December 31, 2011
Top Sustainable Investment Stories of 2011
by Robert Kropp
Many sustainable investors see affinities between their concerns and those of the Occupy Movement,
and global emissions from the burning of fossil fuels in 2010 were the highest in human history.
2011 may not have yielded stories as galvanizing as those of 2010, when the Supreme Court ruled in
favor of corporate personhood and the BP oil spill caused widespread devastation in the Gulf of
Mexico region. But in addition to the important stories described below, a number of developments
of interest to sustainable investors deserve recounting and will be followed closely in 2012:
Adopts Rules for Say on Pay
Despite Court Ruling,
Opportunity for Proxy Access Remains
Index Ranks Companies on
Political Spending Disclosure
What Happened at COP17?
The top stories of 2011:
5. EPA regulates emissions from power plants.
A top story from 2010 was the failure of Congress to act on climate change, despite passage by
the House in 2009 of the Waxman-Markey climate change bill. 2011 saw no further action by Congress
on the issue, despite the overwhelming consensus of climate scientists. In fact, as we enter an
election year, almost all Republican presidential candidates either question whether global warming
is due to human activity, or flatly deny the reality of climate change.
Despite attacks on
its authority to regulate greenhouse gas (GHG) emissions, the Environmental Protection Agency (EPA)
issued two important regulations in 2011 that together could prevent up to 46,000 premature deaths,
540,000 asthma attacks among children, and 24,500 emergency room visits and hospital admissions.
In June, EPA finalized the Cross-State Air Pollution Rule (C-SAP), which requires that 27
states in the eastern US reduce power plant emissions that contribute to pollution in other states.
And in December, the Agency issued its final Mercury and Air Toxics Rule for Power Plants,
requiring power plants to install pollution control equipment that will reduce emissions of mercury
in the US by 99%.
EPA Regulations on Emissions
EPA Finalizes Cross-State Air
EPA Issues Rule on Mercury Emissions
from Power Plants
4. UN Human Rights Council endorses Guiding Principles on Business
and Human Rights.
The effect on corporate social responsibility (CSR) remains to be seen
for the most part, but in June the United Nations Human Rights Council took a step toward
enshrining the social responsibility of businesses by endorsing the Guiding Principles on Business
and Human Rights authored by Professor John Ruggie, the UN Secretary-General's Special
Representative for Business and Human Rights (UNSRSG).
Described by Rev. David Schilling,
the director of human rights for the Interfaith Center on Corporate Responsibility (ICCR), as a
"significant breakthrough and an indispensible resource for investors in assessing the human rights
performance of companies," the Guidelines state that "Business enterprises…should avoid infringing
on the human rights of others and should address adverse human rights impacts with which they are
"In order to meet their responsibility to respect human rights," the Guidelines
continued, "Business enterprises should have in place…A policy commitment to meet their
responsibility to respect human rights; a human rights due-diligence process…and processes to
enable the remediation of any adverse human rights impacts they cause or to which they contribute.
Business enterprises need to know and show that they respect human rights."
have successfully engaged already on the issue of corporate adherence to the Principles. In
December, the Jesuit Conference of the United States announced that its four-year engagement with
OM Group has resulted in the adoption by the company of a human rights policy for its employees,
including miners at its cobalt smelter in Lubumbashi, Democratic Republic of the Congo (DRC). A
shareowner resolution requesting that OM Group develop a human rights policy that conforms with the
Guiding Principles gained 43% of the shareowner vote at the company's annual general meeting.
Principles on Business and Human Rights are Published
UN Human Rights Council Endorses
Guiding Principles on Business and Human Rights
Shareowner Engagement Leads to
Adoption of Human Rights Policy at OM Group
3. Shareowners rally over issue of
Since 2009, when shareowners filed the first of 21 resolutions that
by 2010 had gained an unprecedented 40% support, concerns over the impacts of hydraulic fracturing,
or fracking, have gone mainstream. Risks associated with contamination by toxic chemicals of
community drinking water supplies, the disposal of massive volumes of wastewater, and increased air
emissions have been widely covered in the media, threatening the social license to operate of
companies engaged in the controversial practice of natural gas extraction.
Liroff, executive director of the Investor Environmental Health Network (IEHN), told
SocialFunds.com, "There's a moratorium in the Delaware River Basin, there's been a moratorium in
New York State, there's a moratorium in the Province of Quebec. There is a ban in France, there is
a moratorium in South Africa, and there is a moratorium in the New South Wales state in Australia."
In 2011, the Securities and Exchange Commission (SEC) began requesting that oil and gas
companies provide it with detailed information on their fracking practices, including the often
toxic chemicals used. "Government officials said the SEC's interest in fracking is in ensuring
investors are being told about risks a company may face related to its operations, such as
lawsuits, compliance costs or other uncertainties," a Wall Street Journal article reported.
And in December, EPA released its 121-page draft analysis assessing groundwater quality and
identifying potential sources of contamination in Pavilion, Wyoming. EPA's analysis determined that
fracking was responsible for contaminating the groundwater in the community.
December, ICCR and IEHN published an Investor Guide to help increase corporate disclosure and
mitigate the impacts of fracking.
Several shareowner resolutions requesting better
disclosure of risks associated with fracking have already been filed for the 2012 proxy season.
Support for Environmental Resolutions Continues to Grow
SEC Considering Oversight of Hydraulic
EPA Finds Drinking Water Tainted by
Investors Provide Guidance for
Companies Engaged in Hydraulic Fracturing
2. Global emissions break records in 2010.
A report by scientists at the Global Carbon Project found that during 2010, global
emissions increased 5.9%, one of the largest growth rates in the past decade. Atmospheric
concentration of CO2 is now 39% higher than it was at the start of the Industrial Revolution, and
is the highest during at least the last 800,000 years. The absolute emissions from the burning of
fossil fuels in 2010 were the highest in human history.
The increase followed a 1.9%
decline in global emissions in 2009, which was attributed to reduced economic activity in the
aftermath of the financial crisis.
In October, a coalition of 285 institutional investors
representing more than $20 trillion in assets issued a Global Investor Statement on Climate Change.
The Statement recommends that effective and well-designed domestic policies provide long-term
certainty in order that appropriate incentives for private investment exist. It also calls for a
binding international policy on climate change and funding mechanisms to bring climate-related
investment to the necessary scale.
Although the burning of coal was responsible for more
than half of emissions in 2010, a BankTrack report found that financing by banks for new
construction of coal-fired power plants has totaled $313.5 billion since 2005. Most of the banks
providing financing are signatories to the Equator Principles, and have publicly committed to
managing environmental and social risks in their project finance transactions.
new coal-fired power plants now scheduled for construction come on line, the report warns, their
lifetime emissions will equal those of all coal-burning activities since the beginning of
Investors Managing $20 Trillion in
Assets Call for Climate Change Policies
BankTrack Names Banks Funding Dirty
Coal Power Plants
Global Emissions Break Records in
1. Are Occupy Wall Street and sustainable investment aligned?
first time in decades, demonstrators took to the streets of US cities in large numbers. The primary
focus of the protesters is the deepening inequality that threatens to become a permanent
institution in American life.
Given that the voices of the movement are the voices of key
stakeholders on whose behalf sustainable investors engage with corporations and policymakers, the
alignment of concerns and goals between the two communities seems natural, if not inevitable. In
October, Boston-based Zevin Asset Management issued a statement which said, "As socially
responsible investors, we seek the same goals as those protesting."
demonstrates the rich have gotten richer at the expense of the middle class, the working poor, and
the unemployed," the statement continued.
Several other sustainable investment firms soon
followed Zevin's lead. And in November, Lisa Woll of US SIF: The Forum for Sustainable and
Responsible Investment stated, "The Occupy movement occurring across the country, and indeed,
around the world, speaks to many of the issues and concerns raised by sustainable and responsible
investors over the past several decades-- and particularly since the unfolding of the recent
An analysis by the Economic Policy Institute (EPI) provided fodder for
the protestors and shareowner activists, by finding that the top one percent of the US population
now controls one-third of the nation's wealth.
Furthermore, according to EPI, the
wealthiest 20% of Americans now hold 87.2% of wealth, and the net worth of the top one percent is
225 times greater than the median.
How Occupy Wall Street and Sustainable
Investment are Aligned
More Fodder for Uprising Against
Zuccotti Park Cleared of Occupy
Finally, two important investor organizations celebrated anniversaries in
2011. ICCR celebrated 40 years of shareowner action, stretching back to apartheid in South Africa
and forward to such concerns of today as human trafficking, the rights of indigenous persons and
workers, militarism, the environment, and fair access to capital.
And the UK Sustainable
Investment and Finance (UKSIF) used the 20th anniversary of its founding to produce a report
entitled Taking Responsibility: Achieving Resilience, that looks back on the growth of sustainable
investment in the UK while acknowledging that its "task is only just beginning."
next 20 years, sustainable investment and finance will move even further center stage as the world
faces the challenges of moving to a resilient and resource-efficient society," the report states.
Reflects on Twenty Years of Growth in Sustainable Investment
ICCR Celebrates Forty Years of