented, the result of a partnership between 7 founding partner organizations and 10 supporting partner organizations in North America, Europe, Asia, and Australia. These groups have mobilized investors to make significant strides on tackling climate change. The Investor Agenda has captured the following actions by investors: 120 investor signatories are pursuing new and existing investments in low-carbon and climate resilient portfolios, funds, strategies or assets such as: renewable energy and energy efficiency projects; phasing out investments in coal; and integrating climate change into portfolio analysis and decision-making. 345 institutional investors with $30 trillion in assets are urging governments to implement the Paris Agreement. 296 investors from across 29 countries - with nearly $31 trillion in assets - are calling on the companies in their portfolios to reduce their carbon footprint, support clean energy, and strengthen climate-related financial disclosures as part of Climate Action 100+. 60 investors have already committed to reporting in line with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations. CalPERS, the largest public pension fund in the U.S. with $360 billion in assets under management, has steadily increased its investments in low-carbon assets to $11.6 billion as of August of this year and phased out of thermal coal investments entirely as of last year. La Caisse de dépôt et placement du Québec (CDPQ), Canada’s second largest pension fund, has committed to increasing its low-carbon investments by 50 percent by 2020, representing more than $8 billion in new investment. New York State Comptroller Thomas P. DiNapoli put an an additional $2 billion into the state’s low emissions equities index, raising the fund’s sustainable investments portfolio to $7 billion. And group of investors, pension funds, and city and state authorities recently unveiled the Green Bond Pledge, a declaration that all bonds financing long-term infrastructure and capital projects need to address environmental impacts and climate risk. While these are encouraging signs of progress, we must not celebrate them as crowning achievements. They are but early and incremental successes in what must become a swift and transformational movement. As Christiana Figueres, convener of Mission 2020 and former Executive Secretary of the UN Framework Convention on Climate Change, said at the launch of The Investor Agenda, “this is just the beginning of an extraordinary, economy-wide transformation to low-carbon that we must achieve within a generation.” A significant gap remains between where existing pledges will take global emissions reductions and the overarching goals of the Paris Agreement. The difference between meeting those goals and falling short of them is crucial to the health and prosperity of the world’s people and its economies. A recent study published in the journal Science found that for every degree of global warming, global crop yields for wheat, corn and rice will decrease 10 to 25 percent. That means that a global increase of 2 degrees Celsius would make for wheat yield losses of 46 percent, corn by 31 percent, and rice by 19 percent  – threatening our entire global food system and all who depend on it, particularly the poor. Right here in California, where thousands have gathered for the Summit, an assessment by the state found that rising temperatures could increase heat-related deaths by up to 11,300 annually and cost the state $50 billion a year by 2050. And the window of opportunity to act is closing rapidly. A new study from the Global Commission on the Economy and Climate found that the next two to three years are a “critical window” for the kind of transformational changes that can usher us into a new era of economic growth. We have a gargantuan task ahead of us, with everything from our food systems, to our water supply, to the availability of natural resources at stake. If we fail to act, floods, hurricanes, tsunamis, and droughts will decimate our communities at an ever-intensifying clip, and the most vulnerable among us will disproportionately bear the greatest impacts. Our natural resources will be depleted beyond what’s needed to sustain a prosperous way of life. Our children and grandchildren will inherit a world teetering on the edge of social and economic collapse. We simply will not get to a sustainable and secure future if all of us, and particularly investors, don’t scale up ambitions and think bigger and bolder. We need transformational change, not transitional. Disruptive change, not incremental. Here at the Summit, we are sure to see plenty to make us hopeful – with new commitments and innovative solutions being showcased from every sector of society. These are indeed heartening signs of progress. May they pale in comparison to the courageous collective action from investors, businesses, cities, states, countries, and concerned citizens to come. This post was originally appeared on Mindy Lubber's Forbes Blog. 

With the first public meeting of the 2018 Farm Bill conference committee taking place this morning, the House and Senate begin the process of agreeing on a compromise version of this landmark agricultural legislation. Last updated in 2014 and amended every five years, the farm bill is the primary vehicle for federal food, agriculture, and nutrition policy. The House and Senate have both passed their 2018 versions of the farm bill and are now faced with the task of reconciling two very different takes on the legislation. Conservation policy is one of the major points of conflict between the two bills. Food and agriculture make up about 5.5 percent of U.S. GDP and farming uses about 40 percent of the country’s land. The sector also contributes nine percent of total U.S. greenhouse gas emissions and consumes about 80 percent of US consumptive water supplies. All told, food and agriculture are a major part of the U.S. economy and a major user of our country's resources, making the farm bill a key piece of U.S. environmental policy. Maintaining conservation funding is essential The section of the farm bill that covers conservation includes programs that support farmers in adopting conservation practices and allow major food companies to meet their sustainability goals without imposing undue burdens on the producers (farmers) in their supply chains. U.S. food companies are making ambitious commitments to reduce greenhouse gas emissions and water use. As these companies respond to concerns from investors and consumers about the long-term sustainability of their supply, they rely on supportive federal policy to adopt more sustainable practices. As the House and Senate debate a final, compromise bill, they should consider the long term sustainability of our food supply, the global competitiveness of our major food companies, and the success of farmers adopting new conservation practices. Conservation programs receive about five percent of total farm bill funding and are the primary federal source of support for conservation on private lands. These programs provide valuable resources to farmers and ranchers that both incentivize and provide technical support for incorporating sustainable practices into their operations. In addition, many major food companies rely on these conservation programs to meet their sustainability goals, which help to ensure the long-term success of their businesses. The House version of the bill cuts overall funding for conservation programs by about $800 million over ten years. This reduction is on top of a $4 billion cut made in the 2014 Farm Bill, which brought the total conservation funding for 2014 through 2018 to $29 billion. While the Senate version maintains current funding levels for conservation, the cuts proposed in the House bill would seriously impede the adoption of overall farm-based conservation activities, harming the farmers and companies that depend on them. Threats to working lands conservation programs Perhaps the most significant change made to conservation programs under the House version of the farm bill is to the two largest working lands conservation programs—the Conservation Stewardship Program (CSP) and the Environmental Quality Incentives Program (EQIP). Both of these programs provide technical and financial support for farmers looking to adopt conservation and sustainability practices. Under the House legislation, CSP would be folded into EQIP and the two programs would be cut by a combined total of $5 billion over the next ten years. Because the combination of the two programs would actually include the elimination of several important aspects of CSP, the move would significantly reduce the ability of farmers to take advantage of the resources these programs provide. Under the House version of the farm bill, farms would not receive payments for advanced conservation enhancements such as managed intensive rotational grazing or maintaining riparian buffers. These techniques improve soil health, reduce agricultural runoff and incentivize farmers to adopt other practices that food companies want to see. Under the Senate version, the two programs are kept separate, which is in line with current law. This approach recognizes that each program serves a separate and critical role in conservation—CSP supports existing conservation measures while EQIP supports new work on critical resources. In addition, both programs are in high demand and are already unable to serve all interested farmers. The final Farm Bill should keep these programs separate and fully funded. Incentivizing sustainable practices with crop insurance Crop insurance also impacts conservation practices. The federal crop insurance program helps producers ensure a return on the crops they plant so long as they adhere to given guidelines. These set guidelines must be followed for farmers to receive compensation in the event of a loss. However, some important conservation practices like certain methods of cover cropping are not classified as good farming practices. The Senate version of the farm bill would broaden the guidelines to include cover cropping and therefore alleviate the current confusion and lack of flexibility around qualifying for crop insurance payments as a producer utilizing cover crops. Encouraging renewable energy on farms and in rural communities Beyond the direct emissions from agricultural activities like methane emissions from livestock and waste, farms also emit significant greenhouse gases through their operational energy use. Agricultural operations account for about 1.7 percent of total national energy use. The Farm Bill can and should be used to encourage farmers and communities to use a greater proportion of renewable energy. One such program is the Renewable Energy for America Program (REAP), which provides grants and loans to farmers for undergoing energy audits, making energy efficiency improvements and purchasing or developing renewable energy systems. Funding for REAP comes from both the farm bill and the agricultural appropriations process each year. The Senate version of this year’s farm bill would more than double funding for REAP, while the House version would completely eliminate funding. Another such program is the Rural Energy Self-Sufficiency Initiative (RESSI), which is eliminated in the House version of the farm bill and preserved in the Senate version. RESSI assists rural communities in the development and installation of integrated renewable energy systems. Assisting farms and rural communities with the procurement of renewable energy will help farmers keep operation costs down and remain competitive, while also reducing greenhouse gas emissions and meeting long-term climate goals. As the House and Senate work through the conference process to settle on a unified 2018 Farm Bill, every effort should be made to ensure that conservation programs are designed to support both the the bottom line of U.S. farmers and sustainability initiatives of major food companies. The programs highlighted above do just that and they should receive proper attention in the final compromise version of the 2018 Farm Bill. Stay tuned for Part 2 of this blog series posting soon...