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…

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.

INSTITUTIONAL INVESTORS LAUNCH ALLIANCE FOCUSED ON HUMAN RIGHTS

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

ICCR Provides Leadership for Investor Collaboration To Advance Corporate Sector and Investor Action on Human Rights Issues

The recently-launched Investor Alliance for Human Rights provides a collective action platform to consolidate and increase institutional investor influence on key business and human rights issues.

For nearly 50 years, the Interfaith Center on Corporate Responsibility (ICCR) has been engaging with corporate managements and boards, coalescing with asset owners and managers and waging campaigns on key E, S and G issues.

ICCR has become a major influence for investors at corporate proxy voting time, and in ongoing investor-corporate engagements.

Consider:  The member institutions have AUM of US$400 billion and influence many other investors (depending on the issue in focus at the time).

ICCR has 300-plus institutional investor members, many (but not all) are faith-based organizations. A good number of member institutions are leaders in making available sustainable & responsible investment products and services. (See representative names in references at end.)

Key issues in focus for ICC members include:

  • Human Rights (key: human trafficking, forced labor, fair hiring practices)
  • Corporate Governance (board independence, CEO comp, lobbying)
  • Health (pharma pricing, global health challenges)
  • Climate Change (science-based GhG reduction targets)
  • Financial Services (risk management for financial institutions, responsible lending)
  • Food (antibiotics in food production, food waste, labor)
  • Water (access, corporate use of water and pollution)

HUMAN RIGHTS IN FOCUS FOR NEW ALLIANCE

On the last issue – Human Rights – ICCR has long been involved in various Human Rights issues back to its founding in 1971 and has been organizing the Investor Alliance for Human Rights since late-fall 2017.  Here are the essentials:

  • Investor Alliance participants will have an effective “Collective Action Platform” for convening, information sharing, and organizing collaboration on action to make the case to corporate decision-makers and public sector policymakers (and other stakeholders) on the need for urgency in addressing human rights issues.
  • The umbrella of a formal alliance will help individual participants to build partnerships and develop collaboration within their own universes of connections (such as NGOs, other investors, community-based organizations, trade groups, corporate leaders, multi-lateral organizations, and other institutions and enterprises).
  • Among the work to be done is the encouragement and support of building Human Rights criteria and methodology into asset owner and manager guidelines, investing protocols, models, and to integrate these in corporate engagements and proxy campaigns, as well as to guide portfolio management. (Buy/sell/hold decision-making.)
  • All of this will help to expand investor reach and influence and strengthen advocacy for best practices in Human Rights by both companies and investors. Leveraging of broader investor influence is key in this regard.

The Alliance will provide participants with a “rapid response” resource to assure that the “investor voices” are clearly heard in corporate board rooms and C-suites, in public sector leadership offices, and in media circles when there are threats posed to effective actions and reforms in Human Rights issues.

The Alliance is outreaching to NGOs, faith-based institutions, academics, media, labor unions, multi-lateral global institutions, trade and professional associations, corporate managements and boards, and of course to a wide range of asset owners and managers.

# # #

The key player at ICCR for the Alliance is David Schilling, a veteran staff member who is Senior Program Director – Human Rights & Resources. (email:  dschilling@iccr.org)

David joined ICCR in 1994 and has led initiatives on human rights in corporate operations in Africa, Asia and Latin America, often visiting factories and meeting with workers on the ground.

David is currently Chair, Advisory Board of the Global Social Compliance Program; member, International Advisory Network of the Business and Human Rights Resource Centre; member, RFK Center Compass Education Advisory Committee; UNICEF CSR Advisory Group; and, Coordinator (with ICCR member institutions) of the Bangladesh Investor Initiative (a global collaboration in support of the “Accord for Fire and Building Safety”.

# # #

ICCR stresses that it sees its work “through a social justice lens.”  For more than two decades members and staff have worked to eradicate human rights abuses in corporate operations and across global supply chains, such as forced child labor in cotton fields in Uzbekistan.

The organization has an Advisory Committee of Leaders in Business and Human Rights (formed in late-2016).  Members include representatives of Boston Common Asset Management; Shift; Landesa; The Alliance for a Greater New York; Oxfam America; Mercy Investment Services; International Corporate Accountability Roundtable; and Global Witness.

# # #

ICCR has a long history in Human Rights progress.  The organization came together as a committee of the mainstream Protestant denominations under the  umbrella in 1971 to organize opposition to the policies and practices of “Apartheid” in South Africa.

Over time, the U.S. corporations operating in South Africa stopped operations there.  More than 200 cities and municipalities in the United States of America adopted anti-Apartheid policies, many ending their business with companies operating in South Africa.

Protests were staged in many cities and on many college & university campuses, and U.S. and European media presented numerous news and feature presentations on the issue.

In time, the government of South Africa dismantled Apartheid and the country opened the door to broader democratic practices (the majority black population was formerly prohibited to vote).

Over the years since the Apartheid campaign, ICCR broadened its focus to wage campaigns in other societal issues, including:

  • Focus on fair and responsible lending, including sub-prime lending and payroll lending.
  • Putting climate change issues on the agenda for dialogue with corporations, including the demand for action and planning, and then greater disclosure on efforts to curb GHG emissions.
  • Encouraging investment in local communities to create opportunities in affordable housing, job development, training, and related areas.
  • Promoting greater access to medicines, including drugs for treatment of AIDS in Africa, and affordable pricing in the United States.
  • Promoting “Impact Investing” – for reasonable ROI as well as beneficial outcomes for society through investments.
  • Promoting Islamic Finance.
  • On the corporate front, requesting greater transparency around lobbying by companies to influence climate change, healthcare and financial reforms, both directly and through trade associations and other third-party organizations.
  • Opposing “virtual-only” annual corporate meetings that prevent in –person interaction for shareholders.

Proxy Campaigns – Governance in Focus:

ICCR members are very active at proxy voting time.  Among the “wins” in 2017:

  • Getting roles of (combined) Chair & CEO split – 47% support of the votes for that at Express Scripts and 43% at Johnson & Johnson; 39% at Chevron.
  • More disclosure on lobbying expenditures – 42% support at Royal Bank of Canada and 41% at First Energy; 35% at Cisco and 25% at IBM.

# # #

Notes and References:

Information on the new Alliance is at: http://iccr.org/iccr-launches-new-alliance-amplify-global-investor-influence-human-rights

ICCR’s web site is at: www.iccr.org

And at http://iccr.org/our-issues/human-rights/investor-alliance-human-rights

The Alliance initiative is supported with funding from Humanity United and Open Society Foundations.

Influence and Reach:  The ICCR member organizations include the AFSCME union fund, Walden Asset Management, Boston Common Asset Management, Oxfam, The Maryknoll Fathers and Brothers, and Maryknoll Sisters, American Baptist Churches, Mercy Investments, Christian Brothers Investment Services (CBIS), Wespath Investment Management, Everence Financial, Domini Social Investments, Church of England Ethical Investment Advisory Group, Gabelli Funds, Trillium Asset Management, Calvert Group, Clean Yield, The Nathan Cummings Foundation, and other institutional investors.

 

 

 

 

 

Are We Making Progress? Considering Recent News About “Apparel Fashion and Sustainability” — and the Investor Initiative to Help Make East Asian Factory Workers Safer and Better Paid…

by Hank Boerner – Chair, G&A Institute

In monitoring the growing abundance of news stories and commentary about “supply chain,” “globalization” or “trade” topics and issues, our editors often see the focus is on apparel, clothing, textiles, fashionand related topics & issues.

Companies in the developed economies widely source apparel footwear and related items in the developing and under-developed nations – and what happens there can quickly make news that travels around the globe.

Example:  The focus five years ago about this time was on the East Asian nation of Bangladesh and the Rana Plaza vertical factory tragedy in the capital city of Dhaka (or Dacca) that killed more than 1,000 garment industry workers.  The labels of leading western nation marketers were scattered about the debris and ashes — and those familiar brand images as well as images of the collapsed building and details of the tragedy helped to focus attention on worker conditions in the East Asian region in both North America and Europe.

The Interfaith Center on Corporate Responsibility (ICCR) investor coalition is keeping the focus on worker safety as the “Bangladesh Accord on Fire and Safety” is renewed for another three years.

ICCR institutions and their investor allies organized as “The Bangladesh Investor Initiative” (with collective AUM of US$4.5 trillion) on the 5th anniversary are urging a stronger corporate response and demonstrated commitment to local worker safety and adequate wage levels.  The link to our blog commentary on recent developments and background information for companies and investors is below.

Some good news to share is that sustainability is catching on in the fashion industry.  The uber fashion magazine from publishers Conde Nast – Vogue, with more than one million readers — just published a story about the embrace of “eco-friendly” fashion, spotlighting “the best designers of a new generation are stitching sustainability into everything they do…”

“While sustainability has long been considered a “byword for hemp-heavy bohemia,” writer Olivia Singer explains, “a new generation of designers is building brands with a more conscious approach to fashion at their core.”

Fabrics are sourced through collectives in India empowering female weavers as just one example.  In the article designers explain why sustainability is important to their brands (Richard Malone, Le Kilt, Elliss, E.L.V. Denim, Alyx, Marine Serre, Richard Quinn are featured interviews).

A number of creative approaches being adopted by the designers is explained — just think about the contribution to global sustainability of turning recycled plastics and viscose into yarn and fringing, using organic cotton as well as recycled polyester for “new” fashions, creating ECONYL from fishnets to make swimwear, and using recycled cotton and plastics as part of the effort of making sustainability a “pillar of luxury”.

The encouraging details are in our Top Story this week – a cautionary note:  some of the fashion photos are edgy and might offend.

Top Stories

The Young Designers Pioneering A Sustainable Fashion Revolution
(Thursday – April 26, 2018) Source: Vogue – While eco-friendly fashion has never had particularly glamorous connotations, the best designers of a new generation are stitching sustainability into everything they do.

And of interest, our own related content on G&A’s Sustainability Update Blog:  The Bangladesh Garment Factory Workers Tragedy and Investor and Corporate Response Five Years On…

As the Global Demand for Palm Oil Rises, There is More Focus on the Growing Areas – and on Industry Behaviors Such as Deforestation

By Hank Boerner – Chair, G&A Institute

Palm Oil is one of the world’s most popular vegetable cooking oils and in western nations is widely used as prepared food ingredients. Food industry interests promote the benefits: lower cholesterol levels, less heart disease, more Vitamins A and E, and much more, derived from the rich beta-carotene from the pulp of oil palms.

Palm oil also shows up in our detergents, shampoo, cosmetics, pizza slices, cookies, margarine — and even in biofuels. Palm oil is especially used for cooking in Africa, Asia and parts of South America and is growing in favor in other regions such as in North America.

The palm oil plantations are located in such regions of the world as Southeast Asia – and there the industry is linked to the downside of the beneficial consumer product: deforestation, degrading of flora and fauna habitat, abuses of indigenous peoples, and negative impact on climate change as old growth land and tropical forest is cleared to make way for oil palm plantations.

Stakeholder reaction resulted in the creation of “reliable No Deforestation, No Peat, No Exploitation” policies – the “NDPE”.

These were developed for certification (to buyers) by the Roundtable on Sustainable Palm Oil (RSPO) and adopted in 2013 and 2014 by numerous Southeast Asian palm oil traders and refiners.

The policies (spelled out as best practices) are designed to prevent clearing of forests and peat lands for new palm oil plantations. There are 29 company groups, reports Chain Reaction Research, that have refining capabilities and have adopted NDPE policies. (Climate Reaction Research is a joint effort between Climate Advisers, Profundo and Aidenvironment.)

“Un-sustainable” palm oil practices are an issue for investors, customers (buying the oil), companies with sustainable practices, and countries in which palm oil is grown and harvested.

According to a new financial risk report from Chain Reaction Research, major markets with customers that accept “unsustainable palm oil” include India, China, Pakistan and Indonesia.

One of the major centers of production is the huge – more than 3,000-miles wide — Pacific Basin archipelago nation of Indonesia (once known as the Dutch East Indies). Almost half of the world’s palm oil refineries are in Indonesia and Malaysia.

The Indonesian government (the Ministry of Agriculture) reacted to the NDPE policies and proposed changes to its own certification program – known as the “Indonesian Sustainable Palm Oil Standard” (ISPO) – that would appear to be presenting companies with pressure to adopt one or the other of the certifications.  (The ISPO policy focus is on reducing Greenhouse Gas Emissions and addressing environmental issues.)

For Indonesia, palm oil is a strategic product that helps the government to meet job creation and export market goals. “Small holders” account for more than 40% of production in the country.

“Evidence suggests that the need for edible oil and energy will continue as populations grow, “Darmin Nasution, Coordinating Minister for Economic Affairs for Indonesia points out. “Land that can be utilized will decrease, so the question is how to meet those needs in the limited land area. Increasing productivity will be the key.”

Companies using the existing Indonesian ISPO certification were accused of human rights abuses and “land grabs” and so in January the government developed the new certification, which opponents claim weakens protection (the draft changes for the regulation removes independent monitoring and replaces “protection” with “management” for natural ecosystems).

Stranded Asset Risks

CDP estimates that global companies in the industry had almost US$1 trillion in annual revenues at risk from deforestation-related commodities. As the developed nation buyers looked carefully at their global supply chains and sources, “stranded assets” developed; that is, land on which palm oil cannot be developed because of buyers’ NPDE procurement policies. Indonesia and Malaysia have some of the world’s largest suppliers.

Western Corporate Reaction

Early in 2018 PepsiCo announced that it and its J/V partner Indofood suspended purchasing of palm oil from IndoAgri because PepsiCo — a very prominent global brand marketer — is concerned about allegations about deforestation and human rights were not being met.

Institutional Investors are busily identifying companies that source Crude Palm Oil (“CPO”) without paying attention to sustainability requirements, putting pressure on both sellers and buyers and perhaps pushing the smaller players to the sidelines. European buyers import CPO in large quantities to be used in biofuels.

The bold corporate names in western societies show up in rosters of company groups with refining capacity and NDPE policies, including Bunge, Cargill, Louis Dreyfus Company, Unilever, and Wilmar International. These are large peer companies in the producing countries (like IOI Group, Daabon, Golden Agri-Resources) are aiming for “zero deforestation” in their NDPE policies.

Other companies that source palm oil include Kellogg’s, Procter & Gamble, Mars, General Mills, Mondelez International, and other prominent brand name markets.

Your can check out the Chain Reaction Research group paper – “Unsustainable Palm Oil Faces Increasing Market Access Risks – NDPE Sourcing Policies Cover 74% of Southeast Asia’s Refining Capacity” at: http://chainreactionresearch.com/2017/11/01/report-unsustainable-palm-oil-faces-increasing-market-access-risks-ndpe-sourcing-policies

What About Exercise of National Sovereignty?

This situation raises interesting questions for developed nation brand marketers. If the government of Indonesia presses forward with the country’s own standards, should the purchaser in a developed country ignore or embrace the country standard? Instead of the Roundtable on Sustainable Palm Oil (RSPO) standard? What about “sovereign rights,” as in the ability for a sovereign nation to establish its own policies and standards governing the products developed within its borders?

As industry groups create their own standards and invite industry participants to embrace these (such as for product certification), corporations may find themselves bumping up against “nationalistic” guidelines designed to benefit the internal constituencies rather than “global norms” imposed from outside the country’s borders.

# # #

Responding to the streams of negative news coming out of Indonesia, Chain Reaction Research on April 26 reported that Citigroup has cancelled loans to Indofood Agri Resources and its subsidiaries. Citigroup will exit its overall relationship with Indofood other than specific financial relationships that are not related to the palm oil business, says the research organization.

The research firm said that labor and environmental violations by Indofood and other companies related to Anthoni Salim and his family have been documented. The web of companies: Salim and family own 44% of First Pacific, which owns 74% of Indofood.

In April a report commissioned by Rainforest Action Network Foundation Norway and SumofUS and prepared by Chain Reaction Research alleged deforestation of almost 10,000 hectares of peatland by PT Duta Rendra – which is majority owned, the report says, by Salim and PT Sawit Khatulistiwa Lestan, which is associated by Salim.

Notes:

As we prepared this commentary, the Danish Institute for Human Rights and The Forest Trust carried out a Labour Rights Assessment of Nestle’s and Golden Agri-Resources palm oil supply chain in Indonesia.  Nestle’s and GAR and going to share their own action plans in response to the findings and recommendations.

For The Roundtable on Sustainable Palm Oil information: https://www.rspo.org/

There is information from a recent conference in Jakarta for you at: https://www.scidev.net/asia-pacific/forestry/news/science-can-keep-palm-oil-industry-sustainable.html

The Indonesian Government ISPO information is at: http://www.ispo-org.or.id/index.php?lang=en

General Mills Statement on Responsible Palm Oil Sourcing is at: https://www.generalmills.com/en/News/Issues/palm-oil-statement

Rainforest Action Network information is at: https://www.ran.org/palm_oil?gclid=EAIaIQobChMIuJyBg97i2gIVE1mGCh3A-QMYEAAYASAAEgKZePD_BwE#

The Union of Concerned Scientists information is at: https://www.ucsusa.org/global-warming/stop-deforestation/drivers-of-deforestation-2016-palm-oil#.WudvOKjwbAw

The Bangladesh Garment Factory Workers Tragedy — and Investor and Corporate Response Five Years On

By Hank Boerner – Chair, G&A Institute

We are five years on from the Rana Plaza “Savar” five-story factory building collapse and fire that killed more than 1,000 garment workers in Dhaka (Dacca), the crowded capital city of Bangladesh. (The accident was on April 24, 2013). In the ashes and debris there were the labels of prominent developed nations’ apparel marketers. Reputations were at stake — “Reforms” discussions were immediately underway in Europe and North America.

The Europeans moved on with the “Bangladesh Accord on Fire and Safety” while in North America brand marketers were moving on “The Alliance on Bangladesh Safety.”

Where are we today?

The Interfaith Center on Corporate Responsibility (ICCR) is keeping the accident and aftermath in the focus of the investment community and stakeholders. Yesterday ICCR (a coalition of 300-plus institutional members managing $400 billion AUM) and the group of allied investors issued a statement that helps to explain where we are.

About The Accord

Right after the building collapse, the Bangladesh Accord on Fire and Building Safety was created as a model for collective action by brand marketers and retailers that source in Bangladesh.

The Accord is now being extended (as the five-year deadline is reached in May) for another three years to complete the remediation of the 1,600 factories and companies that have not signed on (yet) are being invited by the investor coalition to become signatories and to implement the reforms spelled out in the Accord.

The Accord, the investors point out, is still serving as a model that can be adopted and applied to other at-risk countries and sectors.     

The Bangladesh Investor Initiative – led by ICCR – was a catalyst that brought together 250 institutional investors with US$4.5 trillion in AUM in May 2013 to urge a stronger corporate response to the Rana Plaza tragedy, including urging companies to sign on to the Accord.

The coalition invited companies to commit to strengthening local worker trade unions to ensure a “living wage” for all workers, and to engage with the Bangladesh government.

About the Accord:

  • Corporate signatories agree that global and local trade unions and NGOs could be invited to inspect the country’s apparel factories and implement reforms to protect workers.
  • Companies were asked for transparencies in publicly disclosing their suppliers – including those located in the nation of Bangladesh.
  • Worker grievance mechanisms and effective remedies (including compensation) should be put in place for all workers and their families.
  • The investor coalition argued that supply chain transparency is critical to safeguarding workers and employer responsibility – including information on sub-contractors.
  • Note that the Accord is legally-binding for signatories.

Making the Case

Lauren Compere, Managing Director of Boston Common Asset Management makes the case for companies: “Stakeholders, including investors, rely on transparency as a tool for evaluating corporate performance on a range of social, environmental and corporate governance issues. The Accord has been very transparent in requiring disclosure of each of the 1,600 companies it covers, which helps investors track progress. This is a ‘best practice’ that all companies need to implement, beginning with Tier One suppliers, then throughout their supply chain.”

Progress Report – 5 Years On

To date, 220 brands and retailers have signed on to the original Accord. Remediation plans have made 2.5 million workers in “Accord factories” have been made “meaningfully safer”. A steering committee made up of an equal number of brand and union representatives and a neutral chair from the International Labor Organization govern the Accord.

The Accord provided for in-depth health and safety training to personnel in 846 factories, reaching 1.9 million workers. A grievance process is in place; to date, there have been 183 worker complaints investigated and resolved.

Detailed information is required for each factory.

The Rana Plaza Donors Trust Fund has been established to compensate workers injured in the collapse and families of workers who were killed (note that Bangladesh has no national employment injury system). $30 million has been raised to date; companies sourcing garment/apparel work in the country were asked to contribute; 30 companies did so, along with several union funds and foundations. The ILO is the trustee and oversees distributions.

The investor coalition is pleased with the progress made to date – but stresses that there is much work still be done (therefore the 3-year extension is necessary). “The job of mediating all of the issue is far from done and we will continue to urge those companies that have not signed on to the 2018 Accord and its three-year extension to do so.”

The New Elements to the Accord

The 2018 Transition Accord has gathered140 signatory companies to date, with 1,332 factories covered. The new elements include:

  • Safety Committee & Safety Training at all covered factories;
  • Training and Complaints Protocol on Freedom of Association;
  • Severance payments for affected workers in factory closures and relocations.
  • Voluntary expansion of the scope to include home textiles; fabric and knit accessories;
  • Transition of Accord functions to a national regulatory body.

We’ll bring you updates as the Transition to the new Accord continues.

About the Nation of Bangladesh

Located in Southeast Asia, the People’s Republic of Bangladesh is the world’s 8th most populous country, according to Wikipedia (163 million estimated). It was once part of “British India” until East Bengal became part of the Dominion of Pakistan, was re-named East Pakistan and then became independent in the early -1970s. It is characterized as a “developing country,” one of the poorest, and trades with the USA, EU, China, Japan, India, and other nations. Per capita income was estimated at US$1,190 in 2014.

The largest industries are textiles and ready-made garments; leather-goods (footwear is the second largest in exports. Bangladesh is the second largest exporter of clothes in the world.

# # #

Notes / Information:

There’s more information for you on the ICCR web site: www.iccr.org

Information about the Accord: http://bangladeshaccord.org/

The Accord Update for April is at: http://bangladeshaccord.org/wp-content/uploads/ACCORD_FACTSHEET_Apr2018.pdf

There’s information for you in G&A Institute’s “To the Point!” management briefing platform:

https://ga-institute.com/to-the-point/a-big-year-2018-for-developments-in-corporate-sustainability-sustainable-investing-the-two-halves-of-the-great-whole-of-the-new-norms-of-capitalism/

CNBC in commenting on the five year anniversary (on April 24) noted the factories still pose a life-threatening risk, with 3,000 of 7,000 factories endangering the lives of low-paid garment workers (according to a New York University Centre for Business and Human Rights Study).

The story is at: https://www.cnbc.com/2018/04/24/bangladesh-factories-still-pose-life-threatening-risks-five-years-on-from-rana-plaza-disaster.html

The NYU report authored by Paul M. Barrett, Dorothee Baumann-Pauly and April Gu is at: https://static1.squarespace.com/static/547df270e4b0ba184dfc490e/t/5ac9514eaa4a998f3f30ae13/1523143088805/NYU+Bangladesh+Rana+Plaza+Report.pdf

Human Rights Watch also weighed in with “Remember Rana Plaza: https://www.hrw.org/news/2018/04/24/remember-rana-plaza

The Media – And Sustainability & CR Thought Leadership, For Both Topic-Focused and Mainstream Media Coverage

by Hank Boerner – Chair, G&A Institute

The “media” that we choose to get our news, commentary, research results, even crossword puzzles, movie reviews, the latest scientific papers and maybe information about what our friends are up to (such as “social media”) are usually self-selected.  

We tune in to what we want to read or watch or listen to…for information / education / entertainment…and it also helps to define us in many ways.

So here at G&A Institute as we broadly monitor for content related to both our day-to-day and long-term focus areas (the list of topics and issues is long), when we see these things pop up in “not-the-usual places,” we are cheered.

This weekend, for example, we picked up on the following, which were encouraging in that senior management publications are read beyond the folks involved in sustainable investing and corporate sustainability or ESG issues and topics.

In Focus:   MIT Sloan Management Review

This is the publication of the prestigious Massachusetts Institute of Technology’s MIT Sloan School of Management.  “Share Your Long-Term Thinking” was one feature article. Companies need to be more forthcoming about their strategies for long-term value creation when they communicate with investors — especially about ESG issues, write authors Tim Youmans and Brian Tomlinson.

Their observation is that over the past five years, CEOs have faced mounting pressure to produce short-term profits. CEOs do think about the long-term, have long-term plans (detailed and extensive) and these typically are closely held.  Result: corporate strategy and practice are not captured in investor communications.

They then offer six reasons why long-term plans should be disclose and how to do that.  One of these is to help investors understand ESG issues through the eyes of management — because a majority of investors see ESG factors as financially material and expect sound management of material ESG factors to deliver better performance over the long-term. 

Tim Youmans is engagement director for Hermes Equity Ownership Services and Brian Tomlinson is research director for the Strategic Investor Initiative at CECP.

They conclude for the magazine’s audience (aimed at corporate executives and senior managements in the main): “The long-term plan is a new tool in the regular sequence of periodic corporate-shareholder communications and represents an unprecedented opportunity for leading companies and investor together to drive sustainable value creation and help to clarify the role of the corporation in a sustainable society.”

That is not all for the MIT Sloan Management Review audience in the Spring 2008 issue.

“Why Companies Should Report Financial Risks From Climate Change” is another feature — this from Robert Eccles and Michael Krzus.  They  focused on the Financial Stability Board’s Task Force on Climate-related Disclosures [recommendations].

“Investors and the rest of the world is watching to see how companies will respond to the TFCD recommendations” — the ask here is that company managements will expand their disclosure to report on the risks and opportunities inherent in climate change in such documents as the 10-k.

Boston Common Asset Management LLC and ShareAction organized a campaign with institutions representing US$1.5 trillion in AUM participating to pressure financial institutions (especially banks) to implement the recommendations.

Companies should follow the recommendations, authors Eccles and Krzus argue, because this could lead to evolving better strategies to adapt to climate change — and be able to explain these strategic moves to the their investors.

They focus on the oil and gas industry, looking at disclosures in 2016 by 15 of the largest industry firms listed on the NYSE.  A few have made good progress in adhering to the TCFD recommendations (so there is not a “blank slate”); there is work to be done by all of the companies in enhancing their disclosures to meet the four top recommendations (in governance, strategy, risk management and metrics and targets areas).

Their article is an excellent summation of the challenges and opportunities presented for such companies as BP, Chevron, ExxonMobil, Sinopec, Statoil, Total, and others in oil & gas.

Bob Eccles is a well-known expert in corporate sustainability and sustainable investing and is visiting professor at Said Business School at the University of Oxford. Mike Krzus is an independent consultant and researcher and was a Fellow of G&A Institute.

Wait, there’s more!

The magazine’s columnists had important things to say as well.

Kimberly Whitler and Deborah Henretta penned “Why the Influence of Women on Boards Still Lags,” applauding the rise of the number of women on boards and offering two important criticisms — the growth rate is slowing and boards do that do have female members often limit their influence.

Although there are measurable positive results of female board inclusion — they cite Return on Equity averaging 53% higher in the top quartile than in the bottom — women still are not making more rapid inroads with fewer reaching the most influential board leadership positions, even with more women on boards than 10 years ago.

The authors set out ways for making more progress in board rooms.  And they advise: “For real, lasting change that wins companies the full benefits of gender-diverse decision-making, boards need to look beyond inclusion — and toward influence.”

Kimberly Whitler is assistant professor of business adminstration at the University of Virginia’s Darden School of Business; Deborah Henretta is an independent board director on the boards of Dow Corning, Meritage Homes Corp, NiScource Inc and Staples (she was a Proctor & Gamble executive).

There is much more for executives and board members in the issue, which has the overall theme of: “In Search of Strategic Agility – discover a better way to turn strategy into results.”

The content we outlined here is powerful stuff (our own technical term) to crank into corporate strategy-setting, and savvy execs are doing just that, as we see here at G&A as we pour through the more than 1,500 corporate reports we analyze each year with titles such as Corporate Sustainability, Corporate Responsibility, Corporate Citizenship, Corporate Environmental Sustainability, and more.

And so it is very encouraging when we wander beyond the beaten path of reading the reliable staple of sustainability-oriented and CSR-oriented media to see what the senior management thought leadership media are doing!

We recommend that you read through the Spring 2018 Strategy magazine from MIT Sloan.  Link: https://sloanreview.mit.edu/

Broadening Activism Among Institutional Investor Classes on ESG Issues – Here to Stay, Says Proxy Advisor CEO

“Operating under the radar” — that is, various categories of institutional investors getting active in the “investor activist” game?  Bruce Goldfarb, CEO of Okapi Partners, describes a sea change that he sees that is underway, the trend in how large institutions are approaching in the [investor] push for corporate change.  The lens is the annual corporate proxy season and the many campaigns therein, including the 2017 campaign.  Okapi is one of the influential proxy advisors for both investor and companies, working on some 48 campaigns during 2017.

What did the firm’s leader see as patterns?  Well, for starters, large mutual fund advisories and ETF complexes (like Vanguard, Fidelity, BlackRock, State Street) — these organizations with many trillions’ of dollars in corporate holdings in their portfolios, “…have become increasingly intent on holding public company boards and management teams accountable in higher ESG standards,” CEO Goldfarb notes in our Top Story (published on the digital Forbes Investing platform).

As many of us well know, the first iteration of ESG was about the “G” — for several decades, the focus was on corporate governance issues.  (Such as: investors pushing for separation of Chair and CEO, the often described example of a popular campaign in the G space).  Over time, the emphasis on environmental and social issues (“E” and “S”) broadened the approach to the familiar ESG measurements because the E and S issues are tied to share performance and confidence (or lack of) in management.

The CEO in the interview points out that a climate change proposal at ExxonMobil recently was passed by a wide margin (investors supported the demand that the company publish an annual assessment of the impact of global warming policies) while a decade ago a push by investors in proxy campaigning to separate chair and CEO positions and a few environmental proposals failed by a very large margin.  Things are a-changin’ in the proxy arena.

In 2017, there have been (so far) 430 resolutions filed that address “S” and “E” issues, compared to 370 a year earlier.  Investors, says CEO Goldfarb, see the connection between ESG policies and stock performance more clearly now.

In our conversations with corporate managers (at all size enterprises) it is clear that the managers want to press the Investing Case upward to their bosses in the C-suite and board room.  Why should we make the investment in a sustainability effort, the question often goes, and the answer is that among other things, corporate performance and a scorecard of sorts on top management has a proxy, too — that is, the ESG performance of the enterprise!

You’ll find more from perspectives shared by the Okapi Partners CEO in the Forbes interview by staffer Antoine Gara in our Top Story this week.

Top Stories This Week…

An Insider Explains Why Wall Street’s Big Money Focus On Sustainability Is Here To Stay
(Friday – July 28, 2017)
Source: Forbes – When a hedge fund launches a major activist campaign calling for changes at companies here and in overseas markets it’s real news.

Meet Hank Boerner, Chairman & Co-Founder, Governance & Accountability Institute @ #Intro2ESG Training

Presenting at Introduction to ESG, Sustainable & Impact Investment OneDay Training
The How & Why of Applying ESG to Corporate Valuations
Hosted by Zicklin School of Business at Baruch College/CUNY on June 15th

Introduction:  For professionals in the capital markets, and in the corporate sector, G&A Institute and Global Change Associates are teamed to present a one-day professional training program, hosted by Zicklin School of Business at Baruch College/CUNY, in midtown Manhattan.  This is an excellent introduction to the application of ESG factors to investment making decisions and corporate valuations.  Find out more at https://intro2esg.eventbrite.com

ESG = the corporate environmental, social or societal and corporate governance factors to be evaluated by the financial analyst, asset owner, asset manager, and others in the capital markets in looking beyond the financial in selecting public companies for “buy/sell/hold” portfolio management decisions. (This is also referred to as “sustainable investing,” “impact investing,” and similar titles by practitioners.)

The outstanding faculty presenting during the one-day course will include experts in ESG / sustainable / impact investing, covering topics such as best practices; data sources; analytical tools; research resources; methodologies; why ESG matters; and realized outcomes using these approaches to analysis and investment management.

MEET ONE OF YOUR COURSE LEADERS
Hank Boerner
Chairman & Co-Founder, Governance & Accountability Institute, Inc.
Topic:  Introduction to Corporate ESG Strategies, Performance, Actions — What is Corporate ESG & Why It Really Matters to Shareowners

* * * * * * * *

CAREER BACKGROUND: HANK BOERNER
Henry (Hank) Boerner is Chairman and Chief Strategist of Governance & Accountability Institute, Inc., a New York-based (for-profit) research, knowledge management, advisory and strategies service provider.  The company serves clients in the corporate sector, in capital markets organizations and organizations in the not-for-profit sector.

Hank leads the Institute team’s client engagements dealing with client engagement in such areas as sustainability, corporate responsibility, corporate governance, issue management, crisis management, disclosure, and strategic corporate communications.

During his career he has been a business & financial journalist, corporate manager, corporate strategist, issue management consultant, and senior level strategy advisor. For 30 years he has provided corporate and investment community clients with issues management strategies, advice and programs.

Hank’s current work is focused on identifying and addressing ESG issues (corporate environmental, societal, governance performance factors) and assisting corporate managements in developing their ESG strategies, organizing teams and initiatives, coaching executives, and facilitating disclosure and structured reporting on the progress of the company’s sustainability journey.

Hank was a managing partner in the Rowan & Blewitt management consulting organization for two decades before co-founding the Institute.  (The Rowan & Blewitt issue and crisis management practice served Fortune 100 clients,  and was acquired by Interpublic Group of Companies – NYSE:IPG.)

Hank is active in key professional organizations including: the US Forum for Sustainable & Responsible Investing (US SIF); its analyst network, SIRAN; the National Association of Corporate Directors (NACD); New York Society of Securities Analysts (NYSSA – he is chair of the Sustainable Investing Committee); and,  the National Investor Relations Institute (NIRI).  He was recognized by the NACD in the prestigious Directorship 100 ranking, in 2011 and 2012 as one of “people to watch in corporate governance affairs.”

He serves on the Global Advisory Council of Cornerstone Capital Group, a New York-based financial services firm that applies sustainable finance across the capital markets (investment consulting, investment banking).  Principal:  Erika Karp, former head of global research, UBS.  Information at  http://cornerstonecapinc.com/bios/hank-boerner/

Hank has been a contributing editor for Corporate Finance Review ( a journal for CFOs and corporate finance managers) published by Thomson Reuters) from 2002 to 2015, commenting on trends in corporate governance, sustainability and related issues.  He now provides this commentary to T-R’s “Accounting & Compliance Alert” service. He has authored commentaries for Financial Times, Bloomberg BNA, and numerous print and digital platforms.  He is co-author of “Strategic Governance – Enabling Financial, Environmental & Social Sustainability,” published in 2010.  His current boo — “Trends Emerging — a Look Head Ahead of the Curve in ESG / Sustainability / CR / SRI”  will be published in July 2016.

Earlier in his career, Hank was a board-elected officer and head of communications of the New York Stock Exchange, managing NYSE communications and advising listed companies on timely disclosure, transparency and disclosure and reporting. At the start of his corporate career, he was American Airlines’ national corporate responsibility officer; later, he was a senior communications officer of the NY Metropolitan Transportation Authority.

He served as staff advisor in New York Governor Nelson A. Rockefeller’s administration, and later, provided counsel pro bono to Governor Mario M. Cuomo and Attorney General and then Governor Eliot Spitzer. Presently, he is informal advisor to New York State Comptroller Thomas DiNapoli, sole trustee of the New York State Common Fund, the retirement system for public employees throughout the state.

For more information about the course and how to register, visit: https://intro2esg.eventbrite.com

Meet Peter Fusaro – Chairman – Global Change Associates @ #Intro2ESG Training

Presenting at Introduction to ESG, Sustainable & Impact Investment OneDay Training
The How & Why of Applying ESG to Corporate Valuations
Hosted by Zicklin School of Business at Baruch College/CUNY on June 15th

Introduction:  For professionals in the capital markets, and in the corporate sector, G&A Institute and Global Change Associates are teamed to present a one-day professional training program, hosted by Zicklin School of Business at Baruch College/CUNY, in midtown Manhattan.  This is an excellent introduction to the application of ESG factors to investment making decisions and corporate valuations.  Find out more at https://intro2esg.eventbrite.com

ESG = the corporate environmental, social or societal and corporate governance factors to be evaluated by the financial analyst, asset owner, asset manager, and others in the capital markets in looking beyond the financial in selecting public companies for “buy/sell/hold” portfolio management decisions. (This is also referred to as “sustainable investing,” “impact investing,” and similar titles by practitioners.)

The outstanding faculty presenting during the one-day course will include experts in ESG / sustainable / impact investing, covering topics such as best practices; data sources; analytical tools; research resources; methodologies; why ESG matters; and realized outcomes using these approaches to analysis and investment management.

MEET ONE OF YOUR COURSE LEADERS
Peter Fusaro
Chairman, Global Change Associates
Topic:  Case Study of Corporate Malfeasance: The VW Emissions Scandal

A conversation with Peter:

Q: How is your day-to-day work related to the Intro to ESG, Sustainable & Impact Investment Certificate Program to be presented at Baruch?
[PF]  I work broadly in the area of corporate finance for sustainability for private companies in the area of clean energy, clean water and sustainable agriculture. Most of my work centers in clean energy arena for both electric power generation and transportation. 

Today, I work on solar energy finance as well as energy storage with advanced batteries and fuel cells. I work with a  hydrogen manufacturing company for both energy storage and transportation of fuel cell vehicles. In the past I have worked on taking the lead out of gasoline with the US EPA and was a consultant to the Toyota Prius development team. 

Because of this expertise, I am intimately aware of the VW emissions scandal and its ramifications in terms of corporate governance for that company.

Q:  What can attendees expect to learn from your session?
[PF] Course participants will learn that the VW emissions scandal is not a one-off crisis event. That Volkswagen has committed many transgressions in the past 25 years and tried to cover them up. I will go through the specifics of how they tried to get away with the fraudulent use of software to hide defects in their diesel fuel technology of their engines.  So far, this has lead to over US$15 billion in fines and great damage to their corporate reputation. It is a text book example of corporate malfeasance.

Q:  What advice do you have or opportunity that you see for attendees who complete the Certificate Program?
[PF] Attendees will learn not only the basics of ESG but also come away with some ideas on what to look for investment in public companies. The rigorous ESG screens are still evolving but with the expertise of the instructors for this program, course participants will learn what analysis is needed to vet both investment and sustainability parameters within companies. Moreover, they will learn what red flags to look for in any due diligence process.

* * * * * * * *

CAREER BACKGROUND: PETER FUSARO
Peter C. Fusaro is a best-selling author, keynote speaker and thought leader on emerging energy and environmental financial markets.  He’s Chairman of Global Change Associates, a financial services advisory in New York City, and author of “What Went Wrong at Enron,” as well as 15 other books on energy and the environmental financial markets.

Peter has been on the forefront of energy and environmental change for more than 40 years, his work focusing on how to use energy more efficiently and in an environmentally-benign manner.  His current focus is on environmental financial market acceleration toward the goal of the low-carbon economy through sustainable finance in renewable energy, clean technology and resource efficiency.  Peter founded and runs the Wall Street Green Summit — now in its 15th year. Information at: www.wsgts.com.

Peter served at the US Department of Energy in the 1970s where he worked on removing lead in gasoline with the U.S. Environmental Protection Agency (EPA), as well as co-writing an Environmental Impact Statement on LNG (liquefied natural gas) safety and siting.

He was a senior policy analyst in the New York City Mayor Office of Energy & Telecommunications, where he created the first energy efficiency programs for electricity and natural gas with Con Edison (the electric utility) and Brooklyn Union Gas in the mid-1980s.   In the early-1990s he established his consultancy and implemented energy efficiency and conservation programs for the Port Authority of New York & New Jersey, including lighting retrofits, mechanical systems and energy savings.

Peter worked with the Toyota Prius development team on electric power issues in the mid 1990s. He has run a cleantech venture capital fund as well as worked with hedge funds on portfolio construction. Today, he works with several clean energy technologies and fund managers in clean energy project finance.

Peter was graduated with an M.A. in International Relations from Tufts University and a B.A. from Carnegie-Mellon University.  Peter was an adjunct professor at Columbia University, where he taught a popular renewable energy project development and finance course each fall semester to second year graduate students.  He is on the advisory board of Bard College’s MBA in Sustainability program as well as having served for eight years on the External Advisory Board of the ERB Institute for Global Sustainable Enterprise, Ross School of Business, University of Michigan.

For more information about the course and how to register, visit: https://intro2esg.eventbrite.com