Why Sustainability Must Be Centered On Environmental Justice

Part 2 – Companies Doing it Right

By Gia Hoa Lam, G&A Institute Analyst-Intern

Sustainability and environmental justice are interdependent. In the same manner as sustainability solutions, environmental justice solutions are specific to a company’s unique operations and community, encompassing a wide range of environmental, social, and economic considerations. Following are a few examples of companies that are incorporating environmental justice in their ESG and sustainability programs.

These companies combine their business goals with equity goals in a manner that reinforces one another. This way, environmental justice and sustainability become defined by the opportunity to expand and innovate rather than solely focus on risk mitigation and compliance.

Timberland

Timberland has been in partnership with the Smallholder Farmers Alliance (SFA) of Haiti for over 12 years. Haiti is one of the most deforested countries in the world, with an estimated 1.5% tree cover (by comparison, the Dominican Republic has 48% tree cover and U.S. cities have an average of 27% tree cover).

This deforestation has major ramifications for Haiti’s biodiversity, vulnerability to natural disaster, and economic potential. Through its partnership with SFA, Timberland has planted over 7.5 million trees and supported programs to train local farmers.

The cooperative model has led to a 50% increase in farmer income and 40% increase in crop yield. With the help of Timberland, cotton has been re-introduced to the island with potential of becoming a major export. Timberland is seeking to expand the program and gain additional support from parent company VF Corporation.

Timberland, in supporting Haitians, is practicing environmental restoration and economic development. Timberland also supports the work of several NGOs focused on supporting local communities, including the Great Green Wall, Trees for the Future, the Green Network, Las Laguna Ecological Park, Justdiggit, and Treedom. Partnership with local support ensures Timberland’s efforts are connected with on-the-ground experts.

Microsoft

Microsoft has consistently been a leader in ambitious environmental goals with a commitment to carbon neutrality by 2030 and net zero by 2050 (removing from the environment all carbon the company has emitted either directly or by electrical consumption since it was founded in 1975). To meet these ambitious goals, Microsoft is seeking aggressive carbon reductions through its operations and scaling carbon removal. Its 250-megawatt power purchase agreement with black-owned Volt Energy shows the possibility of combining environmental goals, sustainable procurement, and racial justice.

Volt Energy also commits to “invest[ing] a portion of the revenue from the Power Purchase Agreement in community impact funding initiatives, which will support programs that bring the benefits of renewable energy closer to communities that have not been significantly included in the wave of clean energy initiatives undertaken by the private and public sectors.” In this manner, supporting a sustainable economy can also mean supporting an equitable economy.

CVS Health

CVS has committed $1.5 billion to social impact investment with an understanding of racial disparities in health outcomes and environmental health. To achieve the company’s goal of healthy communities, CVS is focusing on access to health care, social determinants of health like housing and food security, and supporting local health organizations.

CVS practices a multi-stakeholder approach by mapping the most vulnerable to disparate health outcomes, senior citizens, Black communities, and Hispanic communities. Initiatives such as partnership with the Conference of National Black Churches to improve immunization rates shows a commitment to meeting underserved communities where they are and understanding historical contexts to disproportionate health outcomes.

Project Health is another program that provides basic screening services such as blood pressure, body mass index, and glucose testing to the uninsured, along with information for customers looking for mental health and follow-up care resources. CVS thus aligns its expansion strategy with an environmental justice goal, understanding the economic and restorative opportunities within health care.

ABOUT THE AUTHOR

Gia Hoa Lam is a G&A Institute Analyst-Intern. Due to his previous work as a corporate sustainability intern at Ceres, a sustainability nonprofit, Gia Hoa has sustainability consulting experience across multiple industries from sustainability planning for the apparel industry to analyzing human rights policies for investment banks. On campus, Gia Hoa is a founding member of Bentley University’s Green Revolving Fund, facilitated the Bentley 2026 Sustainability & Climate Action planning process, and is currently advocating for endowment stewardship.

Gia Hoa centers people in his sustainability work with a deep passion for climate justice, DEI, and climate refugees. Initially interested in psychology, Gia Hoa realized mental wellbeing was directly linked with access to environmental and social resources. Thus, he began his journey to be a change leader through stakeholder engagement and facilitation. He believes the corporate world has the capacity for compassionate and collaborative change.

An Overview of Corporate Diversity, Equity & Inclusion

By Janis Arrojado – G&A Institute Analyst-Intern

Diversity, equity, and inclusion (DEI) initiatives are integral to creating a positive working environment. Diversity refers to increasing representation from marginalized groups, while equity means ensuring all individuals have what they need to succeed, and inclusion is creating an environment where different people and perspectives are valued and integrated into an organization.

Companies benefit from DEI efforts, and it has been found that companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns higher than their competitors.

Companies incorporating DEI into their actions align with the United Nation’s Sustainable Development Goals (SDGs) — specifically SDG 5 (Gender Equality), SDG 8 (Decent Work and Economic Growth), and SDG 10 (Reduced Inequalities).

Representation and inclusion are important for underrepresented identities, and it is important to understand barriers in the workforce for different communities. Companies seeking inclusion should consider obstacles in place for various identities:

  • Ethnicity/Race – Many companies struggle with racial and ethnic discrimination, with US $74.8 million collected from employers in the U.S. in 2020 due to racial discrimination violations. As company leaders in the U.S. are overwhelmingly white, long-standing company culture, norms, and policies can cause isolation, microaggressions, job dissatisfaction, and a lack of support for members of underrepresented races and ethnicities.
  • Gender – In the workforce, women continue to be underrepresented in every level of career progression. As organizations endeavor to have more gender representation throughout, it is important to recognize the barriers that women face in the workplace. Women often face discrimination in hiring, bias in performance evaluation criteria, and prejudice in navigating professional settings, and women of color in particular are more likely to experience these issues.
  • LGBTQ+ – The LGBTQ+ acronym encompasses members of the lesbian, gay, bisexual, transgender, and queer community. Although many consumer brands have publicly supported the LGBTQ+ community and have partnered with LGBTQ+ pride events, there is still a long way to go. Only four CEOs who are openly LBGTQ+ lead America’s top corporations, with only one who is female. In the workforce, people with LGBTQ+ identities face issues with sexual harassment, isolation, inappropriate comments, and career progression.
  • Age – Age is often left out of DEI efforts, with more than half of 6,000 global employers answering in an AARP survey that they do not have a specific DEI policy for age. Age discrimination can be for people considered “too young” or “too old” for a role. For older members of the workforce, harmful stereotypes about older workers not being skilled with technology and being closed off to change lead to an age bias.
  • People with Disabilities – Research has shown that one in four Americans have some type of disability, which can be visible or invisible. To truly create a diverse and inclusive company, corporations need to focus on employing and providing support to people with disabilities. People with disabilities are severely under-employed and are twice as likely to be unemployed than people without disabilities. People with disabilities have many barriers in the workforce, including lack of accommodation, hiring discrimination, and exclusion.

Looking Forward

It is becoming increasingly important that corporations reflect the diversity of the population of America. Having DEI initiatives is a start to creating an equitable environment for underrepresented identities.

Author

Janis Arrojado is a senior at the University of North Carolina at Chapel Hill, studying Environmental Science and Geography.  Her interests include corporate sustainability, environmental justice, and sustainable development. She currently is an analyst-intern at G&A Institute.

 

 

 

Sources / References for More Information

Why Sustainability Must Be Centered On Environmental Justice (Part 1)

By Gia Hoa Lam, G&A Institute, Sustainability Analyst Intern

Alok Sharma, president of the COP26 climate summit, held back tears in his closing speech at the climate change conference in Glasgow last November. Many environmentalists felt dejected by late changes that seemed to weaken climate agreements, such as the “phasing down” rather than “phasing out” of coal or the delay in 1.5 degree C commitments.

However, commitments to environmental justice and supporting adaptation projects were strengthened and many nations doubled their contributions to adaptation funds and funds for developing countries.

Some businesses seem to have the opposite approach. Corporations today are leading the charge on GHG emissions reductions and disclosure, but we often see shortcomings on commitments to environmental justice. Environmental justice refers to the fair treatment of all people, regardless of race, color, national origin, or income, with respect to equal environmental protection.

Oftentimes new projects or plants that pose environmental impacts—regardless of industry—are located in areas where businesses believe there will be the least resistance from the community or are the cheapest to implement.

In the effort to avoid delays or to be cost-effective, vulnerable communities often bear the burden of environmental effects. These environmental effects can be anything from increased air and water pollution leading to respiratory issues to decreased land value and community deterioration.

In the U.S., the environmental justice movement first gained national attention with the demonstrations of hundreds of Black Americans in 1982 at Warren County, in the State of North Carolina.

The state bought land in Warren County to build a landfill to store 31,000 gallons of polychlorinated biphenyls, a known carcinogen and endocrine disruptor. The county’s citizens were predominantly Black and low-income. Nonviolent protests barring trucks from beginning construction of the landfill and marches to the state capitol led to 520 arrests. National attention and mobilization from environmental groups revealed the disproportionate health risks that minority and low-income communities face.

Researchers collaborated with environmental groups to begin studies into this disproportionate risk and found preliminary evidence that a majority of Black and Hispanic communities live in close proximity to one or more uncontrolled dumps.

The mainstream environmental movement finally responded to environmental justice action after an open letter was sent in 1990 to the directors of the ten largest environmental groups, charging them with a history of racist and exclusionist practices and a failure to support environmental justice efforts.

Today, more than 30 years later, systemic racism and inequity continue to affect disadvantaged communities greatly, beyond the scope of proximity to waste. Current risk assessments by federal agencies for programs do not effectively factor in procedural equity or identify vulnerable communities.

Infrastructure that pollutes local areas are often in close proximity to disadvantaged groups. Policy is therefore needed to curb emissions from vehicles and plants, while also avoiding latent issues that may harm the environment or long-term sustainability.

Cancer Alley refers to the predominantly Black and poor populations around the Mississippi River in the southern U.S. who are at greater risk of cancer, such as 30% higher risk for leukemia.

A study published in 2020 considered Louisiana to be, “one of the most toxic states, annually discharging 7.2 tons of hazardous waste per capita, and accounting for 12.5% of the country’s hazardous waste from only 6.5% of the nation’s chemical facilities”.

This toxic waste is often dumped into the Mississippi River from petrochemical plants, leading to high nitrates. Emissions from petrochemical plants have also led to high concentrations of formaldehyde and benzene.

The Clean Water Act does little to tackle non-point sources of effluence. The nitrates in the Mississippi River cannot be traced to any one petrochemical plants, or its proportional contribution to air pollution. Citizens looking to report these plants find it hard to sue because of this shared cause of damages.

Public policy changes are needed to ensure vulnerable communities are not withstanding the worst of environmental effects due to a lack of political resources that leads to zoning and land use decisions without proper input from those affected.

The growing body of evidence shows the largest determinants of environmental and public health are tied to the color of one’s skin. Additional inequities include higher risk for unsafe drinking water, less access to recreational areas, and fewer environmental grants.

The Institute of Environmental Science and Technology at the Universitat Autonoma de Barcelona have constructed an Environmental Justice Atlas, mapping environmental injustices across the world.

What Can the Private Sector do?

ABOUT THE AUTHOR

Gia Hoa Lam is a G&A Institute Analyst-Intern. Due to his previous work as a corporate sustainability intern at Ceres, a sustainability nonprofit, Gia Hoa has sustainability consulting experience across multiple industries from sustainability planning for the apparel industry to analyzing human rights policies for investment banks. On campus, Gia Hoa is a founding member of Bentley University’s Green Revolving Fund, facilitated the Bentley 2026 Sustainability & Climate Action planning process, and is currently advocating for endowment stewardship.

Gia Hoa centers people in his sustainability work with a deep passion for climate justice, DEI, and climate refugees. Initially interested in psychology, Gia Hoa realized mental wellbeing was directly linked with access to environmental and social resources. Thus, he began his journey to be a change leader through stakeholder engagement and facilitation. He believes the corporate world has the capacity for compassionate and collaborative change.

SEC Focuses Efforts on Climate-Related Corporate Disclosures

By Noelani West, G&A Institute Analyst-Intern

The last decade has seen a surge in sustainability reporting among the largest U.S. companies. Recently published research from G&A Institute revealed that in 2020, 92 per cent of S&P 500 Index® companies published sustainability reports or disclosures, compared to just 20% in 2011.

G&A’s research also determined that sustainability reporting within Russell 1000 Index® companies has been steadily increasing, with 2020 seeing 70% of those companies publishing sustainability reports, compared to 60% in G&A’s 2018 analysis.

This is an encouraging trend, especially considering that until now, sustainability reporting in the U.S. has been voluntary. This is not the case in other countries around the world, with the UK, Japan, New Zealand, and Singapore mandating that publicly-traded companies disclose climate-related information as well as diversity and human rights data.

Many of these countries use the Task Force on Climate-Related Financial Disclosures recommendations (TCFD) as a foundation for their mandatory disclosure policies.

In the U.S. the U.S. Securities and Exchange Commission (SEC) requires publicly-traded companies to disclose certain material business and financial information, but currently mandates very little ESG disclosure. However, in 2021 it was confirmed that SEC staff are developing ways in which climate and ESG-related disclosures can be enhanced among public companies.  These new policies are expected to be announced in 2022, so let’s take a look at some key statements from SEC staff to help companies know what this may mean for them:

  • In February 2021, the SEC’s Division of Corporation Finance announced an enhanced focus on climate-related disclosures in public company filings. This enhancement would build off guidelines established in the SEC’s 2010 Guidance Regarding Disclosure Related to Climate Change, which only require listed companies to disclose ESG issues that are deemed “material” to that company.
  • In March 2021, the SEC announced the formation of a Climate and ESG Task Force, whose primary focus is to identify ESG-related misconduct. The SEC also opened up a forum for public comments as they apply to potential new SEC disclosure requirements and how or if current regulations should be modified. SEC Chairman Gary Gensler reported in July that, “Three out of every four of these responses support mandatory climate disclosure rules.”
  • In June 2021, the S. House of Representatives, in a move backed by President Joseph Biden, approved a bill that would support the SEC’s efforts to require public companies to disclose climate-specific metrics. The bill, called the Corporate Governance Improvement and Investor Protection Act, would require publicly traded companies to periodically disclose information related to ESG performance metrics and would support the SEC by providing discretion to amend securities laws to build ESG disclosures into their standards. A section of the bill, titled the Climate Risk Disclosure Act of 2021, is directed at the SEC and requires the disclosure of information regarding climate change-related risks posed as well as strategies and actions to mitigate these risks. Specifically, issuers would be mandated to report direct and indirect greenhouse-gas emissions and disclose fossil fuel-related assets.

These proposed bills have not passed the U.S. Senate and while the specifics of a final bill are unknown, we have some idea of the impending changes and adaptations companies may need to make to their standard operating procedures relating to ESG reporting.

Companies that don’t already provide more holistic means of reporting their ESG data will need to prepare themselves to begin doing so.

To stay ahead and ensure they are best prepared for the upcoming new mandates, companies should first make the decision about which reporting metrics to use. Many companies opt for a combination of the Sustainability Accounting Standards Board (SASB) industry-specific metrics and those disclosures listed in the Global Reporting Initiative (GRI). The combination of the two frameworks provides a broad and standardized way for stakeholders to analyze data and make informed decisions. After metrics and reporting frameworks have been chosen, companies should next identify the gaps in the data they have already collected and the data they should disclose (as outlined in the different reporting frameworks).

The push for mandatory ESG reporting should not come as any surprise, as human rights and climate risks are at the forefront of society’s concerns, and investors are no exception. Investors are becoming increasingly more interested in ESG metrics of public companies so that they can make rational and informed investment decisions.

With societal ESG concerns continuing to grow, 2022 is sure to bring even higher percentages of corporate sustainability reporting. Whether it will be mandated by the SEC or not, companies should expect and be prepared for more stringent reporting requirements.

ABOUT THE AUTHOR

Noelani West is a G&A Analyst Intern and currently a senior at Columbia University in the City of New York, pursuing her undergraduate degree in Sustainable Development. Through an array of interdisciplinary coursework, she has been able to explore how sustainability is applied to in various fields and sectors. This has reinforced in her just how crucial and relevant these topics are. She hopes to launch a career in corporate sustainability, helping companies develop and implement ways to become more equitable and sustainable. Noelani is especially passionate about environmental sustainability as well as sustainability technology.

The Aftermath of Rana Plaza: Sustainable Fashion Organizations

By Lauryn Power, G&A Institute Analyst-Intern

The issues of sustainability and just labor rights in the fashion and clothing industry were brought to the world’s attention in April 2013 by a tragic event in Dhaka, Bangladesh. On April 23, 2013, cracks were found in an eight-story factory building known as Rana Plaza, which hosted factories for many different industries. Many workers were sent home.

Then, on April 24th garment workers and managers were fighting over whether workers should go into the building and work. Workers were threatened with withheld pay if they did not work that day, so they ultimately went in.

A few hours later the building collapsed, killing over 1,100 people and severely injuring over 2,500.

The Rana Plaza collapse stands as a turning point in how the fashion industry worked with their supply chains. For decades before, incidents and disasters had been coming to light with little worldwide recognition or change on the part of clothing and fashion brands, which had a ‘don’t ask’ policy.

This event shifted the world’s attitude towards brands’ unwillingness to check their supply chains and forced them to take a more active role in how their supply chain is run.

Those workers were killed in the name of “cheap clothing.” Rana Plaza was found to be overcrowded with people and machines, set up in dangerous locations threatening the structural stability of the building. Over 29 major fashion brands were implicated in this incident. The entire world was watching this event unfold and raised questions of who is to blame and how this could have even occurred.

Soon after the collapse, Bangladesh instituted the Accord on Fire and Building Safety which over 200 brands signed. It set up plans for stricter fire and safety inspections, compensation from brands to improve factory conditions, banned brands from working with factories that did not comply, and set up anonymous reporting for workers.

28 major fashion brands came together to form the Alliance for Bangladesh Workers and set action plans for new inspection training and protocols.

Both of these accords did make major changes to factory standards, and over 130,000 safety violations were uncovered and corrected. Many factories had to provide more unobstructed ways of exit and were forced to remove gates which had been in place to keep workers on factory floors. Over 50 factories were shut down completely, and these initiatives protected over two million workers.

While these programs made major changes for garment factory workers, they often seemed more like bringing these factories up to the bare minimum standards. In the years since, many non-profits and other organizations have centered their goals around providing factory workers with just labor rights and supporting those in need.

Moving Forward

Fairtrade International is one of the most well-known nongovernmental organizations working towards “just labor rights.” This organization is co-owned by more than 1.8 million farmers and workers who strive to ensure that consumer goods across many industries are made in accordance with rigorous ethical standards.

Their key priorities span across all workers’ rights including child labor and forced free labor, mitigating climate change impact for workers, decent livelihoods, protection of the environment, and gender equality. Thus, they implement strict standards for all products which attempt to be Fair Trade Certified™.

For textile certification, workers must be paid living wages, understand their legal rights to allow them to unionize, have elected representatives to voice concerns, have safe working spaces, and have reasonable working hours. Fairtrade works with hundreds of fashion brands including Ralph Lauren, PACT, Patagonia, Athelta, and J. Crew.

Many other organizations were founded to focus on one specific issue within the garment industry. The Sustainable Apparel Coalition (SAC) attempts to unify all these issues and help brands track and fix them within their own operations. Their goal is to develop a sustainable consumer goods business model based on collaboration between organizations and expert leadership.

SAC works with Higg Co and the Apparel Impact Institute to set their foundations and goals for brands, using the Higg index which takes into account many factors including climate change, water and chemical usage and just labor rights. SAC has many partners including Allbirds, Everlane, LL Bean, Levis, New Balance, Patagonia, and Walmart.

Even more organizations are seeking to force brands to focus even deeper into their supply chains by checking fiber source and hazardous chemical use. While not impossible, certain standards are difficult for brands to enforce.

For example, paying living wages is often restricted by the local government’s minimum wages. Also, many factories are producing garments for multiple brands so even if one brand was willing to simply pay more to ensure living wages, it may not be enough to cover the costs for the other brands. There is also no way of ensuring that money will filter down to workers. As a rule of thumb, consumers can look for brands who do work with Fairtrade International and SAC; I see this as a good way to try to ensure certain worker standards are being met.

Labor rights in Bangladesh have come a long way since the tragedy, but injustice is still occurring everyday. The Rana Plaza collapse wasn’t the first labor rights disaster and it likely won’t be the last. With globalization, it is easier for these types of critical issues to slip through the cracks, so there is still a lot of work to be done to create equitable and just working conditions globally.

ABOUT THE AUTHOR

Lauryn Power is a G&A Institute Analyst-Intern, currently pursuing a MS in Sustainability in the Urban and Environmental Planning department at Tufts University. She has a BS in Chemistry from the University of Virginia where she also earned a minor in Mathematics. She also received a certificate in Business Fundamentals at the McIntire School of Commerce at the University of Virginia.

She has worked in various chemistry research labs and has a scientific background on climate change. She also has experience in sustainable fashion. She interned for the U.S. Green Chamber of Commerce doing research on current issues with fast fashion globally.

Through her educational background and experiences in the industry, she hopes to work in the intersection of sustainability and business, helping corporations to improve their practices and find ways to make their business more sustainable.

Common Sustainability Reporting Standards Remain Elusive

December 21, 2021

by Bernie Kilkelly – VP and Director of Corporate ESG Disclosure, G&A Institute

Efforts by various international organizations to develop common global sustainability reporting standards continue to run into roadblocks, as different groups propose diverging approaches and methodologies to enhance ESG disclosure.

As reported by Responsible Investor (link below in our Top Stories), the G7 Impact Taskforce that was created in July (under the UK’s presidency of the G7), recently commented about reporting standards being developed by the International Sustainability Standards Board (ISSB), an even newer group launched at COP26 in Glasgow.

Rather than helping to find common ground around simplifying the alphabet soup of reporting frameworks and standards, the comments by the G7 Impact Taskforce (ITF) seemed to add to concerns that reporting standards could become more fragmented.

The ITF said it supports the approach of the ISSB, which is governed by the International Financial Reporting Standards (IFRS) body, to develop a global reporting baseline focusing on the impact of sustainability factors on company enterprise values.

But at the same time, it recommended that countries “build upon this” approach to include other impacts on stakeholders that this reporting baseline would not address.

The ITF’s comments seemed to show support for the broader “double materiality” reporting approach that focuses on the impacts of business activities on society and the environment.  The “double materiality” approach is being used by the European Union’s accounting body —  the European Financial Advisory Group (EFRAG) — to develop a new set of corporate sustainability disclosure standards.

While the ITF’s statement calls for mandatory impact accounting for businesses and investors that would include “harmonized standards,” the elusive search for a common global approach to sustainability reporting continues.

As we close out 2021 and embark on a New Year, the G&A Institute team will continue to monitor the efforts of these organizations and help you make sense of the ever-changing world of sustainability reporting and disclosure.

Best wishes from the G&A team to all for a Happy New Year!

Top Stories

It’s Here: G&A Institute’s “2021 Sustainability Reporting in Focus” Trends Report

November 30, 2021

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

Our annual in-depth review of corporate sustainability / ESG reporting trends is  available for your reading. In our 2021 report, you will find detailed analysis of the reporting trends of the S&P 500® Index companies and Russell 1000® Index companies, showing shows that ESG reporting is increasingly being adopted by mid-cap companies.

This is the 10th anniversary of G&A’s annual research on sustainability reporting trends of the largest U.S. publicly-traded companies.

Governance & Accountability Institute, Inc. was established in 2006-07 by a team who had worked together at other management consulting firms.

Since our founding we have been focused on the world of corporate disclosure and structured reporting (and trends), and the increasing transparency (voluntary or not!) of publicly-traded firms for several decades.

The adoption of Sarbanes-Oxley (SOX) package of laws and rules and later Dodd-Frank (DF) rules brought many changes to corporate disclosure in the years following their passage — and significantly shaped the work we do with our client companies.

Our firm’s launch coincided with the morphing of what had been “socially responsible investing” (SRI) into today’s “sustainable and responsible investing” and with the emergence of more cohesive forms of evaluating a company’s corporate sustainability, citizenship, social responsibility… the format we recognize today as “ESG.”

The Global Reporting Initiative (GRI) noticed our work in analyzing and publicly sharing considerable information about best practices in corporate reporting and in 2010 invited G&A to be its Data Partner for the U.S., U.K., and Republic of Ireland.

The work we did in collecting and analyzing literally thousands of corporate reports from 2010 to 2020 helped us in our work with companies, helped GRI to expand its visibility and appeal to the American corporate sector, and helped corporate managers who selected the GRI framework for their reporting.

And a special thank you to our treasured colleague Mike Wallace (then head of GRI operations in the U.S.) for helping to make this happen!

As we gathered and analyzed corporate sustainability reports, we paid close attention to the companies included in the S&P 500 Index® – the preferred benchmark for the majority of asset managers.

In 2011, we released our first report analyzing the sustainability reporting of the S&P 500 companies for the publication year 2010, which showed that just 20% published sustainability reports or disclosures.

Great progress:  Our 2021 report shows that 92% of the S&P 500 companies published a sustainability report in 2020, demonstrating that corporate sustainability reporting is clearly a best practice for the largest companies.

Two years ago, we expanded our research to the next 500 largest public companies in market cap size, as represented in the Russell 1000® Index — another very important benchmark for investors. This was a heavy lift for our research team, and for our 2021 report the COVID-19 crisis created its own headwinds.

The results of the in-depth research of our great research team are now available in the “2021 Sustainability Reporting in Focus” trends report. We will stop the backgrounding here and invite you to dive into the report to do your own analysis. It is our Top Story of the week. Please do let us know your comments and questions as you examine the trends.

Our annual reports on corporate ESG disclosure trends have wide readership and long shelf life and have proved useful in informing corporate sustainability managers as they develop their own company’s sustainability report.

It has been a long and rewarding journey for us, these past 10 years of “deep diving” on U.S. corporate sustainability / ESG reporting trends – thank you to all who have followed us as we shared the annual reports with you. And so let us know how we can improve the 2022 report – now underway!

Top Story/Stories

The World’s Eyes on the USA as FSOC Agencies Engage on Climate Risk

October 31, 2021 – As The Family of Nations gathers for COP 26 climate talks in Glasgow – the USA is back at at the table. 

What is President Joe Biden and the American delegation bringing with them to Scotland?  A big announcement from the White House just a few days ago that signals “we are serious”. Especially in regulatory and financial matters.

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

The gathering of the family of the world’s nations in Glasgow, Scotland for “COP 26” (the annual UN climate summit) is at hand!

There has been an increasing flow of news and opinion related to the big event as the United Nations, almost 200 sovereign governments, NGOs, corporations, and other constituencies announce a widening range of developments related to the summit now underway

In the United States, a significant announcement came in October as the Federal government’s FSOC – the Financial Stability Oversight Council “engaged on climate change”.

We’re sharing the important background with you:

You may recall that in May 2021, soon after taking office, The Biden-Harris Administration detailed the policies and actions of its “whole of government” approach to climate change in the “U.S. Climate-Related Risk Executive Order” (the “EO”) originally issued in May 2021.

The EO set out the federal government’s climate risk accountability framework and the implementation strategies for the “whole of government” approach to climate-related financial risk.

Think about the agencies affected by the EO: NASA; DoD; Labor; Interior; HHS; Education; the Federal Acquisition Council (considering GhG emissions when making buying decisions)…and many more.

The policies in the EO and in then implementation steps by Federal agencies are again in public view as President Joe Biden prepared to participate in the COP 26 meetings.

The White House reminded us of EO 14030 in a news announcement (“A Roadmap to Build a Climate-Resilient Economy”) on October 14th.

This was the backdrop for the announcement from the powerful FSOC via U.S. Treasury Department for planned measures to protect retirement plans, homeowners, consumers, businesses and supply chains, workers, and the federal government from the financial risks of climate change.

Policies and actions were outlined for us as the FSOC on October 21 at identified climate change as an emerging and increasing threat to financial stability.

To review: there are six important “workstreams” in the Federal government’s framework to address climate-related financial risk:

• Protecting the resilience of the U.S. financial system.
• Protecting life savings and pensions.
• Using Federal procurement (federal agencies are the largest buyers of goods and services in the nation).
• Incorporating the risks into Federal lending and underwriting.
• Incorporating the risks into the Federal financial management and budgeting.
• Building resilient infrastructure and communities.

In the historic May 2021 EO “financial regulation” was among the issues addressed; now we are seeing the implementation plans of the government’s Financial Stability Oversight Council (the FSOC), the member group of key regulators as the agencies of the council spell out approaches to engagement on climate change issues.

Important: the work of the regulatory agencies in the FSOC affects many aspects of the American society: the Federal Reserve System and 12 district banks; Department of Treasury; the Office of Comptroller of Currency (OCC), part of Treasury that regulates national banks; Securities & Exchange Commission (SEC); Commodity Trading Futures Commission (CTFC); and, Federal Housing Finance Agency (FHFA).

The FSOC’s new report demonstrates the Council’s and member Federal agencies’ commitment to building on and accelerating existing efforts on climate change through “concrete recommendations” to the individual member agencies.

In our conversations with corporate managers and investment professionals we often explain that after the 2008 financial crisis, the member nations of the G20 came together to address financial risk matters in the new Financial Stability Board (FSB). This is a “think tank” approach to developing policies that each G20 nation can bring back to their regulatory agencies for consideration.

The FSB created the TCFD (Task Force for Climate-related Financial Disclosure), chaired by Michael Bloomberg. Important to keep in mind: the representatives to the FSB are the Secretary of the Treasury; the Federal Reserve chair; and, the SEC chair.

Each of those regulatory agencies and their leaders are members of the Federal government’s Financial Stability Oversight Council.

Commenting on the latest developments at FSOC, former Federal Reserve chair, now Secretary of Treasury Janet Yellen noted: the FSOC report puts climate change squarely at the forefront of the agenda of [Council member agencies] and is a critical first step forward in addressing the threat of climate change…it will by no means be the end of this work…”

We share the important documents related to these development as President Joe Biden and his delegation start their conversations at COP 26. 

Top Story/Stories

U.S. Financial Stability Oversight Council Engages on Climate Change
https://home.treasury.gov/news/press-releases/jy0426

Secretary of Treasury Janet Yellen Comments
https://home.treasury.gov/news/press-releases/jy0424

From the White House: Executive Order #14030
https://www.whitehouse.gov/wp-content/uploads/2021/10/Climate-Finance-Report.pdf




The U.S.A. & the 2015 Paris Accord: Five Years On, the Largest Economy on Earth Promises to Return – With a Cabinet of Climate Change Champions Preparing for Action

December 20 2020 – published again in the blog in October 2021 as President Joe Biden travels to the Stockholm meeting of the COP 26.

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

Seems like just yesterday we were celebrating the great promise of the 21st Century in 2015 – the Paris Accord. Can you believe, it is now five years on (260 weeks or so this December 2020) since the meeting in the “City of Lights” of the Conference of Parties (“COP 21”, a/k/a the U.N. Paris Climate Conference).

This was the 21st meeting of the global assemblage focused on climate change challenges.

The Promise of Paris was the coming together of the world’s sovereign states – the family of nations — to address once more what for many if not all of the states is an existential threat: climate change.

The parties agreed to a binding, universal agreement – the Intended Nationally Determined Contributions (“NDC”) to attempt to limit global warming to 2.7C by 2100.

The United States of America was [then] prominent among leading economies of the world at the Paris gathering, signaling the intention to play a significant role in addressing climate change matters. In fact, the final agreement was signed in New York City on Earth Day in April 2016.

Promises made, promises broken – in his campaigning and then almost immediately upon taking office, President Donald J. Trump said the U.S. would leave the historic agreement and nearing the end of his term in 2020 had just about completed the exit.

To the family of the world’s nations was this message: Do it without the United States of America.

Then, the recent good news: President-Elect Joseph Biden has indicated that his would be the “climate administration” beginning in January 2021 and quickly named former Secretary of State John Kerry to be his “climate czar”, the influential voice on the world stage to signal the USA is back in addressing the challenges of climate change.

Secretary Kerry was the U.S. representative to the COP 21 meetings in Paris and guided the nation’s inclusion in the Paris Agreement.

Forward to the last days of 2020: This is a climate emergency, President-Elect Biden said, and former US Senator and Secretary of State Kerry would lead the effort to elevate the nation’s response to the ever-escalating crisis, influencing policy and diplomatic initiatives on the world stage. (

Secretary Kerry will officially be on the National Security Council and report to the President of the United States after January 20, 2021.

Speaking to ProPublica, Secretary Kerry said “…the issues of climate change and human migration are intertwined… people are moving to places where they think they can live…and they will fight over places they want to move to… we will have millions, tens of millions of climate migrants…”

Come 2021, the family of nations can begin to celebrate – the United States of America will be back on the front lines in meeting myriad challenges related to the climate crisis.

As we prepared our commentary for the G&A Sustainability Highlights newsletter, President-Elect Biden named his dream team of climate change champions to lead the nation’s efforts:

Gina McCarthy, former head of the US EPA, will be the domestic climate change advisor (heading the White House Office of Climate Policy).

Governor Jennifer Granholm is the nominee to head the Department of Energy (her home state of Michigan is the home of the auto industry – she was the state’s governor).

Congresswoman Deb Haaland will be the first Native American when confirmed to be named to a cabinet post. She’s member of the federally-recognized Pueblo of Laguna, the New Mexico tribe whose 500,000 acres of land are near to Albuquerque. They refer to themselves as “Kawaik People”.  As Secretary of the Interior, she will have responsibility for jurisdiction over tens of millions of acres of tribal lands). Interior’s Department of Indian Affairs (BIA) is charged with “…promoting safe and quality living environments, strong communities, self-sufficiency and enhancing protection of the lives, prosperity and well-being of American Indians and Alaska Natives”.

Michael S. Regan, who worked in both George W. Bush and Bill Clinton administrations, and who is head of North Carolina’s Department of Environmental Quality, is Biden’s nominee to head the US Environmental Protection Agency.  He will have the daunting task for rebuilding the nation’s environmental regulations that were unraveled during the Trump Administration.

Brenda Mallory, experienced federal government attorney, will had the Council on Environmental Quality.

This is also a team, Biden and supporters point out, “that looks like America”.

Leveraging the strategies, policies, actions, and programs designed to address climate change challenges, the team and colleagues will “build back better” with green infrastructure initiatives at the core.

In the December 2020 issue we brought readers a selection of current news and opinion and shared perspectives on the Paris Accord, now five years in.

As we neared year-end 2020 much of the news was about climate, climate, climate in the context of the peaceful transition of power in this, the world’s most influential democracy.

A nation that for many years had been that Shining City on a Hill for other peoples and nations.  Will the USA be that again?

Stay Tuned to climate change crisis responses that have the potential to be at the heart of many of the new administration’s public policy-making efforts. On to year 2021…

TOP STORIES in the Newsletter Dec 20 2020

Against the above context, we share here a selection of the perspectives on the 5-Year Anniversary of the Paris Agreement.  Where we are now as we prepare for the transition year 2021 in the USA:

Springtime in North America – A Time Featuring Corporate-Investor Engagement and Proxy Voting on Critical Issues

April 20 2021   Spring is in the air!  Proxy Season 2021 getting underway.  So how did we get here?  Some history and springtime news. 

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

Springtime comes to the USA and and the Northern Hemisphere countries with pretty flowers in bloom, trees budding, the onset of warmer weather.  And…

Asset owners and their managers participating willingly or reluctantly in the peak months of corporate proxy voting season in North America.

Typically, the corporate issuer develops the resolution(s) for voting by the shareholder base – for example, election of slate of nominees for the board and approval of the outside auditing firm.

And then… there are the resolutions prepared by the shareholders, and these are usually not to board and executives’ liking.

Thought you might be interested in some of the history of shareholder activism.  In the earlier days of shareholder activism certain “gadflies” would offer up their resolutions for inclusion in the voting (typically then, by individual investors).

Brothers John and Lewis Gilbert and a few others of similar thinking would gin up their resolution drafts and then face the challenge by the target company could be expected.

Some still around remember the ever-present at annual meeting Evelyn Davis, a Dutch Holocaust survivor with strong feelings and lots to say about how companies she invested in were being managed .

The Gilbert siblings operated “big time” in proxy season; they owned shares in 1,500 companies and attended at least 150 corporate annual meetings each year. T

They were often characterized as showmen (kicking up a storm at companies like Chock Full o’ Nuts and Mattel and other companies’ meetings.) Right after WW II John Gilbert got the SEC on the shareholders’ side; the regulatory agency started to require that companies include relevant shareholder resolutions in the annual proxy statement (of course certain conditions applied then and now).

Over time, this process became more sophisticated as many institutional owners put corporate equities in portfolios and steadily a certain number became activist investors. (

It really helped that the US Department of Labor leveraging ERISA statutes and rules  reminded US institutional investors that their proxy was an asset and voting was a clear responsibility of the fiduciary-owner.

In 1988, Assistant Secretary of Labor Olena Berg reminded pension fund managers of the “Avon Letter” that posited that corporate proxies are a pension plan asset and should be taken seriously and voted on.

One of today’s proxy voting / corporate governance experts with wide recognition and respect is California-based James McRitchie (principal of Corpgov.net).

In a communication to the US SEC in November 2018, he explained that he and other investors engage companies on ESG issues “to enhance their long-term value and to ensure corporate values do not conflict with the long-term interests of a democratic society.”

He suggested: “Corporations should welcome shareholders into the capitalist system as participants in major decision.”

In proxy season 2021, the “crisis stories” of 2020 and earlier years continue as public dialogue at least in the form of shareholder requests / demands / expectations of the companies that are in the portfolio on important societal issues.

Climate change action, racial justice/injustice, diversity & inclusion, inequality – these are high on the list for this year’s voting.

We have selected three Top Stories for you on the themes of 2021 voting. The not-for-profit Ceres organization, long active in ESG proxy voting issues, highlights the focus on science-based emissions reduction plans, and corporate policies aligned with the goals of the 2015 Paris Agreement. There are 136 climate-related shareholder-sponsored resolutions submitted to public companies as of April 2nd for 2021 voting.

The good news is that a number of these have been resolved in investor-corporate dialogues at Domino’s Pizza, Citigroup, JPMorgan Chase, and other firms. Others were withdrawn at Duke Energy, CSX, and Valero.

Climate-related themes for resolutions include “Banking on Low Carbon”, “Carbon Asset Risk”, and “Say on Climate”.

Long-time shareholder activist Tim Smith is Director of ESG Shareowner Engagement at Boston Trust Walden and member of the Ceres Investor Network. Ceres continues to track such resolutions and information is available at www.ceres.org.

The authoritative Pensions & Investments publication shares news about a new website — Majority Action’s “Proxy Voting for a 1.5 C World”.

Four key sectors are in focus: electricity generation, oil & gas, banking, and transportation, with summaries of corporate current emission targets, capital allocations and policy activity relate to climate change. (Reaching net-zero emissions by 2050 is an example of issue in focus.)

The web site offers recommendations for voting against director nominees at companies failing to implement plans “consistent with limiting global warming” by industry/sector.

In banking the web site names Wells Fargo, Goldman Sachs, and JPMorgan Chase. Issues in focus overall include Climate Change, Community Development / Investment, Gender Equality, and more.

Third – the Yield Positive web platform offers excellent background on shareholder resolutions and the current state of affairs following the dramatic events of 2020 – racial inequality highlighted by the killing of George Floyd; worker health and safety protections in the Covid pandemic; climate change issues – with examples of the resolutions coming up for vote in 2021.

These include Home Depot – Report on racism in the company; Target – Report on/end police partnerships; Wells Fargo – report on financing Paris Agreement-compliant GHG emissions cut, and more.

The 2021 spring season of corporate proxy voting and then the voting at company issues to Fall 20231 will be closely followed by business media and of course, the global investing community. We will continue to share news and perspectives about this annual exercise of “shareholder capitalism”.

TOP STORIES – April 2021

It’s Proxy Season 2021: Investors Focus on Climate Action

FYI