July 02, 2013
Ceres, ICCR Offer Guidance for Sustainable Investing
by Robert Kropp
The Interfaith Center on Corporate Responsibility provides insights for investors on climate
change, and Ceres issues a blueprint for investors seeking to incorporate sustainability into their
decision making. First of two parts.
SocialFunds.com --
President Obama recently made a major speech on climate change and the effect seems to be that the
issue has finally moved squarely to the center of public attention. In addition to the reductions
in the nation's emissions that the regulatory actions outlined promise, the speech may well help
the sustainable investment agenda gain even more widespread adoption.
If mainstream investors are casting
about for a place to start, they could do far worse than look to two of the sustainable investment
organizations that have done as much as any to make the case for sustainability. Both Ceres and the Interfaith Center on Corporate Responsibility (ICCR) have recently
published texts to help investors incorporate sustainability into their decision making.
The four
pages of insights published by ICCR provide some background on the issue of climate change, and
states plainly, �the primary responsibility for controlling greenhouse gas emissions clearly lies
with global policymakers.� Which is not to say that investors in their roles as activist investors
do not have leverage. �As early as 1992 ICCR members began to use their leverage as shareholders to
forcefully engage the fossil fuel industry and other GHG-heavy sectors in an effort to curb
emissions and forge new paths towards a green economy,� the paper states.
ICCR points out
that despite the decades of shareowner action companies in the fossil fuel industries fail to
account for climate change in their business plans and oppose government action that introduce a
carbon tax or mandate reductions in GHG emissions. It is such intransigence in the face of
scientific consensus that has helped the fossil fuel divestment campaign begun by 350.org last year to capture the attention of so
many.
But according to ICCR, shareowner engagement is the most effective way to influence
corporate behavior. �To divest is to relinquish those shares to another owner who may not be
practicing active ownership,� the paper states. �This approach, in effect, serves to strengthen
management control. ICCR members advocate for amplifying our collective voice by bringing more
shareholder advocates to the table � that is, we support engagement.�
�However,� ICCR
acknowledges, �Divestment may be appropriate when a company with egregious practices has failed to
respond to a long-term engagement or when an organization has exhausted its available resources to
continue to engage a company effectively.�
�If investors determine to divest as a last
resort, we urge them to raise the public visibility of their decision and the reasons for it.�
The paper documents the various engagement strategies and significant accomplishments of ICCR
members and other sustainable investors�familiar to readers of SocialFunds.com, but the inclusion
of which is necessary for raising awareness among mainstream investors�as well as developing
strategies addressing such issues as stranded assets and the human rights impacts of climate
change.
�The majority of the energy sector remains mired in its old model and demonstrates
through its actions that it is in apparent denial of the terrible price future generations will pay
for its resistance to reform and/or to conform to measures that can produce change,� ICCR
concludes. �In the absence of a more stringent GHG policy to enforce reductions, it is our
responsibility as concerned investors to use our leverage to intervene wherever and whenever we
can. There is no doubt that bolder, more creative strategies are required.�
For many of
the faith-based members of ICCR, �Where there is disagreement, we must be in discussion to hope for
resolution. For that reason, as shareholders, we remain engaged with the companies we hope to
change.�
Next: Ceres offers a blueprint for sustainable investment.
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SRI World Group, Inc. All Rights Reserved.
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