Trump Administration Continues Attempts to Unravel U.S. Environmental Protections Put in Place Over Many Years – Now, Shareholder Proxy Resolution Actions on Climate Issues Also In Focus For Investors…

by Hank Boerner – Chair and Chief Strategist, G&A Institute

We should not have been surprised: in 2016 presidential candidate Donald Trump promised that among his first steps when in the Oval Office would be the tearing up of his predecessor’s commitment to join the family of nations in addressing climate change challenges. 

In late-December 2015 in Paris, with almost 200 nations coming to agreement on tackling climate change issues, the United States of America with President Barack Obama presiding signed on to the “Paris Agreement” (or Accord) for sovereign nations and private, public and social sector organizations come together to work to prevent further damage to the planet.

The goal is to limit damage and stop global temperatures from rising about 2-degrees Centigrade, the issues agreed to. 

As the largest economy, of course the United States of America has a key role to play in addressing climate change.  Needed: the political will, close collaboration among private, public and social sectors — and funding for the transition to a low-carbon economy (which many US cities and companies are already addressing).

So where is the USA? 

On June 1st 2017 now-President Trump followed through on the promise made and said that the U.S.A. would begin the process to withdraw from the Paris Agreement on climate change, joining the 13 nations that have not formally ratified the agreement by the end of 2018 (such as Russia, North Korea, Turkey and Iran).  

Entering 2019, 197 nations have ratified the Agreement.

A series of actions followed President Trump’s Paris Agreement announcement – many changes in policy at US EPA and other agencies — most of which served to attempt to weaken long-existing environmental protections, critics charged.

The latest move to put on your radar:  In April, President Trump signed an Executive Order that addresses “Promoting Energy Infrastructure and Economic Growth”.

[Energy] Infrastructure needs – a bipartisan issue – are very much in focus in the president’s recent EO.  But not the right kind to suit climate change action advocates. 

Important: The EO addressed continued administration promotion and encouraging of coal, oil and natural gas production; developing infrastructure for transport of these resources; cutting “regulatory uncertainties”; review of Clean Water Act requirements; and updating of the DOT safety regulations for Liquefied Natural Gas (LNG) facilities.

Critics and supporters of these actions will of course line up on both sides of the issues.

There are things to like and to dislike for both sides in the president’s continuing actions related to environmental protections that are already in place.

And then there is the big issue in the EO:  a possible attempt to limit shareholder advocacy to encourage, persuade, pressure companies to address ESG issues.

Section 5 of the EO“Environment, Social and Governance Issues; Proxy Firms; and Financing of Energy Projects Through the U.S. Capital Markets.” 

The EO language addresses the issue of Materiality as the US Supreme Court advises.  Is ESG strategy, performance and outcome material for fiduciaries? Many in the mainstream investment community believe the answer is YES!

Within 180 days of the order signing, the Secretary of the Department of Labor will complete a review existing DOL guidance on fiduciary responsibilities for investor proxy voting to determine whether such guidance should be rescinded, replaced, or modified to “ensure consistency with current law and policies that promote long-term growth and maximize return on ERISA plan assets”. 

(Think of the impact on fiduciaries of the recommendations to be made by the DOL, such as public employee pension plans.) 

The Obama Administration in 2016 issued a DOL Interpretive Bulletin many see as a “green light” for fiduciaries to consider when incorporating ESG analysis and portfolio decision-making.  The Trump EO seems to pose a direct threat to that guidance.

We can expect to see sustainable & responsible investors marshal forces to aggressively push back against any changes that the Trump/DOL forces might advance to weaken the ability of shareholders – fiduciaries, the owners of the companies! – to influence corporate strategies and actions (or lack of action) on climate change risks and opportunities.  Especially through their actions in the annual corporate proxy ballot process and in engagements. 

You’ll want to stay tuned to this and the other issues addressed in the Executive Order.  We’ll have more to report to you in future issues of the newsletter.

Click here to President Trump’s April 10, 2019 Executive Order.

Facts or not?  Click here if you would like to fact check the president’s comments on withdrawal from the Paris Agreement.

We are still in!  For the reaction of top US companies to the Trump announcement on pulling out of the Paris Accord, check The Guardiancoverage of the day.

At year end 2018, this was the roundup of countries in/and not.

For commentaries published by G&A Institute on the Sustainability Update blog related to the above matters, check out it here.

Check out our Top Story for details on President Trump’s recent EO.

This Week’s Top Stories

Trump Order Takes Aim at Shareholders Pushing Companies to Address Climate Change
(Wednesday – April 77, 2019) Source: Climate Liability News – President Trump has ordered a review of the influence of proxy advisory firms on investments in the fossil fuel industry, a mot that…

Environmental Threats to Us and Mother Earth – Seven Trends to Consider…and Develop Solutions From the Forum for the Future

by Hank Boerner – Chair and Chief Strategist, G&A Institute

This week we are celebrating Earth Day.  The first (in 1970) observance became a catalyst for action – soon after the first of a series of environmental-focused Federal legislation began to change dirty air to cleaner and then clean, and more laws to address a very unhealthy state of affairs in the U.S.A. (The Environmental Act, Clean Water Act, Clean Air Act, RCRA, etc.). 

But…the challenges for society have not gone away. The list of “hot ESG issues” grows by the week. 

Once an ESG issue emerges and people begin to dive into the details, a range of sub-issues arises.  In this corporate proxy season we are seeing top-line issues in focus and the underlying questions that investors have as they bring their resolutions to the companies for inclusion in the broader shareholder-base voting.

Example: Where “political spending” began as a broad issue the investors moved on to ask from where the company money was being spent directly(corporate donations to political party or candidate or PAC) to now, indirectly (is the company’s money going to business industry groups that lobby against shareholder interest – which ones, addressing what issues, how much money?) 

Some environmental challenges of the 1970s are still with us (consider the continuing impact of coal-burning, the state of global plastics disposal, and questions about water treatment such as in animal husbandry and fracking). And more issues are in focus under the huge bundle we refer to as “climate change”.

The evolvement of ESG as an integrated approach for investor evaluation of companies has complicated life for many corporate managers. 

In the recent past, a large-cap would assemble the “top 10” issues list for the management team and their direct reports to address.  For 3M, as example, “highway safety” and related issues under the heading would be high on the list (the company’s important product offerings would be directly impacted by changes). 

Today, that Top 10 list is all about the materiality of the issue(s) for many investors and companies — and how those issues are being measured, managed, how risk is being addressed and opportunities seized — and then reported to stakeholders.

In many large-cap companies a broader-based team will be busily shaping ESG strategy, policy, sustainability team practices and addressing issues-associated risk management on a much wider range of topics and subtopics. 

Timothy McClimon, head of the American Express Foundation, brings us his views on seven global trends – and their relevant issues – that are impacting the sustainability movement today. (You can think about how the seven impact your organization through the 2020s, the focus of the research and perspectives shared.)

He reviews the Forum for the Future’s report in a Forbes commentary.  The report is “Driving Systems Change in Turbulent Times” – with major implications for “how” or even “if” we will be able to address current global “E” challenges.  (Are patterns of behavior, structures or mindsets shifting toward or away from sustainability?)  Consider:

First – the plastics kickback; we continue to produce and then dispose of eight million tons each year with no real change in sight. (We are adding tons of material that will go “somewhere” and have an impact on society.)

Second – Climate change and the impact on mass migration; large parts of the world are becoming less hospitable and more people will try to move to safer places. Mass migrations are ahead. Perhaps as many as 2 billion persons will be affected by climate change and migrating away from their homes.

Third – around the world, Nationalism Marches Again; this is leading to fragmentation, intolerance, competition for fewer resources… complicated by growing inequality and a range of old and new “S” issues.

Fourth – We Live in the “On-Life” – by the end of this year, half of the world’s 7-billion-plus will be online, with issues arising (mental health, social cohesion, personal interaction, privacy and security, and more).

Fifth – The Rise of Participatory Democracy; cities and states lead the way in combating rising levels of protectionism and nationalism, which may usher in a new era of more local decision-making and civic participation.

Sixth – Asia’s Changing Consumerism; China leads the way with India, Japan, South Korea and Thailand close behind in moving more people into middle class status.  But, we are losing our global capacity to sustain them as the pursue the good life.  Millennials may slow the trend in Asia (they’re more conscious consumers).

Seventh – Biodiversity is Now in Freefall; scientists see mass extinction of some plant and animal species and one-fifth of the valuable Amazon rainforest has disappeared. (Something has to give to make room for growing food to meet the needs of the growing Earth population.) Little is being done about this, say the report authors.

How can we meet these global environmental challenges – what principles can be adopted to preserve the good life so many of the citizens of Earth enjoy today?  Some are spelled out in the Top Story for you.

Author Timothy J. McClimon is president of the American Express Foundation and serves on not-for-profit boards. He also teaches at New York University and at Johns Hopkins University.

Click here for more on the Forum for the Future (not for profit).

Each of the 7 trends has a chapter devoted to the issues. 
Click here for the full report.


This Week’s Top Stories

7 Global Trends Impacting The Sustainability Movement   
(Tuesday – April 16, 2019) Source: Forbes – the Forum for the Future advances seven trends that have major implications for how (or if) we will be able to address current global environmental challenges…

When Will Sustainable Investing Be Considered to be in the Mainstream?

by Hank Boerner – Chair and Chief Strategist, G&A Institute

“Movements” – what comes to mind when we describe the characteristics of this term are some 20th Century examples.

The late-20th Century “environmental movement” was a segue from the older 19th and early 20th Century “conservation movement” that was jump started by President Theodore Roosevelt (#26), who in his 8 years in the Oval Office preserved some 100,000 acres of American land every work day (this before the creation of the National Parks System a decade later).

The catalysts for the comparatively rapid uptake of the environmental movement?  American rivers literally burned in the 1960’s and 1970’s (look it up – Cuyahoga River in Ohio was one).

And that was just one reason the alarm bells were going off.  New York’s Hudson River was becoming an open, moving sewer, with its once-abundant fish dying and with junk moving toward the Atlantic Ocean.  Many East Coast beaches were becoming fouled swamp lands.

One clarion call – loud & clear — for change came from the pen.  The inspired naturalist / author Rachel Carson wielded her mighty pen in writing the 1962 best-seller, “Silent Spring”. 

That book helped to catalyze the rising concerns of American citizens. 

She quickly attracted great industry criticism for sounding the alarm…but her words mobilized thousands of early activists. And they turned into the millions of the new movement.

She explained the title:  There was a strange stillness.  Where had the little birds gone? The few birds seen anywhere were moribund; they trembled violently and could not fly.”  (Hint:  the book had the poisonous aspects of the DDT pesticide at its center as the major villain.)

Americans in the 1960s were becoming more and more alarmed not only of dumping of chemical wastes into rivers and streams and drifting off to the distant oceans —

—but also of tall factory smokestacks belching forth black clouds and coal soot particles;

–of large cities frequently buried beneath great clouds of yellow smog a mile high on what were cone clear days;

–of dangerous substances making their way into foods from the yields of land and sea;

–of yes, birds dropping out of the sky, poisoned;

–of tops of evergreen and other trees on hilltops and mountains in the Northeast burned clean off by acid rain wafting in from tall utility smokestacks hundreds of miles away in the Midwest…and more. 

Scary days. For public health professionals, dangerous days.

We will soon again be celebrating Earth Day; give thanks, we are long way from that first celebration back in spring 1970. (Thank you, US Senator Gaylord Nelson of Wisconsin for creating that first Earth Day!)

Most of our days now are (as the pilots cheer) CAVU – ceiling (or clear) and visibility unlimited. 

We can breathe deep and as we exhale thank many activists for persevering and driving dramatic change and creating the modern environmental movement… and on to the sustainability movement. 

And now – is it time (or, isn’t time!) for another movement along these lines…the sustainable investing movement going mainstream? 

Experts pose the question and provide some perspectives in this week’s Top Story.

In Forbes magazine, they ask:  “Why Hasn’t Sustainable Investing Gone Viral Yet?”

Decio Fascimento, a member of Forbes Council (and chief investment officer of the Richmond Global Compass Fund) and the Forbes Finance Council address the question in their essay.

In reading this, we’re reminded that such mainstream powerhouse asset managers as BlackRock, State Street/SSgA, Vanguard Funds, TIAA-CREF, and asset owners New York State Common Fund, New York City pension funds (NYCPERS), CalPERS, CalSTRS and other capital market players have embraced sustainable investing approaches. 

But – as the authors ask:  what will it take for many more capital market players to join the movement?  There’s interesting reading for you in the Top Story – if you have thoughts on this, send them along to share with other readers in the G&A Institute universe.

Or send comments our way to supplement this blog post.


This Week’s Top Stories

Why Hasn’t Sustainable Investing Gone Viral Yet?
(Wednesday – April 10, 2019) Source: Forbes – Let’s first look at what sustainability looks like in financial terms. In sustainable investing, the ideal scenario is when you find opportunities that produce the highest returns and have the highest positive impact. 

And of further reading for those interested:

SCARY STUFF: The Fourth Official “Climate Science Special Report” by the U.S. Government’s “Global Change Research Program”

by Hank Boerner – Chair & Chief Strategist – G&A Institute

Whether you are an investor, company executive or board member, or an issue advocate, or civic leader, these “high probability” outcomes should keep you up at night:  more superstorms; more drought; increased risk of forest fires; more floods; rising sea levels; melting glaciers; ocean acidification; increasing atmospheric water vapor (thus, more powerful rainstorms)…and more.

How about a potential drop of 10% in the U.S.A. Gross Domestic Product by end of this century?

These are some of the subjects explored in depth in the fourth “Climate Science Special Report” of the U.S. Global Change Research Program.  That is a collaborative effort of more than a dozen Federal departments, such as NOAA, NASA, US EPA, and executive branch cabinet offices of Commerce, Agriculture, Energy, State, Transportation, and Defense; plus the OMB (Office of the President).

The experts gathered from these departments of the U.S. government plus a passel of university-based experts, reported last week (in over 1600 pages of related content) on the “state of science relating to climate change and its physical impacts.”

The CSSR (the Climate Science Special Report) serves as a foundation for efforts to assess climate-related risks and inform decision-makers…it does not include policy recommendations.  The results are not encouraging – at least not in November 2018.

The National Oceanic and Atmospheric Administration (NOAA) is the lead agency working with NASA and other governmental bodies to develop the report – which analyzes current trends in climate change and project major trends out to the end of this 21st Century.  The focus of the work is on human welfare, societal, economic, and environmental elements of climate change.

Each chapter of the report focuses on key findings and assigns a “confidence statement” for scientific uncertainties. There are 10 regional analyses of recent climate change (such as the Northeast, and Southern Great Plains).

Some highlights:

(1) This period is now the warmest in the history of modern civilization.

2) Thousands of studies have documented changes in surface, atmospheric and oceanic temps;

(3) glaciers are rapidly melting;

4) we have rising sea levels;

5) the incidence of daily tidal flooding is accelerating in more than 25 Atlantic and Gulf coast cities.

The various findings, the authors point out, are based on a large body of scientific, peer-reviewed research, evaluated observations and modeling data sets. In this report, we should note, experts and not politicians speak to us in clear terms.

Global climate is projected to change over this century (and beyond) – the report is replete with “likelihoods” of events) and the experts state that with major effort, temps could be limited to 3.6°F / 2°C or less – or else.  Without action, average global temperatures could increase 9°F / 5°C relative to pre-industrial times – spelling disaster at the end of the 2100s.

The Financial Stability Board’s  (FSB) Task Force on Climate-Related Financial Disclosures (the “TCFD”) strongly recommendations that the financial sector companies and (initial) four business sectors begin to test scenarios against (to begin with) 2-degrees Centigrade (3.5°F) temp rise and increase from there.

The four industry groups in the Financial Sector are:  Banks, Insurance Companies, Asset Owners, Asset Managers.

The four non-financial business sectors are:  Agriculture. Food & Forest Products; Buildings & Materials; Transportation; Energy (Oil & Gas).

This new national assessment from the Federal government should be a valuable resource for investors, bankers, insurance carriers and a wide range of companies in their scenario planning (content related to alternative scenarios is in the report).

Click the links below for:

TCFD information is here: https://www.fsb-tcfd.org/

Our Top Story in Sustainability Highlights this week is The Washington Post’s take on the report and its issuance by the Federal government on what some officials considered to be a slow Thanksgiving Friday news period.  The news coverage that followed was anything but “slow”!

Washington Post – Climate story by Brady Dennis and Christ Mooney
Major Trump administration climate report says damage is ‘intensifying across the country’

(Friday November 23, 2018) Source: The Washington Post – Scientists are more certain than ever that climate change is already affecting the United States — and that it is going to be very expensive. The federal government on Friday released a long-awaited report with an unmistakable message: The effects of climate change, including deadly wildfires, increasingly debilitating hurricanes and heat waves, are already battering the United States, and the danger of more such catastrophes is worsening.

Breaking News: $12 Trillion in Professionally Managed Sustainable Investment Assets — $1-in-$4 of Total U.S. Assets

by Hank Boerner – Chair and Chief Strategist – G&A Institute

Call it “sustainable and responsible investing” or “SRI” or “ESG investing” or “impact investing” – whatever your preferred nomenclature, “sustainable investing” in the U.S.A. is making great strides as demonstrated in a new report from US SIF.

The benchmark report issued today – “The Report on US Sustainable, Responsible and Impact Investing Trends 2018” – by the U.S. Forum for Sustainable and Responsible Investment (US SIF) puts things in perspective for investors and corporate managers:

  • At the beginning of 2018, the institutional owners and asset management firms surveyed reported total sustainable investment at US$12 trillion AUM – that is 26% of the total assets under professional management in the U.S.A. — $1-in-$4 of all investable assets!
  • That’s an increase of 38% since the last US SIF report at the start of 2016. The AUM of sustainable investments then was $8.72 trillion. That was $1-in-$5.
  • And that was an increase of 33% since the survey of owners and managers at the start of 2014.
  • Sustainable investing jumped following the 2008 financial crisis, with growth of 240% from 2012 to 2014.

The US SIF bi-annual survey of investors began in 1995, when the total of sustainable investments professionally managed was pegged at $639 billion. There has been an 18-fold increase in sustainable investing assets since then – at a compound rate of 13.6% over the years since that pioneering research was done.

The researchers queried these institutions in 2018:

  • 496 institutional owners (fiduciaries such as public employee pension funds and labor funds – these represented the component of the survey results at $5.6 trillion in ESG assets**).
  • 365 asset/money managers working for institutional and retail owners;
    private equity firms, hedge fund managers, VC funds, REITS, property funds;
    alternative investment or uncategorized money manager assets);
  • 1,145 community investing institutions (such as CDFIs).

What is “sustainable investing”?  There are these approaches adopted by sustainable investors:

  • Negative/exclusionary screening (out) certain assets (tobacco, weapons, gaming);
  • Positive/selection of best-in-class considering ESG performance (peer groups, industry, sector, activities);
  • ESG integration, considering risks and opportunities, ESG assets and liabilities);
    Impact investing (having explicit intention to generate positive social and environmental impact along with financial return);
  • Sustainability-themed products.

The top ESG issues for institutional investors in 2018 included:

  • Conflict Risk (terror attacks, repressive regimes) – $2.97 trillion impact;
  • Tobacco related restrictions – $2.56 trillion
  • Climate Change / Carbon-related issues – $2.24 trillion
  • Board Room issues – $1.73 trillion
  • Executive Pay – $1.69 trillion

Asset managers identified these issues as among the most important of rising concerns:

  • Climate change and Carbon
  • Conflict risk

Prominent concerns for asset owners included:

  • Transparency and Corruption
  • Civilian firearms / weapons
  • a range of diversity and equal employment opportunity issues.

The Proxy Voting Arena

The shareowners and asset managers surveyed regularly engage with corporate executives to express their concerns and advocate for change in corporate strategies, practices and behaviors through presentation of resolutions for the entire shareholder base to vote on in the annual corporate elections.

From 2016 to 2018 proxy seasons these resolutions were focused on:

  • Proxy access for shareowners (business associations have been lobbying to restrict such access by qualified shareowners).
  • Corporate Political Activity (political contributions, lobbying direct expenses and expenses for indirect lobbying by business groups with allocated corporate contributions).
  • A range of environmental and climate change issues.
  • Labor issues / equal employment opportunity.
  • Executive compensation.
  • Human Rights.
  • Call for independent board chair.
  • Board Diversity.
  • Call for sustainability reporting by the company.

Public employee pension systems/funds led the campaigns with 71% of the resolutions filed in 2016, 2017 and 2018.

Labor funds accounted for 13% of filings.

Asset/money management firms accounted for 11.5%.

A total of 165 institutional owners and 54 asset managers filed or co-filed resolutions on ESG issues at the beginning of the 2018 proxy voting season.

The ESG Checklist

The institutions and asset managers queried could answer queries that addressed these ESG, community, product factors in describing their investment analysis, decision-making and portfolio construction activities. This is a good checklist for you when discussing ESG issues and topics with colleagues:

The “E” – Environmental:

  • Clean technology
  • Climate change / carbon (including GhG emissions)
  • Fossil fuel company divestment from portfolio, or exclusion
  • Green building / smart growth solutions
  • Pollution / toxics
  • Sustainable Natural Resources / Agriculture
  • Other E issues

The “S” – Social (or “societal”):

  • Conflict risk (repressive regimes, state sponsors of terrorism)
  • Equal employment opportunity (EEO) / diversity
  • Gender lens (women’s socio-economic progress)
  • Human rights
  • Labor issues
  • Prison-related issues (for-profit prison operators)
  • Other S issues

The “G” – Corporate Governance:

  • Board-related issues (independence, pay, diversity, response to shareowners)
  • Executive pay
  • Political contributions (lobbying, corporate political spending)
  • Transparency and anti-corruption policies

Product / Industry Criteria:

  • Alcohol
  • Animal testing and welfare
  • Faith-based criteria
  • Military / weapons
  • Gambling
  • Nuclear
  • Pornography
  • Product safety
  • Tobacco

Community Criteria:

  • Affordable housing
  • Community relations / philanthropy
  • Community services
  • Fair consumer lending
  • Microenterprise credit
  • Place-based investing
  • Small and medium business credit

The report was funded by the US SIF Foundation to advance the mission of US SIF.

The mission: rapidly shift investment practices towards sustainability, focusing on long-term investment and the generation of positive social and environmental impacts. Both the foundation and US SIF seek to ensure that E, S and G impacts are meaningfully assessed in all investment decisions to result in a more sustainable and equitable society.

The bold name asset owners and asset managers and related firms that are members of US SIF include Bank of America, AFL-CIO Office of Investment, MSCI, Morgan Stanley, TIAA-CREF, BlackRock, UBS Global Asset Management, Rockefeller & Co, Bloomberg, ISS, and Morningstar.

Prominent ESG / sustainable investment players include Walden Asset Management, Boston Common Asset Management, Clearbridge, Cornerstone Capital, Neuberger Berman, As You Sow, Trillium Asset Management, Calvert Investments (a unit of Eaton Vance), Domini Impact Investments, Just Money Advisors, and many others.

The complete list is here: https://www.ussif.org/institutions

Information about the 2018 report is here: https://www.ussif.org/blog_home.asp?display=118

About the US SIF Report:  The report project was coordinated by Meg Voorhees, Director of Research, and Joshua Humphreys, Croatan Institute.  Lisa Woll is CEO of US SIF.  The report was released at Bloomberg LP HQs in New York City; the host was Curtis Ravenel, Global Head of Sustainable Business & Finance at Bloomberg. q1

Governance & Accountability Institute is a long-time member. EVP Louis D. Coppola is the Chair of the US SIF Company Calls Committee (CCC) which serves as a resource to companies by providing a point of contact into the sustainable investment analyst community

** Institutional owners include public employee retirement funds, labor funds, insurance companies, educational institutions, foundations, healthcare organizations, faith-based institutions, not-for-profits, and family offices.

The FSB Task Force (TCFD) on Climate-Related Financial Disclosure And The Dramatic Contents of the Intergovernmental Panel on Climate Change – Hot Topics

A Brief Checklist of the Discussion for You This Week…

by Hank Boerner – Chair and Chief Strategist, G&A Institute

The Intergovernmental Panel on Climate Change (IPCC) was organized by the United Nations Environment Programme (UNEP) and the World Meteorological Organization (WMO) in 1988 (30 years ago!) to provide a “clear scientific view of the current state of knowledge in climate change and its potential environmental and socio-economic impacts”.

In the late 1970s, the discussion about climate change and global warming began to, well, pardon the pun – heat up!  Foreign Affairs magazine, in 1978 posed the question:  “What Might Man-Induced Climate Change Mean?”

“The West Antarctica Ice Sheet and CO2 Greenhouse Gas Effect” appeared in the authoritative publication, Nature in the same year.  The debate was on — and multi-lateral organizations and governments began to take note and respond. Ten years later the IPCC debuted on the global scene.

Over the years since there have many meetings and studies produced, with 195 countries eventually joining the IPCC membership.  Including, significantly, China, the USA, the United Kingdom, the Russian Federation, Germany, France, Italy, Ireland, Israel… and many other sovereigns. The membership list is here: http://www.ipcc.ch/pdf/ipcc-faq/ipcc_members.pdf

Thousands of scientists – subject matter experts – regularly participate in the work of the organization, which is typically around task forces and delving into specific issues.  This gives the IPCC findings and recommendations “a unique opportunity to provide rigorous and scientific information to decision-makers”. The work is policy-relevant but also policy-neutral and never policy-prescriptive.

In October 2018 the IPCC issued a Special Report on Global Warming of 1.5C (above pre-industrial levels) and the rising threat of climate change, as well as sustainable development (think of the SDGs) and efforts to wipe out poverty.

The report and related materials are here for you: http://www.ipcc.ch/

Our Top Story comes from our colleagues at Ethical Corporation, authored by Karen Luckhurst.  She reports on the related activities during a two-days of  meetings at which the FSB’s Task Force on Climate-Related Financial Disclosure (TCFD) recommendations and the  IPCC Special Report were analyzed and discussed by corporate and organizational leaders.

She shares with us 10 top takeaways from the TCFD discussions and includes the comments on key players – Richard Howitt, CEO of the IIRC; Susan Beverly of Abbott; Richa Bajpai of Goodera; GRI’s Pietro Bertazzi (head of sustainable development); Laura Palmeiro of Danone; Professor Donna Marshal at USC College of Business; Mark Lewis at Carbon Tracker; Katie Schmitz Eulitt of the Sustainable Accounting Standards Board; Mairead Keigher of NGO Shift (human rights organization); Daniel Neale at Corporate Human Rights Benchmark; Craig Davies at EBRD (investments); and Andre Stovin at AstraZeneca.

Richard Howitt of IRRC told the group that there is a major alignment soon to be announced with other reporting standards agencies (GRI, CDP) – watch for that.

Do read the Top Story this week.  And, mark your calendars – the Ethical Corp “Responsible Business Summits” are coming to San Diego, CA on November 12th; to New York City on March 18, 2019 and on to London for June 10th convening.  There is more information at:http://www.ethicalcorp.com/events.

Governance & Accountability Institute has been a long-term event media partner of Ethical Corporation events for going on 8 years.

This Week’s Top Story

Ten takeaways from the Sustainability Reporting and Communications Summit
(Tuesday – October 16, 2018) Source: Ethical Corp – Reporting on the SDGs, alignment between reporting standards, and the Task Force on Climate, Climate-Related Financial Disclosure were big topics during two days of high-level discussion…

UN IPCC Warns Us: The Time to Act Is Now – The Window For Action on Global Warming is Fast Closing

by Hank Boerner – Chair and Chief Strategist – G&A Institute

The buzz for the past few days has been about the report of the UN Intergovernmental Panel on Climate Change (IPCC) that urged governments everywhere to “take rapid and far-reaching and unprecedented changes in all aspects of society” to avoid catastrophic events and conditions brought on by climate change.

Why?  The planet temperature could reach the critical point – keep 1.5 degrees Celsius / 2.7 F above pre-industrial levels in mind.  We must get measures in place to address the threats of floods, rising seas, food shortages, shrinking arable land, wildfires, rising seas…and more.

Today 195 countries are members of the IPCC (including the United States, United Kingdom, China, Germany, and France) — and thousands of scientists all over the world contribute to the work of the organization.

The panel based its findings on the current high levels of greenhouse gas emissions (GHG).  These are carbon dioxide (CO2), methane (CH4), nitrous oxide (NO2), and a number of fluorinated gases (such as hydrofluorocarbons). GHGs are measured in parts per million (ppm), parts per billion (ppb) and per trillion. The gases can remain in our atmosphere for years, decades, centuries.

The end effect is to make our Earth warmer and warmer over time.

And where do the GHG emissions come from?  Transportation, production of electricity, industry (using fossil fuels for energy, production), buildings (commercial, residential, industrial), and use of the land (agriculture, forestry, ranching).

The key takeaways from the IPCC report:  We have not done enough in the past / we are not doing enough now (to address global warming) – and we have to dramatically increase the critical steps needed to slow and stop global warming and move the global society back to the pre-industrial levels of GHG emissions (150 to 200 years ago).

The key is more aggressive and rapid reduction of carbon emissions.  Think about achieving that while continuing economic growth (everyone’s desire, everywhere); dealing with steadily increasing population growth (we are on our way to 9 billion level by 2050 says the UN); keeping public sector expenditures at levels that sustain our present way of life while allocating funds to address climate change threats; and, avoiding catastrophic upheavals of various kinds in the decades ahead.

The IPCC report is sobering.  Our Top Story this week is a good review by CNN of where we are today and the rapidly-diminishing days we have left to begin very serious efforts for a course correction.

IPCC background information is available for you at: https://wg1.ipcc.ch/

The U.S. EPA web site also has information at a glance for you: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions

You can also access the annual Inventory of U.S. GHG Emissions and Sinks there.

This Week’s Top Story

Planet has only until 2030 to stem catastrophic climate change, experts warn
(Monday – October 08, 2018) Source: CNN – Holding global warming to a critical limit would require “rapid, far-reaching and unprecedented changes in all aspects of society,” says a key report from the global scientific authority on climate change.

Colleges and Universities and Global Sustainability – Many Higher Ed Institutions Are Addressing the 21st Century’s Great Societal Challenges in Many Ways in North America, Asia-Pacific and Europe

by Hank Boerner – Chair and Chief Strategist – G&A Institute

United Nations Secretary-General Ban Ki-Moon thinks that institutions of higher learning are “…the leading torch bearers for global sustainability.”  The world’s universities, adds the Study International organization team: “…Universities play a vital role in helping us understand climate change…”

The Study International Staff looks at the roles of universities in addressing climate change challenges in the U.S.A., Asia-Pacific and in Europe in a very informative wrap-up that is one of our Top Stories this issue.

Under the Climate Leadership Network, they explain, more than 600 colleges and universities in every U.S. state and the District of Columbia have committed to take action on climate change, preparing students through research and education to solve 21st Century challenges.

The institutions profiled today:  the University of Utah’s College of Mines and Earth Sciences; the University of Queensland in Australia; College of Science and Technology, Temple University (USA); Asian School of Environment, Nanyang Technological University (NTU) in Singapore.

Our other two related Top Stories for you are (1) a feature from Florida by Bakari M. McClendon at the Florida A&M University’s Sustainability Institute (go Rattlers!), about the great work being done at the school to work toward “climate (impact) neutrality”, collaborate with the community and prepare students for the sustainability challenges of the 21st Century. (The school is a public, historically  African-American institution).

It’s a fascinating wrap up and FAMU faculty, staff and students are justifiably proud of telling.

And (2) on the other American coastline, far to the west, at the University of California’s Santa Barbara campus, there’s news about the school being named among the top-performing institutions in the 2019 Sustainable Campus Index (did you know there was such an index?).

The index is from the Association for the Advancement of Sustainability in Higher Education (“AASHE”) and it annually ranks the nation’s most sustainable colleges and universities in 17 impact areas related to academics, engagement, operations and administration based on it “STARS” methodology.  UCSB is part of the “sustainability revolution” in California that is helping to set the pace for the U.S.A. in addressing climate change challenges.

Here at G&A Institute we have a program for select intern-analysts to assist with ESG / sustainability / corporate disclosure and reporting research projects — which we then share results [of] with you on our G&A web platforms.

We are proud of the men and women who have participated in our rigorous programs over the years since 2010 – they are now influential in helping to advance corporate sustainability and sustainable investing out “in the real world” – you can find their profiles on our Honor Roll at:  https://www.ga-institute.com/about-the-institute/the-honor-roll.html

And the results of their research over the recent years that these outstanding professionals have helped to conduct is found at: https://www.ga-institute.com/research-reports/research-reports-list.html

If you are a college/university student, particularly a grad student, and you would like to be considered for an internship with G&A Institute, please examine this: INTERNSHIP OPPORTUNITIES: SUSTAINABILITY REPORTS DATA ANALYST

P.S.  If you don’t know about the Study International organization, which operates from the UK, Australia and Malaysia, and helps students find educational institutions and graduate employers connect, you can tune in to their web platform: www.studyinternational.com

Perhaps you will find an institution that your organization can collaborate with, or a graduate to fill that sustainability position at your organization.

This Week’s Top Stories

Resilient research hubs that strive for global sustainability
(Thursday – August 30, 2018)
From heads of states to businesses, civil society to Silicon Valley, leaders are not immune to the forces of change before us. Developmental, environmental and other social challenges…

Education is a launch pad for sustainability problem-solvers
(Tuesday – August 28, 2018) Source: Tallahassee Democrat – Colleges and universities are uniquely positioned to build pathways to interdisciplinary, solutions-oriented sustainability education for the thought leaders of tomorrow

Sustainability Strides
(Tuesday – August 28, 2018) Source: The Current – UC Santa Barbara named among top-performing institutions in three key categories in the 2018 Sustainable Campus Index

Calling Your Attention To

The JAMA Network (Journal of the American Medical Association) published an analysis of Health Care Organizations’ sustainability and CSR reporting. We share with you this week a very informative commentary from the JAMA Network (Journal of the American of the American Medical Association -AMA) that should be interesting reading for managers of healthcare facilities. This is an assessment of the sustainability reporting by large health care delivery organizations (HCOs) performed by two medical professional, Emily Senay, M.D., MPH; and, Philip J. Landrigan, M.D. MSC2:

Assessment of Environmental Sustainability and Corporate Social Responsibility Reporting by Large Health Care Organizations
(Thursday – August 30, 2018) Source: Jame Network, Emily Senay, MD, MPH1; Philip J. Landrigan, MD, MSc2 – Do large health care organizations participate in the business trend to report on sustainability activities?

Global Warming / Climate Change — What Are Current Weather Events and Dramatic Changes Telling Us?

By Hank Boerner – Chair and Chief Strategist – G&A Institute

The National Geographic describes “Global Warming” as a set of changes to the Earth’s climate, or long-term weather patterns, varying from place-to-place.  The dramatic changes in the rhythms of climate could affect the face of our planet – coasts, forests, farms, mountains…all hang in the balance.

So, also hanging in the balance:  the fate of humanity!

Explains NatGeo:  “Glaciers are melting, sea levels are rising, cloud forests are dying, and wildlife scrambles to keep pace.  It’s becoming clear that humans have caused most of the past century’s warming by releasing heat-trapping gases as we power our modern lives.  Greenhouse gases (GhGs) are at higher levels now than in the last 650,000 years.” *

“Climate Change” is the less politically-volatile term used by leaders in the public and private sectors (such as in the numerous shareholder-presented proxy resolutions that are on the ballots of public companies for owner voting and in the language of corporate sustainability reporting).

Carbon Dioxide emissions (CO2) released into the atmosphere have increased by a third since the start of the Industrial Revolution, and so addressing this challenge would logically be a prime responsibility of those who benefited most from the 200-year-plus revolution – pretty much all of us!

The political climate in most of the developed industrial world is mostly reflective of the will to do “something” – witness the almost 200 sovereign nations signing on to the Paris Agreement in 2015 (“COP 21”) to work together and separately to holding the temperature rise to well below 2-degrees Centigrade (3.5F), the pre-industrial levels — and pursuing efforts to limit the temperature rise to 1.5-degrees C above pre-industrial levels. (“As soon as possible.”)

The Agreement also calls for the increasing society’s ability to adapt to the adverse impacts of climate change and foster climate resilience including low GHG emissions development. **

The outlier nation to the agreement, sad to say, is the world’s largest economy and significant GHG emitter, the United States of America, which has begun the withdrawal process from the Paris Agreement.

This week we present a selection of top stories about climate change – and global warming! – to illustrate the effects of a changed climate around the globe.  And to send signals to the doubting policymakers in Washington DC that the threat is real!

The good news is that many corporate managements, powerful institutional investors, and public policy makers in a growing number of leaders in U.S. cities, states and regions are committed to the goals of the Paris Agreement and working to implement steps to hold the line – to build resilience – that will benefit all of society.

We really do have to hurry — take a look at what is happening around our planet:

This Week’s Top Stories:
Drought, Heat Wave, Wild Fires
— Is the Earth Burning Up?

Earth at risk of becoming ‘hothouse’ if tipping point reached, report warns
(Tuesday – August 07, 2018) Source: CNN – Scientists are warning that a domino effect will kick if global temperatures rise more than 2°C above pre-industrial levels, leading to “hothouse” conditions and higher sea levels, making some areas on Earth uninhabitable.

5-year drought raises questions over Israel’s water strategy
(Monday – August 06, 2018) Source: ABC News – For years, public service announcements warned Israelis to save water: Take shorter showers. Plant resilient gardens. Conserve. Then Israel invested heavily in desalination technology and professed to have solved the problem by…

Our climate plans are in pieces as killer summer shreds records
(Monday – August 06, 2018) Source: CNN – Deadly fires have scorched swaths of the Northern Hemisphere this summer, from California to Arctic Sweden and down to Greece on the sunny Mediterranean. Drought in Europe has turned verdant land barren, while people in Japan and…

Are devastating wildfires a new normal? “It’s actually worse than that,” climate scientist says
(Wednesday – August 08, 2018) Source: CBS News – California Gov. Jerry Brown has called the devastating wildfires tearing through Northern California “part of a trend — a new normal.” But one climate scientists says “it’s actually worse than that.”

Europe battles wildfires amid massive heat wave
(Wednesday – August 08, 2018) Source: ABC News – Record-breaking temperatures across Europe have forced people to sleep in a Finnish supermarket, uncovered a piece of World War II history in Ireland and are making it harder to battle the wildfires that have been raging in Spain…

Don’t despair – climate change catastrophe can still be averted
(Wednesday – August 08, 2018) Source: The Guardian – The future looks fiery and dangerous, according to new reports. But political will and grassroots engagement can change this…

Australia’s most populous state now entirely in drought
(Thursday – August 09, 2018) Source: CBS – CANBERRA, Australia — Australia’s most populous state was declared entirely in drought on Wednesday and struggling farmers were given new authority to shoot kangaroos that compete with livestock for sparse pasture during the…

Nearly 140 people dead amid Japan heat wave
(Thursday – August 09, 2018) Source: WTNH – Japan is dealing with a heat wave that had killed 138 people. The heat wave started back in May and has been roasting the country ever since…

Europe bakes again in near-record temperatures
(Thursday – August 09, 2018) Source: Phys.org – Europe baked in near-record temperatures on Monday but hopes were for some respite after weeks of non-stop sunshine as people come to terms with what may prove to be the new normal in climate change Europe…

* Greenhouse Gases are defined as a gas trapping heat in the atmosphere, contributing to the “greenhouse effect” by absorbing radiation:  carbon dioxide/CO2, methane, nitrous oxide, and flouorinated gases (such as chlorofluorocarbons, sulfur hexafluoride).

** The Paris Agreement is at: https://unfccc.int/sites/default/files/english_paris_agreement.pdf

U.S. States and Cities — “Still In” to the Paris Agreement — and Great Progress is Being Made

By Hank Boerner – Chair & Chief Strategist, G&A Institute

This is our second commentary this week on the occasion of the first anniversary of the decision by the Trump White House in June 2017 to begin the multi-year process of formal withdrawal of the United States of America from the Paris COP 21 climate agreement…

The action now is at the state and municipal levels in these United States of America.

Where for years the world could count on US leadership in critical multilateral initiatives – it was the USA that birthed the United Nations! – alas, there are 196 nations on one side of the climate change issue (signatories of the 2015 Paris Agreement) and one on the other side: the United States of America. At least at the sovereign level.

Important for us to keep in mind: Individual states within the Union are aligned with the rest of the world’s sovereign nations in acknowledging and pledging to address the challenges posed by climate change, short- and longer-term.

Here’s some good news: The United States Climate Alliance is a bipartisan coalition of 17 governors committed to upholding the goals of the Paris Agreement on climate change. These are among the most populous of the states and include states on both coasts and in the nation’s Heartland.

The Paris meetings were in 2015 and at that time, the USA was fully on board. That was in a universe now far far away, since the election of climate-denier-in-chief Donald Trump in 2016.

On to the COP 23 and the USA

In 2017, two years after the Paris meetings, the USA officially snubbed their sovereign colleagues at the annual climate talks. A number of U.S. public and private sector leaders did travel to Bonn, Germany, to participate in talks and represent the American point-of-view. This included Jerry Brown, Governor, California (the de facto leader now of the USA in climate change); former New York City Mayor (and Bloomberg LP principal) Michael Bloomberg; executives from Mars, Wal-mart and Citi Group.

While the U.S. government skipped having a pavilion at the annual United Nations-sponsored climate summit for 2017, the US presence was proclaimed loud and clear by the representatives of the U.S. Climate Action Center, representing the climate change priorities of US cities, states, tribes and businesses large and small who want action on climate change issues.

Declared California State Senator Ricardo Lara in Bonn: “Greetings from the official resistance to the Trump Administration. Let’s relish being rebels. Despite what happens in Washington DC we are still here.”

# # #

As the one year anniversary of President Trump’s announcement to leave the global Paris Agreement (June 1, 2018), state governors announced a new wave of initiatives to not only stay on board with the terms agreed to in Paris (by the Obama Administration) but to accelerate and scale up their climate actions.

Consider: The Alliance members say they are on track to have their state meet their share of the Paris Agreement emission targets by 2025.

Consider: The governors represent more than 40 percent of the U.S. population (160 million people); represent at least a US$9 trillion economic bloc (greater than the #3 global economy, Japan); and, as a group and individually are determined to meet their share of the 2015 Paris Agreement emissions targets.

Consider: Just one of the states – California – in June 2016, according to the International Monetary Fund, became the sixth largest economy in the world, ahead of the total economy of France (at #7) and India (#8).

Consider: The US GDP is estimated at $19.9 trillion (“real” GDP as measured by World Bank); the $9 trillion in GDP estimated for the participating states is a considerable portion of the national total.

The states involved are: California, Colorado, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and the Commonwealth of Puerto Rico.

The initiatives announced on June 1, 2018 include:

Reducing Super Pollutants (including hydrofluorocarbons (HFCs), one of the Greenhouse Gases, and harnessing waste methane (another GhG).

Mobilizing Financing for Climate Projects (through collaboration on a Green Banking Initiative); NY Green Bank alone is raising $1 billion or more from the private sector to deploy nationally).

Modernizing the Electric Grid (through a Grid Modernization Initiative, that includes avoidance of building out the traditional electric transmission/distribution infrastructure through “non-wire” alternatives).

Developing More Renewable Energy (creating a Solar Soft Costs Initiative to reduce costs of solar projects and drive down soft costs; this should help to reduce the impact of solar tariffs established in January by the federal government).

Developing Appliance Efficiency Standards (a number of states are collaborating to advance energy efficiency standards for appliances and consumer products sold in their state as the federal government effort is stalled; this is designed to save consumers’ money and cut GhG emissions).

Building More Resilient Community Infrastructure and Protect Natural Resources (working in partnership with The Nature Conservancy and the National Council on Science and the Environment, to change the way infrastructure is designed and procured, and help protect against the threats of floods, wildfires and drought).

Increase Carbon Storage (various states are pursuing opportunity to increase carbon storage in forests, farms and ecosystems through best practices in land conservation, management and restoration, in partnerships with The Nature Conservancy, American Forests, World Resources Institute, American Farmland Trust, the Trust For Public Land, Coalition on Agricultural Greenhouse Gases, and the Doris Duke Charitable Foundation).

Deploying Clean Transportation (collaborating to accelerate deployment of zero-emissions vehicles; expanding/improving public transportation choices; other steps toward zero-emission vehicles miles traveled.

Think About The Societal Impacts

The powerful effects of all of this state-level collaboration, partnering, financial investment, changes in standards and best practice approaches, public sector purchasing practices, public sector investment (such as through state pension funds), approvals of renewable energy facilities (such as windmills and solar farms) in state and possibly with affecting neighboring states, purchase of fleet vehicles…more.

California vehicle buyers comprise at least 10% (and more) of total US car, SUV and light truck purchases. Think about the impact of vehicle emissions standards in that state and the manufacturers’ need to comply. They will not build “customized” systems in cars for just marketing in California – it’s better to comply by building in systems that meet the stricter standards on the West Coast.

US car sales in 2016 according to Statista were more than 1 million units in California (ranked #1); add in the other states you would have New York (just under 400,000 vehicles sold); Illinois (250,000); New Jersey (250,000) – reaching to about million more. How many more vehicles are sold in the other Coalition states? Millions more!

(Of course, we should acknowledge here that the states not participating yet have sizable markets — 600,000 vehicles sold in Florida and 570,000 in Texas.)

Project that kind of effect onto: local and state building codes, architectural designs, materials for home construction; planning the electric distribution system for a state or region (such as New England); appliance design and marketing in the Coalition states (same issues – do you design a refrigerator just for California and Illinois?).

There are quotes from each of the Coalition governors that might be of use to you. (Sample: Jerry Brown, California: “The Paris Agreement is a good deal for America. The President’s move to pull out was the wrong call. We are still in.”) You can see them in the news release at: https://static1.squarespace.com/static/5a4cfbfe18b27d4da21c9361/t/5b114e35575d1ff3789a8f53/1527860790022/180601_PressRelease_Alliance+Anniversary+-+final.pdf

# # #

In covering the 2017 Bonn meetings, Slate published a report by The Guardian with permission of the Climate Desk. Said writers Oliver Milman and Jonathan Watts: “Deep schisms in the United States over climate change are on show at the U.N. climate talks in Bonn, where two sharply different visions of America’s role in addressing dangerous global warming have been put forward to the world.

“Donald Trump’s decision [to pull out of the Paris Climate Agreement] has created a vacuum into which dozens of city, state and business leaders have leapt, with the aim of convincing other countries that the administration is out of kilter with the American people…”

# # #

At the US City Level

Jacob Corvidae, writing in Greenbiz, explains how with the White House intending to withdraw, cities are now in the driver’s seat leading the charge against climate change.

Cities have more than half of the world’s populations and have the political and economic power to drive change.

The C40 Cities Climate Leadership Group is the Coalition helping cities to make things happen. The C40 Climate Action Planning Framework is part of a larger effort to make meaningful progress toward carbon reduction goals and build capacity at the municipal level. Cities are expected to have a comprehensive climate action plan in place by 2020. This will include 2050 targets and required interim goals.

The cities have the Carbon-Free City Handbook to work with; this was released in Bonn in 2017 at COP 23. There are 22 specific actions that can (1) drive positive impacts and (2) create economic development. This September the Carbon-Free Regions Handbook will be available. There is information for you about all of this at: https://www.greenbiz.com/article/every-action-how-cities-are-using-new-tools-drive-climate-action

The clarion call, loud and clear: We Are Still In!  Watch the states, cities and business community for leadership on meeting climate change issues in the new norms of 2018 and beyond.