January 04, 2013
Top Sustainable Investment Stories of 2012, Part 4
by Robert Kropp
Will the re-election of Barack Obama help further the sustainability agenda? Despite legislative
inaction by Congress, regulatory agencies issued rules addressing climate change and corporate
governance in 2012.
As much as too many climate deniers in Congress wish it were otherwise, climate change is the
single most important sustainability issue confronting us today, as Hurricane Sandy reminded us in
2012. That it was barely mentioned by the Presidential candidates during the 2012 election campaign
defies reason. Although Barack Obama's record on climate change has not been all that
environmentalists wish for, at least the candidate who won doesn't waffle over whether human agency
has anything to do with global warming and extreme weather events.
candidate Mitt Romney, on the other hand, stated in 2011, "My view is that we don't know what's
causing climate change on this planet." That the percentage of Americans who believe that climate
change is real increased by 13% over a two-year period, and is now 70%, may have been a
contributing factor to Romney's defeat. Furthermore, more than half of Americans believe that human
activity is the primary cause of climate change.
During Obama's first term,
ambitious fuel economy goals were established. The 2009 economic stimulus provided an estimated $90
billion for renewable energy technologies, and wind energy in particular has accounted for a
significant portion of new energy installations since then.
Also, as a result of this
week's last-minute legislation addressing the so-called fiscal cliff, the wind energy Production
Tax Credit (PTC) was extended. According to the American Wind Energy Association (AWEA), the PTC
"drives up to $20 billion a year of private investment into US wind farms, creating demand that
allows US manufacturing to compete in a global market." Business and investor networks such as Business for Innovative Climate and Energy Policy
(BICEP) and the Investor Network on
Climate Risk (INCR), both of which are coordinated by Ceres, called for the extension of the PTC.
campaign, the Obama administration called on Congress to extend the credits, while Romney said he
wanted them to expire.
So while most sustainable investors probably got the President they
wanted, their expectations for action on transitioning to a low-carbon economy are high. Mindy
Lubber, President of Ceres, stated, "Ceres calls on President Obama and Congress to expand clean
energy with the goal of 20% renewable energy by 2020 and 30% by 2030; reduce greenhouse gas
emissions to levels that avoid the worst impacts of climate change; and build the resilience of our
communities as they prepare for more pronounced extreme weather, such as last week's devastating
"We cannot afford more delays," Lubber continued. "We need action now."
Expiration Looming, Groups Call for Extension of Production Tax Credit
Climate Change Action in Obama's
On social issues such as health care and growing income inequality, the
differences between the candidates were even starker. One issue that Obama fought for relentlessly,
with the widespread support of the sustainable investment industry, has been health care. The
Affordable Care Act, passed in 2010, will extend health insurance coverage to tens of millions of
While Romney was governor of Massachusetts, he signed into law a health care
law similar in many respects to what is now widely known as Obamacare. As a Presidential candidate,
however, he said he would repeal the Affordable Care Act on day one of his term.
subject of financial reform, sustainable investors spoke out loudly in support of the Dodd-Frank
legislation that attempted to return a semblance of a regulatory framework of a financial industry
that by causing the financial crisis clearly demonstrated its inability to govern itself. When the
President signed the legislation in 2010, he said, "Our financial system only works—our market is
only free—when there are clear rules and basic safeguards that prevent abuse, that check excess,
that ensure that it is more profitable to play by the rules than to game the system."
Romney, on the other hand, stated his intention to "repeal and replace" Dodd-Frank.
wealth inequality, a leaked video caught Romney writing off 47% of the American electorate as
believing "they are victims" and thus entitled to the largesse provided by government programs. He
supported lower tax rates for the wealthy and on capital gains.
Obama's support for higher
tax rates for the wealthiest Americans became law with passage of the fiscal cliff legislation.
Charged with Ethics Violation for Failing to Disclose Hedge Fund Investment
Quash Findings on Wealth Inequality
For Sustainable Investors, Obama or
Despite the absence of meaningful legislative activity addressing climate
change, the Environmental Protection Agency (EPA) under Lisa Jackson battled industry trade groups
such as the US Chamber of Commerce to enact rules governing emissions. The Agency established new
rules for mercury emissions and greenhouse gas (GHG) reporting from the largest emitters. It also
issued regulations on fine particle pollution.
And along with the Department of
Transportation (DOT), EPA finalized new fuel efficiency standards for cars and light-duty trucks on
Tuesday, mandating an average of 54.5 miles per gallon by 2025.
Also in 2012, the
Securities and Exchange Commission (SEC) adopted rules mandating disclosure by companies on two
issues of critical importance for global social justice. Disclosing Payments by Issuers Engaged in
Resource Extraction requires companies in the oil and gas and mining sectors that are engaged in
resource extraction in resource-rich countries to disclose their payments to governments.
And Disclosing the Use of Conflict Minerals requires US corporations to disclose whether their
products contain conflict minerals, including tantalum, tin, gold, and tungsten, which have been
smuggled out of the Democratic Republic of the Congo (DRC). Armed groups use payments for them to
fund a conflict which has resulted in the loss of more than five million lives.
associations including the US Chamber of Commerce and the American Petroleum Institute (API) filed
lawsuits seeking to overturn the rule governing disclosure of payments to governments. In advance
of a court hearing, the SEC refused the trade associations' request for a stay of the rule. The
trade associations failed to adequately demonstrate that implementation of the rule would cause
"irreparable harm" due to the cost of compliance, and their argument that it would result in
competitive disadvantage for US companies was, the Commission stated, "speculative and unsupported
SEC Issues Rules on Conflict Minerals
and Payments to Governments
Fuel Efficiency Standards
SEC Refuses to Delay Extractives
EPA Finalizes Standards for Soot