by Hank Boerner – Chairman, G&A Institute
Here we are in the year 2017 — and I see momentum coming into this new calendar year for continuing many of the positive trends for corporate sustainability / citizenship / responsibility managers, and sustainable investment professionals that I explored and commented on in 2016.
I set out more than 50 of these trends in my collection of commentaries — “Trends Converging! — The Convergence of Important CSR – ESG – SRI – Sustainability Trends in the Year 2016 and Beyond.”
In my first post of 2017 I explained some of these trends and provided background on the many experts and thought leaders that shared their perspectives with us on key topics and issues. Going forward, I am going to update the trends material with current news and developments and shared perspectives from third parties.
I see this as continuing momentum for the positive trends — even in the face of hostile action that is anticipated in our nation’s capital. So I am positioning my comments as “Momentum 2017 – Sustainability Forward!” for corporate sustainability and sustainable investing professionals. And for NGOs and other stakeholders.
The 2016 trends are available for you in total on our G&A Institute web site (under Research menu). The updates going forward will include the original materials that I saw as being forward-moving and in many instances helping to make “the business case,” “the investing case,” and so on.
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Here’s the first update for 2017 and the original perspectives shared in 2016.
January 2017 – Momentum – Forward!
Thousands of American Roman Catholics have petitioned President-elect Donald Trump to urge him to “take swift and meaningful action on climate change,” including honoring commitments and pledges made by President Barack Obama.
The Catholic Climate Covenant petition asked the incoming president to “demonstrate bold leadership” on climate on three fronts:
- Keep the U.S. commitment to the Paris Agreement and go forward on the U.S. pledge to cut GhG emissions to 26% / 28% of the 2005 levels by year 2025.
- Keep the U.S. pledge of $3 billion to the Green Climate Fund to help developing countries address climate change (mitigation, adjustments), including the development of sustainable energy resources.
- Go forward with the Federal government’s Clean Energy Plan, and the U.S. EPA’s rules designed to help reduce carbon emissions from coal- and gas-fired power plants. (Note that some states are implementing their state-level plan as mandated in the Obama Administration approach. A Federal court put the plan on ice.)
The Catholic coalition cited Pope Francis’s Laudato Si (encyclical) — On Care for Our Common Home – to remind the President-elect and his minions of the importance to the Roman Catholic Church worldwide of climate change and environmental and social issues to be addressed.
The U.S. Conference of Catholic Bishops (USCCB) strongly supports a national carbon pollution standard — as one way to move forward to implement the Paris (COP 21) Agreement of 2016.
The Catholic Climate Covenant is gathering signatures for its appeal to the new President and communicating its appeal on [his] favorite channels – social media!
The petition notes that before Pope Francis came to the USA in September 2015, a Public Religion Research Institute poll found three-out-of-four Catholics believed that the U.S. government should be more to address climate change. When white-only respondents were tallied, the percentage rose to 86%.
More recently (May 2016) a Center for Applied Research in the Apostolate at Georgetown University showed the amount held steady, with 73% of American Catholics in favor of society taking steps to combat climate change.
The Covenant petition has been endorsed by the Global Catholic Climate Movement; the Leadership Conference of Women Religious; the Conference of Major Superiors of Men; the Sisters of Mercy; and the Franciscan Action Network.
And in January, the President-elect can expect to see more than 100 prayer vigils stages across the country and during his first 100 days in office. That way, there will be clear demonstration against his climate-skeptic appointments and for an environmentally-sustainable future.
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Here is the foundational perspective offered up in my trend-watching efforts in 2016: Chapter # 44. Pope Paul and Perspectives and Actions the Roman Catholic Church Worldwide
There are an estimated 1 billion Catholics worldwide, and a huge infrastructure of the RC Church that can implement policies and practices. Worldwide, the Bishops of the Church among other things are traditional heads of local dioceses — there are 177 in the U.S.A. alone. There are “ecclesiastical provinces” organized in metropolitan area; these are usually headed by an archbishop (New York, Washington DC, Baltimore, etc.).
The Roman Catholic Church as a collective institution is one of the largest owners and holders of assets in the world, including properties, solid gold, bonds, cash, and equity investments, pension systems of various orders, Catholic charities, and healthcare systems.
Imagine the power that such an institution can bring to bear on challenges, in the world, in the United States and other large nations — especially when it focuses on a societal issue
The Bishop of Rome, Pope Francis, in May 2015, issued “Laudato Si,” the Encyclical Letter of the Holy Father, “On Care of Our Common Home.” Among other things to explain his position, he addressed a joint session of the U.S. Congress in September 2015. (Note that in the audience, 31% of Members are Catholic, as well as six of the nine Supreme Court Justices.) The speech received 37 standing ovations.
So what are the Pope’s concerns, expressed in the House of the People? Consider these:
• Climate change;
• addressing common needs;
• addressing risk to our common home (the Earth);
• addressing income inequality (especially in less-developed nations);
• the responsibility of richer nations; advancing justice and peace;
• the dignity of human life;
• job creation;
• business is a “noble vocation”;
• environmental challenges.
“We should have a culture of care,'” Pope Francis said, and “now is the time for action” to protect our planet.
The Pope’s 74-page letter “to the world” and especially to the Catholic faithful in all lands, addressed topics that are front-of-mind for sustainability professionals:
• Pollution and climate change are a threat to the world.
• Part of the cause is the residue of industrialization.
• Part of the cause is our throwaway society.
• The climate is a common good, belonging to all.
• Warming has effects on the carbon cycle. This affects drinking water, agriculture, energy and other activities.
• Climate change is a global problem, affecting environmental, social, economic, political, and distribution of goods.
• There are critical issues in water, biodiversity, global inequality.
Pope Francis called for a vision of “integral ecology,” one that seriously considers environmental, social and economic factors.
The Holy Father set out suggestions for “approach and action,” with dozens of specific steps that could be taken to address challenges and bring about integral ecology. It is in these specificities that action will come through the organs of the worldwide RC Church, and its billion adherents to the faith.
We should not underestimate the enormous power that will be applied in many direct, indirect and subtle ways to implement “Laudato Si,” the Holy Father’s vision of how his church can help to bring about significant changes in the global society.
Consider the work of the Interfaith Center on Corporate Responsibility (ICCR), the 35-year old faith-based investment coalition, whose 300 institutional members manage up to $100 billion in assets. ICCR is a value-driven organization “who view the management of their investments as a powerful catalyst for social change.” ICCR’s membership includes many RC Church institutional investors.
We can expect to see the Pope’s vision applied by ICCR institutional members in the areas of concern — corporate governance, domestic health, the environment (including global warming), fair lending, food access and safety, human rights, and water (including corporate water impacts).
I’m keeping in mind the century-long influence that another Pope had with his encyclical letter on labor rights, human rights,
This was Pope Leo XIII and his 1891 letter, “Rerum Novarum” — on “the Rights and Duties of Capital and Labor.” This addressed the conditions of the working classes as industrialization and the emergence of the modern capital markets gained momentum.
What resonates from that work for some today: “Remedy must be found quickly for the misery of wretchedness pressing so unjustly on the majority of the working class…” Through the decades since the start of the 20th Century, RC Church interests have been guided by Rerum Novarum’s dictates to the faithful.
Expect the vision of the present pope to serve RC Church interests in similar ways — with impacts being felt in discussion of climate change, global warming, the plight of the worker, income & wealth inequality, financial & economic fairness, and many more issues that are in the realms of the capital markets and the global corporate community.
Noting MSCI Research on Inequality
About the issues surrounding wealth and income inequality: MSCI recently projected important trends for 2016. In the firm’s “2016 ESG Trends to Watch” report, there is this observation:
According to the NGO Oxfam, at the end of 2014, 80 individuals owned the same wealth as the bottom half of all of the world population. (The number was 388 individuals in 2010.) This is not just a societal issue, MSCI points out. OECD estimates that that growing inequality has cumulatively cuts six to seven percentage points off U.S. economic growth in the United States, Italy and Sweden between 1990 and 2010. (The U.K., Finland and Norway cut in growth was higher, at nine percent.)
What needs more understanding, says MSCI in its report, is how corporations feed into inequality (through job cuts, pushing down of wages, maximizing shareholder return) which over time could impact economic growth and stability.
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So – in the year 2016 we’ll be monitoring the growing intensity of the public debate about wealth and income inequality, in the presidential race for sure (thanks to U.S. Senator Bernie Sanders and his positions on the subject), in the fiduciary concerns raised (especially by activist investors), and in the restlessness of the population if the anger rises and targets are selected (that is, those perceived to be responsible for growing inequality in developed and developing countries).
The actions of the worldwide Roman Catholic Church, following the Pope’s positions on inequality, will be important to watch in the months ahead.
The statements and actions of investors will also be worth watching. The public dialogue on inequality will have many dimensions, depending on the voices raised. As responsible investment thought leader (and G&A Institute Fellow) Steve Viederman notes, “…where you sit will determine where you stand on an issue.” (“Sitting” meaning your affiliation, where you sit during the business day.)
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What are your thoughts? Let us know! Send me an email at: email@example.com.