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New Hampshire faces both challenges and opportunities in the transition to a reliable and affordable clean energy future. From infrastructure investments to workforce development, rising energy costs, and more, there is much to consider as the Granite State looks to increase our competitiveness and expand our energy options. As a global outdoor lifestyle brand based in Stratham, Timberland is committed to operating our business in a responsible manner — while also doing the right thing for the community that we call home. Clean energy plays an important role in that commitment, as we strive to create a more sustainable future for our planet as well as our bottom line. Currently, over a third of Timberland’s total energy use is powered by renewable resources — and we plan to increase that number to 50 percent renewable energy by 2020. We have also made significant energy efficiency investments at our owned and operated facilities around the globe — helping us cut energy costs by more than 30 percent in some instances. These investments help us keep our energy costs down and make economic sense for our business. It is also what our customers, investors and employees have come to expect from Timberland. Clean energy benefits New Hampshire businesses. New Hampshire has some of the highest electricity rates in the nation. Statewide investments in energy efficiency and distributed renewable energy can decrease demands on the energy grid — helping to reduce rates for all ratepayers. That’s why we worked with Ceres and NH Businesses for Social Responsibility to join over 60 New Hampshire businesses, including Dartmouth-Hitchcock, Hannaford Supermarkets and Worthen Industries, in signing a series of “Clean Energy Principles” that call on lawmakers to support clean energy policies that drive economic growth and business development. As lawmakers, businesses and individuals craft our state’s energy future, there’s an opportunity to further accelerate clean energy investment in a way that benefits all ratepayers. We want to ensure that New Hampshire can compete with its regional neighbors and attract new jobs, tax revenues and community benefits. Clean energy and supportive policies that keep our electricity rates low are an important part of making that happen. During NH Energy Week, the business community will join policy experts and local nonprofit leaders to discuss our state’s complex energy issues and solutions that will work best for New Hampshire. The path forward must include policies that support the growing demand for clean energy. From generating onsite renewable energy to locking in fixed prices through power purchase agreements, companies are increasingly looking to make their own energy choices to better control their energy costs and reduce climate impacts. Policies that increase access to renewable energy, support innovation and encourage efficiency will help more businesses make these investments and capture long-term savings — ensuring that New Hampshire remains a good place to do businesses. New Hampshire already has a number of policies that promote clean energy investments such, as the Regional Greenhouse Gas Initiative, the renewable portfolio standard and net metering. These policies are building a prosperous economic future and allow businesses like ours to thrive. Timberland is committed to investing in clean energy solutions ourselves and working toward a clean energy future for New Hampshire. We look forward to the important conversations that will happen during NH Energy Week. We know that the best solutions take into account a diversity of perspectives and are eager to share ours and learn from others. We call on all New Hampshire businesses to join us and encourage lawmakers to do their part to embrace new solutions and policies that support New Hampshire’s burgeoning clean energy economy. Colleen Vien is sustainability director at Timberland. To register to attend NH Energy Week events, visit http://www.nhenergyfuture.org. Read the original blog on NH Business Review

The vast warehouse that holds States Logistics Services' headquarters and packaged food operation in Buena Park, California, stretches a nondescript length of six football fields in a lot that replicates industrial parks nationwide. But a closer look, and a little conversation, reveal several things that make this mainstream logistics company a player in the transition to a low-carbon economy. More than 1,000 solar panels top the giant building, providing it with 100 percent renewably powered electricity, helped occasionally by renewable energy credit purchases. Trucks moving in and out of the warehouse run on biodiesel fuel when weather conditions allow, reducing carbon emissions from its transit-heavy operation. And the packing, sorting and repacking done inside the logistics facilities involve a sophisticated recycling program that leaves only 15 percent of material not reused or recycled.  States Logistics describes itself as a third-party provider of warehousing, packaging, transportation and distribution of goods. It’s a behind the scenes business-to-business company, not a household name. One of States Logistics’ main customers is Clif Bar & Company, whose product fills this warehouse in row after row of boxes stacked high. Clif Bar, in a testament to the influence companies can have on their supply chains, has been evangelizing sustainability during its long working relationship with States Logistics, convincing it of the benefits of Clif’s 100-percent-renewable energy electricity sourcing and waste-free operations. Before long, States Logistics decided to follow with similar steps. Visiting States Logistics Buena Park facilities at the invitation of Clif Bar, I was gratified to see and hear about this transition. "Clif Bar got us excited and kicked us a few times," States Logistics President Ryan Donovan told me as we walked through the facilities. Over the course of a decade-long business relationship, States Logistics joined into Clif Bar’s "100-percent green power program" to gradually transition its electricity supply to renewable power. Like Clif Bar, it began using biodiesel-fueled transportation fleets and embraced a no-waste philosophy. Also, it launched an energy efficiency program, cutting lighting electricity use by 65 percent in most locations. As I toured the giant facility and heard how large the company is — States Logistics operates 11 logistics facilities employing upwards of 600 people and serving 250 vendors — it struck me what unalike sustainability partners these two companies are. Consumer-facing Clif Bar built its brand around wholesomeness and sustainability, using a motto of "think like a tree" to tell customers it strives to do no harm to the Earth, and consumers expect that of them. Logistics companies don’t have to win the hearts of consumers. Instead, they win business on efficiency. As States Logistics has gone wholeheartedly into sustainability, that begs the question, are renewable energy and zero waste more efficient? States Logistics' CEO says so. "Sustainability is a priority at States Logistics, and clean energy is a cornerstone of our efforts. In fact, we run our Buena Park facility on 100-percent green power. We understand that clean energy is not just good for the environment, but it’s also good for our bottom line," Daniel Monson wrote in a recent letter urging California legislators to support Senate Bill 100, which would establish a goal for the state to get all of its electricity from zero-carbon sources by 2045. But States Logistics also noticed an unexpected side benefit of its efforts to reduce emissions, cut waste and use renewable power: These operating changes attracted new customers that also wanted to green their supply chains. "Part of the reason they chose us is because of what we are doing on the sustainability side; it gives us a competitive advantage," Donovan told me. In the past decade, scores of companies have been pushing their supply chains to adopt sustainable practices — often in answer to consumers. Ranging from retailers such as Walmart to packaged food companies such as PepsiCo and Kellogg to iPhone maker Apple and other tech giants, these companies often view greening a supply chain as a way to win customers themselves. Increasingly, their investors are looking at sustainability creds as well. But business-to-business companies, especially old-school logistics suppliers, are not often in the ranks of the sustainability avant-garde.  Now, companies are becoming more active as advocates for climate-smart policies. Clif Bar has been a vocal proponent of SB 100 and twice has sent letters to the California legislature and governor expressing support of SB 100. It has visited lawmakers in Sacramento to share why businesses are behind 100-percent clean energy. Since 2014, Clif Bar has been trying to encourage the use of renewable energy and no-waste operations down its supply chain, recognizing that its footprint on the Earth is much wider than what it does in its own facilities. It moved from being carbon neutral in its own operations in 2003 to becoming a recognized evangelist of climate-saving practices and climate advocacy. Last year, the U.S. Environmental Protection Agency named it a "2017 Climate Leader" for its efforts to promote clean power across its supply chain. Now among its many suppliers, from oats and raisin growers to logistics and packaging firms, it has quite a few converts not only to clean power but to climate action. "Usually you don’t think about a logistics partner as a leader in green business," said Elysa Hammond, vice president of environmental stewardship at Clif Bar. But, she added, that is the case for States Logistics. image source: Clif Bar Read the original post on GreenBiz

Written by Eliza Roberts, Lindsay Bass ​ Cape Town, South Africa | Image Credit: © James Suter/Black Bean Productions/WWF-US   Cape Town, South Africa could run out of water in a few months, literally turning off the spigot for some four million residents. If a solution to the crisis is not found, social unrest is feared. Beyond the human rights concerns, the region’s vegetable, citrus, grape and nut growers may face shortages as 40 percent of Western Cape Town’s water is currently allocated to agriculture. This frightening scenario may play out with increasing frequency around the world, as population growth, water pollution and climate change place further stress on dwindling water resources. Forty percent of water demand is unlikely to be met by 2030, according to a recent U.N. report, and the value at risk to business is estimated at $63 trillion. Food companies, whose supply chains rely on 70 percent of the world’s water, ought to be paying attention. And some are, as evidenced by the significant growth in agricultural sustainability standards that in recent years have come to represent a key mechanism through which large multinational firms address their sustainability goals, including for water.  To spur further growth in this promising area, Ceres and the World Wildlife Fund (WWF) created the AgWater Challenge, a joint initiative to help companies advance their sustainable sourcing strategies. Through the AgWater Challenge, Ceres and WWF work together with food and beverage companies to develop stronger, more transparent water stewardship commitments in agricultural supply chains. Launched in 2016, with an inaugural group of seven companies — Diageo, General Mills, Hain Celestial Group, Hormel Foods, Kellogg Company, PepsiCo, and DanoneWave (formerly WhiteWave Foods) — the AgWater Challenge is now open to new food and beverage companies seeking to embrace water stewardship beyond their four walls. ​ Cape Town, South Africa | Image Credit: © James Suter/Black Bean Productions/WWF-US   Companies that join the challenge receive technical support from Ceres and WWF (and other NGO partners) in analyzing water issues within their supply chains, and in refining or making new sourcing commitments that enable them to better address their risk. Participating companies benefit from the opportunities for peer-to-peer learning on best practices for managing water risks, setting time-bound goals and engaging with growers.  Among the commitments recognized by the AgWater Challenge in 2016: General Mills completed a comprehensive risk assessment through which it identified eight high-risk watershed regions globally, including California. It pledged to develop water stewardship plans for these regions by 2025 by working with NGOs, farmers and other stakeholders. Hormel Foods’ plans include the development of a comprehensive water stewardship policy with management expectations that surpass regulatory compliance for its major suppliers, contract animal growers and growers that supply animal feed. Kellogg committed to responsibly source its global 10 priority ingredients by 2020 through continuous improvement for row crops via water and fertilizer use metrics. The company’s water sustainability efforts are supporting 17,000 agricultural suppliers, millers and farmers across 22 countries helping them optimize water use and enhance watershed quality. PepsiCo committed to working with its agricultural suppliers to improve water efficiency within its supply chain by 15 percent by 2025 (using a 2015 baseline) in high water risk sourcing areas, with a specific focus on India and Mexico. PepsiCo’s AgWater Challenge goals cover all of its major crops directly sourced, such as potatoes, corn, oats and citrus, as well as other key commodities directly contracted and indirectly procured. These companies’ commitments reflect their understanding that, as major global food brands, they can be a powerful and constructive force for scaling water stewardship, especially at the farm level — where the biggest footprint is by far. ​ Cape Town, South Africa | Image Credit: © James Suter/Black Bean Productions/WWF-US   And they’re not alone in seeing the rising risks to our water supply. Sixty-eight percent of companies believe that exposure to water risk could generate a substantive change in their business, operations or revenue, according to a 2014 Carbon Disclosure Project (CDP) report. For food companies, sustainable sourcing is a smart strategy for mitigating water risk, and the AgWater Challenge is a resource for companies wherever they may be on their journey for water stewardship. As Jerry Lynch, Chief Sustainability Officer at General Mills, put it, “The challenges facing our company and our planet are more pressing than ever, so we have to build resiliency in our supply chains to ensure that we can continue to serve the world by making food people love. Our ambition through the AgWater Challenge and all of our water initiatives is to lead by example and we hope to encourage others to do the same.” To join, please contact Lindsay Bass, WWF Manager for US Corporate Water Stewardship or Eliza Roberts, Ceres Senior Manager for Agriculture Water Stewardship. Read the original blog on Sustainable Brands

The rapidly changing climate, a global water crisis, and profound and ongoing human rights abuses undermine not only business operations, but also the lives and livelihoods of employees, customers and stakeholders.   Investors—both large and small—are ramping up sustainable investment strategies focused on environmental, social and governance issues. In the United States alone, sustainable investing grew by 33 percent since 2014 to reach $8 trillion in 2016, and will represent an estimated 4.5 percent of GDP by 2050. More and more mainstream investors are calling on companies to recognize, assess and mitigate the sustainability risks they face. The 2018 proxy season is already witnessing a flood of shareholder proposals demanding companies disclose climate change and water risks and gender pay gaps. At the 2018 World Economic Forum in Davos, where water scarcity and climate change were once again cited among the top global economic risks, BlackRock CEO Larry Fink released a letter to the CEOs of the major publicly traded companies he invests in to make a positive contribution to society. “Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate,” he wrote. Without a sense of purpose, he warns, “companies will provide subpar returns to their investors who depend on it.” ​ In our new report, TURNING POINT: Corporate Progress on The Ceres Roadmap for Sustainability, we take a closer look at how more than 600 of the largest U.S. companies are responding to these calls and positioning themselves for success in a world increasingly shaped by unprecedented environmental and social challenges. The analysis specifically takes a closer look at the progress of more than 600 companies to meet 20 key expectations of sustainability leadership within the areas of governance, disclosure, stakeholder engagement, environmental and social performance, as outlined in the Ceres Roadmap for Sustainability. Our findings show more companies now understand the business imperative of addressing sustainability risks and are stepping forward in greater numbers than ever before. For example, nearly two thirds of the more than 600 companies have committed to reduce greenhouse gas emissions, and more than half of the companies assessed now have formal policies to manage water resources, and nearly half have policies to protect the rights of their workers. ​ However, as our analysis shows, many companies are neither acting as quickly nor as boldly as they should to deliver on the global Paris Agreement and Sustainable Development Goals, and to truly transform into sustainable enterprises. Notably, we found that while 69 percent of companies call on their suppliers to effectively manage their environmental and social impacts, only 34 percent actually provide tools and resources to incentivize action. Furthermore, compared with the 64 percent of the companies with commitments to reduce greenhouse gas emissions, only 36 percent set time-bound, quantitative targets -- and only a quarter of those targets work toward reducing emissions by at least 25 percent by 2020. And while a third of companies assessed commit to increase renewable energy sourcing, only a small fraction set targets to source at least 30 percent of the energy they use from renewable sources by 2020. Without many more companies setting ambitious, measurable and science-based targets, there is little chance we will meet the Paris Agreement goal of keeping global warming temperature rise to well below two-degrees Celsius. As we begin to witness major global cities actually running out of water, the frightening reality for cities, local communities and water-dependent sectors is brought into sharp relief. Half of companies assessed commit to better management of their water resources, but just 15 percent set goals prioritizing action in the highest risk areas of their value chain. We have reached a turning point. It is no longer just about raising the ceiling; it is about lifting the floor. The time has come for bold and scalable solutions, not just from a few leading companies, but from companies of all sizes and across all sectors who need to transition from making commitments to taking concrete actions. And, we know that increased accountability for sustainability performance drives commitment and action. As our analysis shows, 65 percent of companies, up 42 percent from 2014, hold senior-level executives accountable for sustainability performance. Among the companies with goals to reduce greenhouse gas emissions, for example, 98 percent hold a senior executive accountable for sustainability performance. ​ TURNING POINT provides investors and companies the valuable insight they need to turn their commitments into actions, to improve resilience across operations and supply chains, and transform themselves into sustainable enterprises. It is an easy-to-use tool for investors and companies to identify key sustainability trends and leading industry practices across nearly every sector of the economy.   The more than 600 companies assessed in TURNING POINTaccount for over 80 percent of the United States’ total market capitalization and their decisions will chart the course for the global economy. We must work together to build a more equitable and prosperous world. This will require all investors and companies to take the higher road toward a sustainable future. Read the original blog on Forbes

As Cape Town struggles to keep the taps flowing amid the worst drought in a century, agriculture is taking a hit. Water restrictions have especially impacted the fruit and vegetable industries, with 80 percent fewer potatoes being planted this season, for example. The unfolding water crisis in South Africa may play out with increasing frequency around the world, as population growth, water pollution and climate change stress dwindling water resources. Procuring ingredients from water-stressed regions is becoming riskier. That’s why a growing number of companies are seeking to minimize their risks by setting goals to source key commodities sustainably—or, in ways that reduce the environmental and social impacts of growing those crops. In fact, more than half of the 42 companies ranked in Ceres’ analysis of how the food sector is responding to water risk have set sustainable sourcing goals for some of their major commodities. The problem is, too often, these sustainable sourcing commitments aren’t backed by robust directives or incentives for internal procurement teams. And without the support of procurement –the corporate function that optimizes supply security and quality, while minimizing costs and price volatility–companies are unlikely to solve the massive agricultural sustainability risks they’ve identified. Some 70 percent of the companies we ranked haven’t taken steps to integrate sustainability commitments into their procurement processes. This means that their procurement teams and suppliers aren’t up to date on the company’s sustainability commitments. Buyers aren’t equipped with the understanding they need to decide which suppliers they should source from and what kinds of obligations they should include in contracts. And companies aren’t tracking whether suppliers are following through on commitments the company has set. While a growing number of companies recognize this disconnect between sustainable sourcing goals and procurement as a key obstacle to achieving their sustainability commitments, few are digging in to address it. Campbell Soup, Mars, ABInBev and Group Danone are among those who are. One of Campbell’s key steps is placing people with sustainability expertise into the procurement department. Two formal positions now integrate sustainability and procurement, including the Director of Responsible Sourcing, who has CSR and sustainability expertise, sits on the leadership team and reports to the Chief Procurement Officer. According to Dave Stangis, Vice President for Corporate Responsibility and Chief Sustainability Officer for Campbell Soup, embedding these roles within the procurement team makes training buyers on sustainability commitments, and the supplier expectations that flow from them, more organic. “The company benefits when the department that delivers on those commitments is also the one that makes them,” says Stangis. At the same time, Campbell has also built a roadmap for responsibly sourcing its priority ingredients, and trains buyers on using this roadmap with updated supplier expectations. As a result, the supplier expectations are now incorporated into the suppliers’ contracts, and the procurement team is advancing more strategic conversations with suppliers about what sustainability and transparency look like. The company still has work to do. Says Stangis: “We’ll consider ourselves successful when we can speak with our suppliers about sustainability as something that is better all-around from a cost savings, relationship building, quality and economic point of view.” Like Campbell, Mars has embedded sustainability roles into the procurement department at the highest level. Its long-time Chief Sustainability Officer, Barry Parkin, has assumed the lead role in procurement, according to Mars spokesperson, Lisa Manley. The company has also set impressive science-based goals for reducing its impact on land, water and farmer communities, and is working to integrate these into the procurement process, with an emphasis on its top 10 ingredients. Mars trains its buyers on sustainability commitments, embedding details about sustainable sourcing into supplier contracts, and it works closely with its suppliers, sharing its commitments and developing farmer partnerships. It offers agronomist support and farmer training, and pays a small premium to rice farmers who adhere to its sustainable sourcing guidelines. The brewing giant ABInBev factors sustainability into procurement directives, providing guidance to suppliers on agricultural ingredients through its sustainable agriculture guiding principles. These principles are being integrated into AB InBev’s internal governance routines and procurement processes. Group Danone follows a similar approach. Clearly, there is no one-size fits all approach to integrating sustainability into procurement practices. Each company needs to find a system that works best for it. Regardless of the approach, the first order of priority is to set time-bound measurable goals for sustainable sourcing, and to simultaneously get senior executive buy-in and understanding of the business case for sustainable sourcing. Other important steps include: ensuring that your supplier codes and polices are both strong and linked to sustainable sourcing goals; and implementing structures for training and incentivizing both buyers and suppliers. Making sustainability a standard part of how food companies purchase the ingredients they rely on is an evolving practice. But as our agricultural systems face the new reality of water scarcity and climate change, food companies must hasten to forge the missing link. Image source: Picture taken January 20, 2018. REUTERS/Mike Hutchings Read the original blog on TriplePundit

As I reflect on last week's 2018 Investor Summit on Climate Risk, I can’t help but think back to our first Summit 15 years ago. My kids were still in grade school, I had just stepped into my role as CEO and President at Ceres, and the concept of climate risk was far from almost every investor’s mind. Fast forward to today: My children have graduated from college and embarked on careers of their own, the Ceres Investor Network on Climate Risk and Sustainability has grown to include 146 investor members with $23 trillion in assets under management and investors from all around the world have made tremendous progress on climate action. But we need them to do more. Our planet is warming faster than ever, climate-related storms are wreaking havoc on our communities and global economy, and political shifts -- particularly here in the United States -- threaten to pull us backward at the very moment we need to leap forward. We need 2018 to be the year of investor leadership on climate. The Investor Agenda That’s why Ceres and six other organizations from around the world debuted The Investor Agenda at this year’s Summit. This comprehensive agenda provides a menu of options for investors to take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy. Actions in each of these areas not only help investors mitigate risk and capture opportunity, they ensure a safe and sustainable future for generations to come. Investment With the market signal sent by the Paris Agreement as their guide, we need investors to increase investments in low-carbon technologies while reducing investments in high-risk, high-carbon fossil fuels such as coal and oil sands. Sharan Burrow, Thomas DiNapoli, Jack Ehnes, and Andrew Plepler discuss Investment and Job Creation Opportunities in the Global Shift to Clean Energy Fortunately, we’re already seeing plenty of progress here. Global Investment in clean energy totaled $333.5 billion in 2017, with significant commitments from leading investors all over the world. Major banks like Bank of America, JP Morgan, Citi and Goldman Sachs have committed more than $100 billion each to the low-carbon economy. CDPQ, Canada’s second largest investor committed to increasing its low-carbon investments by more than $8 billion. And on the morning of the 2018 Investor Summit, New York State Comptroller Thomas DiNapoli announced a new commitment of $2 billion in low-carbon investments to the New York State Retirement Fund, the third largest public pension fund in the U.S. Emma Herd, Peter Damgaard Jensen, Hiro Mizuno, Michael Sabia, Yngve Slyngstad, Scott Stringer, Betty Yee discuss next steps for asset owners on climate change And investors aren’t only investing, they’re divesting as well. New York City Comptroller Scott Stringer set a goal to divest the city’s pension funds from fossil fuels, while California pension funds CalSTRS and CalPERS have already divested from thermal coal. At the Summit, Yngve Slyngstad, CEO of Norges Bank in Norway, explained the bank’s process of divesting from companies in their portfolio that aren’t adjusting to a 2-degree world.  While these are all excellent indicators of progress, investors need to do more. We need what we call the Clean Trillion, an additional $1 trillion in investment per year in low-carbon energy, all while ratcheting down investment in high-carbon fossil fuels. Engagement Beyond directing the flow of capital, we need investors to put their unique influence to use by engaging with the companies in their portfolios. Investors have made great strides here as well. In 2017, investors filed 175 climate-related shareholder resolutions, reaching an astounding 62% majority vote on a climate risk disclosure vote at ExxonMobil, as well as achieving majority votes at Occidental Petroleum and PPL. With investors like BlackRock, Fidelity, State Street and Vanguard voting in support of climate risk disclosure, it’s clear that the concept has gone mainstream. Climate Action 100+ But there’s so much more investors can do to engage companies. Each and every investor should join the Climate Action 100+, the most ambitious investor initiative ever to engage the world’s largest corporate emitters to reduce emissions, strengthen climate-related financial disclosures and improve governance on climate change. With more than 250 investor signatories and nearly $28 trillion in assets under management already, the pace and scale of Climate Action 100+ sets a gold standard for future engagement initiatives, and is a crucial piece of investor leadership in 2018 and beyond. Disclosure And as investors engage companies around climate risk disclosure, we need them to embrace that disclosure themselves. The recommendations set forth by the Task Force for Climate Related Financial Disclosures (TCFD) are the perfect place to start, and The Investor Agenda urges investors and companies to swiftly adopt the TCFD. Mindy Lubber, CEO and President of Ceres, Amina J. Mohammed, Deputy Secretary-General, UN, and Kathy Calvin, President and Chief Executive Officer at the United Nations Foundation. 2018 Investor Summit on Climate Risk Policy Finally, investors must speak up on policy. Policy creates the market conditions that make climate action not only possible, but profitable -- and investor voices can change the debate. Hundreds of investors put their voice to use in Paris to pass the historic 2015 Paris Agreement. They did it again in Marrakech and then again in Bonn to make sure the world kept on track with its commitments. These investors will be integral to securing continually increasing commitments from countries to reduce emissions, price carbon, and incorporate climate risk into our capital markets systems.  In the U.S. in particular, we heard investor voices loud and clear when they joined with businesses, mayors, governors, and universities to say “We Are Still In” on the Paris Agreement and our commitment to climate action. We need a crescendo of those voices around federal and state policy in 2018. In this brief moment of respite after an inspiring week, I’m heartened by the progress we’ve made as a global community and I’m more motivated than ever to double down. We can’t predict the future, but we know for certain that what we do from here on out will impact the world economy and our very way of life for generations to come. And we don’t have 15 more years to get there. As our keynote speaker Jeremy Grantham of GMO emphasized in his closing remarks, we need to move by “leaps and bounds this year to save our portfolios, our planet, our species from unconscionable catastrophe.” Brian Deese, Global Head of Sustainable Investing, BlackRock And as Brian Deese of BlackRock, the world’s largest investment management company, reminded us, “If you’re not a climate-aware investor, you’re fundamentally not doing your job.” I’m hopeful that investors will heed the call and do their job. They have the power, the financial incentive, the fiduciary duty and dare I say the responsibility to act on climate and to make 2018 our most productive year yet on climate action. I know we can make significant progress this year to build a sustainable world for people and the planet. Read the original blog on Forbes.com

Stock delistings. Cancelled contracts. Criminal charges. Recent scandals involving giant corporations are revealing that tropical deforestation in their supply chains carries not only extraordinary ecological risk but also large financial risk that can blow through a company’s assets, profitability and cash flow. Our new report sums up these risks and highlights some of the most egregious examples. Exhibit A: Brazil’s JBS, the world's largest meat company and beef exporter. JBS is embroiled in one of the biggest corporate corruption scandals in global history, with investigations unearthing bribery, financial and accounting violations and illegal deforestation. At the center of the story is Brazil’s meat market. For just over a decade, JBS has been on an aggressive acquisition tear, loading up on debt with the backing of Brazil’s development bank, which was eager to prevent outsiders from buying Brazilian assets. This rapid expansion, though, came without instituting standard corporate governance procedures. The result? JBS crossed so many lines it began attracting government scrutiny in a market where deforestation is having a devastating impact. Cattle ranching is responsible for around three-quarters of forest clearing in the Brazilian Amazon and deforestation creates half of the country’s greenhouse gas emissions. JBS’ apparent drive for growth at all costs caused a cascade of financial woes, including plummeting corporate revenues, billions in regulatory fines and the delay of the IPO tied to the company’s foreign operations, which represent 85 percent of sales. An example on the other side of the globe puts the spotlight on the high stakes of not living up to international standards for sustainability certification. In Indonesia, IOI Corporation Berhad was suspended from the Roundtable on Sustainable Palm Oil (RSPO) for six months in 2016 for sourcing palm oil from cleared forest and peatland in Indonesia and for failing to mitigate fire risk. During the past 15 years, demand for palm oil tripled, as the high-quality oil found its way in everything from processed food to beauty products. This spike in demand led to massive deforestation and the destruction of peatlands in Malaysia and Indonesia, pushing animals including orangutans and tigers toward extinction and accounting for nearly 5 percent of global greenhouse gas emissions—about as much as the entire country of Japan. In response, NGOs and some governments, spurred on by consumers, pushed for companies to adopt sustainable production through groups like the RSPO. Which is why the fallout for IOI was swift. Some 27 of the company’s largest corporate buyers, including Unilever, Kellogg and Mars, suspended their contracts with IOI. The company posted a net loss and IOI’s market cap tumbled 17 percent and only began recovering once IOI made reforms so it could be readmitted to the RSPO. Rounding out the cautionary tales is United Cacao, the largest pure-play cocoa estate in Latin America. At least, until the company’s deforestation-fueled growth strategy led to the company’s delisting from the London Stock Exchange's Alternative Investment Market and winding down of operations in 2017. United Cocoa’s growth plans, tailored to attract financing, were built on the rapid expansion of its cocoa plantations. While smallholders account for almost 90 percent of cocoa production, United Cacao’s business model was different. It operated the largest cocoa plantation in Latin America, which it planned to expand aggressively. When evidence began emerging that United Cacao was clearing land in violation of Peru’s environmental regulations on deforestation, the company was ordered to cease operations. United Cacao’s deforestation activities, it turned out, was a leading indicator of other corporate governance issues. The point is, consumers aren’t the only ones who care about hot button tropical deforestation issues caused by cattle ranching, soy farms, or palm oil plantations. Wall Street is also taking note, and a new global Investor Initiative for Sustainable Forests is moving this issue up the agenda of large food companies. As consumer and investor awareness rises, businesses that rely on commodities produced in areas at risk for deforestation will find themselves increasingly in the spotlight. Turning a blind eye toward suppliers’ illegal destruction of tropical forests is simply not a viable business strategy.  Food companies must take action to prevent deforestation in their supply chains—or face the financial consequences.

Amid the big headlines about tax overhaul and wildfires in a season already full of holiday distractions, you would be forgiven for not noticing that California advanced an important climate initiative: the 2017 Climate Change Scoping Plan. “Scoping Plan” you wonder? Few people have ever heard of the Scoping Plan, although this is California’s third. The state Air Resources Board (ARB) adopted the extensive 2017 version to outline California’s climate policy path to 2030 and detail how it will fulfill its landmark legislative mandate to reduce greenhouse gas (GHG) emissions. Developing a strong roadmap is important not only here but across the country and beyond because of California’s global leadership role as a climate policy incubator and best practice exporter. For those reasons, adoption of a strong 2017 Scoping Plan was a priority for our Ceres BICEP Network (Business for Innovative Energy and Policy), and I joined colleagues from numerous environmental, public health, business, and environmental justice groups last Thursday to testify before ARB members as they prepared to vote on the Scoping Plan. And, over the past year, I participated in a thorough stakeholder engagement process about what the plan should contain. So what is it and what does it contain? Put simply, this document “scopes” out California’s “plan” to meet our climate targets. As the state’s GHG reduction goals have become increasingly ambitious, the path forward to success more convoluted, and the role of California as a global climate change mitigation leader more significant, getting the Scoping Plan right is critical. The 2017 Scoping Plan adopted by ARB intricately lays out a coherent policy path for state regulators to follow. And while not perfect, we believe the 2017 Scoping Plan cements a strong and achievable path to effectively reducing emissions. Its adoption is truly a landmark achievement. The document builds on existing policy, ties together a number of sector specific strategies, and solidifies targets with in sectors. It outlines a path towards a California with more electric vehicles, cleaner electricity to fuel those cars, denser more walkable communities with more efficient buildings, and less polluting agriculture. Of significant importance to BICEP, the Scoping Plan reinforced legislative direction by confirming the roll of the Cap-and-Trade program to cost effectively achieve over one-third of the state’s requisite reductions by 2030. Cementing the role of the Cap-and-Trade program will help keep compliance costs down and maintain important linkages; two Canadian provinces have joined California’s Cap-and-Trade market and Oregon is considering policy that may lead to a similar partnership. On the other hand, we believe that the Scoping Plan missed an opportunity to make stronger transportation commitments. With close to 40 percent of California’s emissions coming from our cars and trucks, the Scoping Plan should have placed a stronger stake in the ground to ensure we adequately increase the number of electric vehicles on the road and decrease the amount of GHGs emitted by combustion engine cars and the fuels that power them. Many of stakeholders expressed similar sentiments – this is a solid framework but it could benefit from a little tightening here and there. But overall, this Scoping Plan is a solid win for California and the world. The history of the Scoping Plan Since the 2006 passage of the California Global Warming Solutions Act (AB 32), the state has produced two previous Scoping Plans to guide its journey in tackling GHG emissions with an aggressiveness necessary to prevent catastrophic climate change. To undertake this monumental task, the state has developed and implemented a large suite of “complementary” policies that drive innovation and GHG reductions in specific sectors of California’s economy. Think of the state’s Renewables Portfolio Standard that mandates increasing percentages of our electricity be supplied by renewable energy. These complementary policies address GHG emissions in areas across our economy – transportation fuels, agriculture and land use, and our freight system to name a few – and are backstopped by California’s pioneering Cap-and-Trade program. Cap-and-Trade is a market based tool that caps the state’s emissions and ensures we cost effectively meet our reduction goals after our complimentary policies do their work. Imagine California’s climate program as a skyscraper that needs to be built over the years to meet increasingly stringent goals. Cap-and-Trade works as the building’s structural steel frame critical to supporting the floors and meeting building goals as the building grows; the floors represent the state’s policy workhorses – the complimentary programs that tackle specific sectors. And of course, the Scoping Plan must be the blueprint. Get the blueprint wrong and you end up with a wobbly building, unable to maintain the long road to a sustainable economy. If California’s efforts wobble too much, it jeopardizes our success and global momentum when there is no time to spare. So far, our reduction targets have been modest and we’ve realized success by picking low hanging fruit. But the path to our 2030 reduction goals will be much more challenging. Overlay these stronger reduction goals with the depth and complexity of the world’s sixth largest economy and you begin to understand the importance of this framework. Thankfully, California has proven it is up to the task. As ARB Chair Mary Nichol’s exclaimed after the vote, “Literally everyone around the world is looking at California. Considering the gloomy news that we’re getting on a daily basis now about how much faster the global warming worst-case scenario is proceeding than anyone had thought early on, I think it behooves us to take a minute and say this is something really important and it’s good that we did it.” With President Trump rolling back federal efforts to reduce emissions, California’s role as America’s climate mitigation standard bearer was not lost on Chair Nichols. Now that the 2017 blueprint is approved, the hard road of implementation lies ahead. And that includes making sure that California’s climate mitigation efforts don’t have unintended impacts on vulnerable communities: California’s leadership must lead for all. But California is up to the task. Governor Brown – with support from Ceres, WWF International, BSR, and others – is convening the Global Climate Action Summit this September to drive private sector and subnational efforts to achieve reduction commitments abandoned by the Trump administration. And next month, the California state legislature will continue debate on a bill to codify one of the most ambitious renewable energy targets in the world. BICEP and many California business remain committed to ensuring California builds on its current success and continues to show the world that a vibrant economy goes hand in hand with healthy communities and aggressive climate action. Read the original blog on Triple Pundit Image credit: Flickr/Rennett Stowe

Nearly all climate scientists and every government on earth (except for one) agree that society faces profound risks from human-induced climate change. Does your mutual fund company, investment manager, or 401(k) manager agree that the risks are serious and extend to companies in their portfolios?    For an overview of risks to businesses from climate change and what they should disclose, see reports and recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosure (TCFD), Chaired by Michael Bloomberg, former Mayor of New York City. Examples of these risks already translating into impacts include the record-breaking string of Atlantic hurricanes and wildfires in North America. Opportunities include the plummeting prices and explosive growth in renewable energy and electric vehicles globally.   Warren Buffett wisely notes: “Only when the tide goes out do you discover who’s been swimming naked.” But we now know the tide is coming in, literally and metaphorically, as seas rise and rain falls in feet instead of inches. The risks from climate change to financial markets and companies are widespread. As the credit rating agency Moody’s recently warned, even municipal bond investors and issuers have plenty to worry about related to the changing climate.    Each year, Ceres partners with Fund Votes to rank the largest mutual fund companies based on how strongly they support climate-related shareholder proposals. (See methodology note at the end of the blog for more details.) The results for 2016 and 2017 are shown in Table 1, and the big news is that four of the top ten largest asset managers, together accounting for $12.8 trillion in assets under management, voted for a climate proposal for the first time ever. This has important implications.   All mutual fund companies have to vote on climate-related shareholder proposals annually. It is their legal fiduciary duty to vote guided by what is in their client’s best financial interests. Since many of the shareholder proposals ask companies to disclose climate-related risks and / or risk-mitigation strategies, a mutual fund company that votes against most or all of the proposals is vulnerable to accusations that it is ignoring or denying the impact of climate change on business and the global economy in its analyses to determine how it votes its proxies. (And if money managers ignore these issues in proxy voting, might this mean they ignore them while investing?) So it is remarkable that in 2017 five money management firms still failed to vote in favor of a single climate-related proposal: American Century, Cohen & Steers, Lord Abbett, Pioneer, and Putnam.  By voting this way, these firms are signaling they believe it is in their clients’ best interest if the companies in their portfolios avoid disclosing the profound and far-ranging risks related to climate change and opportunities tied to climate solutions. This approach defies common sense. In last year’s blog on mutual fund proxy voting we explore the possible explanations – each of them inadequate -- for this voting behavior.   The bigger news in 2017 is which big asset management firms voted for the first time ever “for” a climate-related proposal. The first-timers (and their global size ranking according to assets under management) are: BlackRock (1), Vanguard (2), Fidelity (4), and American Funds (8).  The sleeping giants of the mutual fund industry are waking up to climate risk. We see this in their proxy voting, in their engagements / dialogues with companies where they raise climate risk, and in their public statements and relevant background papers. Climate risk is now truly recognized as a mainstream issue impacting financial risk and return. What are the practical implications of the largest asset managers voting for climate-related shareholder proposals? Higher votes, and even majority votes on climate-related proposals, are now much more likely because these 4 asset managers collectively own around 10%-15% of many companies’ shares.   Indeed, 2017 produced the first majority votes ever on climate change shareholder proposals at oil and gas companies and electric utilities. The proposals requested that the companies issue analyses of the business impact of a scenario in which global average temperatures are kept from rising more than 2 degrees Celsius above pre-industrial levels. The shorthand name for these are ‘two degree scenario’ (2DS) proposals.  (As part of the Paris Agreement, all countries agreed to limit global average temperature rise to “well below” 2 degrees Celsius.  The U.S. is still technically signed-on to the Agreement at least until Nov 4, 2020, one day after the next presidential election.)  The majority votes in 2017 on 2DS proposals were: 62.1% at ExxonMobil, 67.3% at Occidental Petroleum, and 56.8% at electric utility PPL Corporation. While not legally binding, majority votes put enormous pressure on companies to address the issues raised in the resolution. It is a particularly dangerous move for a company’s board to ignore a majority of their shareholders. Even votes above around 25% apply significant pressure on companies to address the request made in the proposal. On December 11th, 2017, Exxon agreed to issue the disclosure requested by the proposal that received the majority vote last spring, which was filed by the New York State Comptroller’s Office and the Church of England, and backed by investors with over $10 trillion in assets under management.   ExxonMobil’s new disclosure will be issued in the context of a large and rapidly expanding pool of solid empirical evidence showing that environmental and social megatrends like climate change can affect financial performance. Many of the biggest global investment management firms already see this connection and ask companies in their portfolios to disclose and address the risks. This is a significant signal to companies from their owners that they must take action to address climate-related risks and opportunities. Despite the positive momentum and excitement among investors created by these majority votes, let us add some words of caution, putting the majority votes in context.   During the 2017 proxy season, approximately 90 climate-related shareholder proposals went to a vote at company annual meetings. The proposals requested that companies act on a variety of issues including setting greenhouse gas reduction goals, reducing methane leaks, and issuing sustainability reports. Seventeen of the proposals requested a 2DS analysis. Table 2 shows the percentage of these resolutions that each of 40 largest asset managers voted “for.”   BlackRock and Vanguard each supported only two of the resolutions (both voted “for” the proposals at ExxonMobil and Occidental Petroleum.) And these were the only climate-related proposals (out of 90) that they supported.   So, while it was an important breakthrough for two of the largest asset managers to finally vote for climate proposals, their clients and other investors should continue to urge these firms to speak out publicly and vote in support of other climate-related shareholder proposals where there is a strong business case.   In fact, pressure from their own shareholders and clients may have played an important role, along with the mainstreaming of climate risk in financial markets (e.g., see reference to TCFD above) in convincing both BlackRock and Vanguard to begin to vote for climate resolutions. Both firms received shareholder resolutions in 2017 filed by Walden Asset Management requesting a review of proxy voting on climate change. Walden withdrew both proposals in return for commitments by the companies to address the request.  So far during the 2018 proxy season, three resolutions have been filed with mutual fund companies requesting a review of proxy voting policies: Bank of New York Mellon (filed by Friends Fiduciary), Cohen & Steers (filed by Walden Asset Management), and T. Rowe Price (filed by Zevin Asset Management).   Tim Smith, Director of ESG Shareowner Engagement at Walden Asset Management, noted: ”We believe the recent voting changes by major mutual funds and investment firms signal an expansion of their climate change engagements with companies where they own shares. Meanwhile those mutual funds and investment managers that are just beginning to use their voice and vote will inevitably be pressed by their own investors and clients to be much more active leaders.” Another leader engaging large asset managers on their proxy voting on climate risk is Pat Tomaino, Associate Director of Socially Responsible Investing at Zevin Asset Management.  He put it this way: “The risk of climate change to investment portfolios is clear as day, confirmed by science and developed by blue-ribbon commissions. Now investors must act on that information — by reaching out to companies, by communicating with the public on climate change, and by consciously voting on reasonable shareholder proposals that urge companies toward progress and transparency. In short, the big investment companies need to step up and make judicious use of every tool in the toolbox to address climate change.” Jackie Cook, founder of Fundvotes.com, concludes: “Large asset managers wield considerable power with their proxy votes. This should be trained on avoiding climate-induced catastrophe in capital markets by promoting climate-related financial disclosures and strong board-level climate competence.“ Methodology Support by each asset manager shown in Tables 1 and 2 is calculated by computing, for each fund run by an asset management company, the percentage of votes “for,” “against,” or “abstain” for each resolution. The support levels by each fund are then averaged across the family of mutual of funds (or other investment vehicles) offered by the asset manager to derive their overall level of support for the Ceres-tracked climate-related resolutions voted on by the asset manager during each proxy season. The method just described is slightly different than what we used last year. As a result, the 2016 support levels shown in Table 1 differ in minor ways for a few firms from the support levels we published last year.  The change addresses situations where an asset management firm voted in different ways for the same resolution — for example one mutual fund voted “for” while another mutual fund within the same firm abstained. Last year, if 75% or more of funds within an asset management firm voted “for” a resolution, then that firm was considered to have voted “for" all of those resolutions.    Table 1:  The percentage of climate-related proposals voted “for” by each firm Click here to view the table in a larger PDF format Table 2:  Support for 2017 2-degree-scenario resolutions This table shows (in the right column) the percentage of shareholder proposals requesting 2 degree scenario analysis that each asset management firm voted “for.”  The left column shows the total assets under management for each firm. 

Among global food companies, there is a so-called drought of water-aware boards of directors. And for an industry that uses 70 percent of the world’s fresh water, on a warming planet with scarcer resources, that lack of awareness is a concern. Investors are zeroing in on how companies are tackling water and sustainability risks, and increasingly they’re focusing on the board room.  In a recent Ernst & Young survey of some 320 investors, more than 75 percent said that mandatory board oversight of sustainability disclosures is “essential” or “very useful” when making decisions about whether or not to invest in a company. Little wonder. Companies that have strong board oversight on sustainability issues, including water, send a signal to investors that they’re serious about these issues. And experts have long asserted that businesses perform better on actual indicators of sustainability when their boards are engaged. Now Ceres has research to back up the strength of this connection. In the recent update of our Feeding Ourselves Thirsty analysis, we found that among the 42 major food & beverage companies that we benchmarked on water risk management, there was a strong link between stronger governance and companies that performed well across the other categories, including operations and supply chain. Campbell Soup Company, for example, is among a small but growing group of companies that increasingly recognize the importance of strong governance when it comes to sustainability.  It’s one of four companies, along with Coca-Cola, Diageo and Nestlé, that briefs its board on water-related issues. All four scored among the top 10 in our benchmarking analysis. “Campbell’s CEO and board appreciate the opportunity to understand and assess sustainability performance within the context of core business strategy,” Dave Stangis, Chief Sustainability Officer at Campbell Soup Company told me. “Building that into the governance process drives accountability within the enterprise.” Or consider Molson, the 3rd highest ranking beverage company in our analysis.  As a part of the board’s mandate to oversee executive compensation metrics, Molson’s board has identified sustainability as a key indicator to measure executive performance.  At Molson, the corporate executive team is rewarded based on a set of metrics measured against the company’s 2020 sustainability targets, including water use. Unfortunately, these companies are the exception rather than the rule.  Not enough corporate boards are stepping up. Overall, the food companies we analyzed managed on average to get just 4.5 points out of the 17 we awarded on governance. And a string of major players scored a perfect zero—including Cargill, Archer Daniels Midland, Chiquita Brands and Tyson Foods. The takeaway is clear. On key indicators, ranging from board oversight of water-related issues and links between executive compensation and sustainability goals, the industry is lagging when it comes to governance. For instance, half of the boards we analyzed did not oversee material risks and opportunities related to sustainability and water. And even though we saw an increase in companies starting to link executive compensation to management of water-related issues, 71 percent of businesses didn’t take this critical step. Companies simply cannot afford to keep ignoring water and other sustainability issues like climate change that could materially affect corporate financial performance. For the $5 billion food sector, the combination of climate change and growing threats to water scarcity, including population growth and pollution, is turning water into one of the sector’s biggest financial risks.  In 2016, multinational corporations disclosed that they faced $14 billion of water-related risks, a five-fold increase over the previous year. Boards have a fiduciary responsibility to act when risks are material.  And that is why more companies need to develop sustainability competent boards. By understanding what climate change or water stress means, why it matters to their business and what their organizations can do, directors can successfully make climate and water risk part of their governance systems. That way, boards will be able to respond to the rising scrutiny among investors. They’ll be able to help prepare their companies for the risks and the opportunities created by water stress, climate change, or forced labor in their supply chains. Lead from the Top, outlines three basic steps companies can take to have a sustainably competent board: integrate knowledge of material sustainability issues into the board nominating process to recruit directors that ask the right questions; educate all directors on material sustainability issues to allow for thoughtful deliberation and strategic decision-making at the board level; and engage regularly with external stakeholders and experts on relevant sustainability issues. Again and again, we’ve seen how strong governance—or lack of it—determines whether companies thrive or stumble when they have to deal with major market challenges.  The corruption, deforestation and tainted meat scandals engulfing JBS, the world’s largest meat producer, drive home the importance of good leadership in tackling key challenges and maintaining profitability in the long-term. Food companies need to better prepare for the huge threat that water risks will have on their business. Turning that around will depend in large part on whether boards start waking up to the financial risks that water poses to their business. Read the original blog on Triple Pundit