From climate change to deforestation, our world faces stiff environmental headwinds. The 25th annual SRI Conference featured a panel of investment professionals who discussed how investors are increasingly putting their money where their mouths are—divesting of companies involved in creating environmental problems, or actively engaging with companies as shareowners to encourage positive behavior change.
Andrew Logan is Director of Oil & Gas at Ceres, a coalition of institutional investors and public interest groups working with large public companies on a wide array of environmental and social issues. A key focus is engaging with the oil and gas sector around climate change. A key Ceres project is the Carbon Asset Risk Initiative, a coalition of investors that has targeted 45 fossil fuel companies with the goal of redirecting $680 billion dollars away from searching for more coal, oil, and gas reserves. The currently low global price of oil and gas is bringing market forces to bear on this effort—with noticeable effects.
Lucia Von Reusner is shareholder advocate for Green Century Capital Management, an environmentally responsible mutual fund company that avoids fossil fuel extraction companies and actively engages with portfolio companies around deforestation and other environmental issues. Green Century is a very actively engaged shareowner, and their advocacy efforts have yielded some substantial changes in company behavior.
In 2012, Green Century got coffee giant, Starbucks, to commit to sourcing 100% of its palm oil from certified sustainable palm growers by 2015. Pressure on the Kellogg Company, including a demonstration in Battle Creek, Michigan (the company’s home town), produced a similar result; Kellogg now requires all of its suppliers to provide certified sustainable palm oil. Wilmar, a Kellogg supplier, and a company that controls 40% of the global palm oil market, was so influenced by a 2013 shareholder letter that they announced a game-changing no-deforestation, no-peat-land-development, no-exploitation policy, which ran directly counter to their history of social and environmental transgressions.
GreenFaith is taking a slightly different approach to having the conversation about climate change within its community. "There is something that is frankly irresistible to people about the divestment argument and that is tremendously valuable,” Rev. Fletcher Harper explained. “It draws people in at an emotional level that they are otherwise not engaged on in climate issues."
Harper is Executive Director of GreenFaith, a national interfaith environmental coalition. His hope is to see an equivalent to the Sullivan Principles develop around the fossil fuel industry. He would like to see an emphasis equal to that of the divestment movement focused on reinvestment, particularly on clean energy for the developing world. “People are going to make massive amounts of money on the development of energy systems in [the developing world; so why not] learn something from the worker-owned movements to spread wealth while creating wealth?”
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Posted: January 12, 2015