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March 25, 2013
After Double-Checking the Definition of Plutonic
    by Robert Kropp

Encouraged by a morning's reading of recent posts in Peter Kinder's excellent blog The Bell, a writer meditates upon the uncertain finish to the race between sustainability and overconsumption of resources.


In a long poem I composed this weekend, I attempted to capture the challenge to sustainable investors. Playing on my laptop while I wrote in longhand was Paul Hindemith's Sonata for Solo Cello, and I wrote:

"…a work of
West European existentialism in the midst of
that continent's most tragic century.
A work befitting a mantra of struggle
a struggle depicted and a struggle to depict.
As are the efforts of sustainable investors
to yoke together the disparities
of justice and finance…"

Equivalent to my personal struggle as well, I surmised further. When I started writing journalism for SocialFunds.com five years ago, there were days when I had to scramble to come up with even a news brief. Such a challenge doesn't exist anymore. The ease with which I now find topics on which to write may have something to do with a marginally greater understanding of what the sustainable investment community is about; but it's more the case, I believe, that the tenets of sustainable investment have infiltrated the mainstream. Not enough to change the world quite yet, but the conversation is expanding its territory.

Recently I toted up the number of articles I have written for SocialFunds.com, counting in excess of 1,300. Probably three quarters of a million words or so, I concluded. There must be a book in there.

I wouldn't want to reproduce a collection of articles as a book, nor do I possess the hubris to believe that such a collection would be of enduring interest. Recalling the many interviews that I've conducted with thoughtful and engaged representatives of the sustainable investment movement, I think that a modern history of the movement could hold some value. But where would the narrative lead?

A recent report by the Governance & Accountability Institute revealed that sustainability reporting by S&P 500 companies increased from just 19% to more than half in the past year alone. Investors affiliated with the Carbon Disclosure Project (CDP) successfully pressure global corporations to report meaningful data on greenhouse gas (GHG) emissions and water use, while signatories to the United Nations' Principles for Responsible Investment (PRI) aspire to incorporate environmental, social, and corporate governance (ESG) factors into their investment decision-making.

And the Interfaith Center on Corporate Responsibility (ICCR) proudly points to the fact that its members now engage in more dialogues than file shareowner resolutions as evidence that corporations are increasingly embracing the messages of sustainability and social justice.

But annual global emissions continue to set records while major corporations in the fossil fuel industries continue to enjoy success in the world's stock markets, and there is still no binding international agreement to address what is perhaps the greatest challenge humankind has had to face. Crimes against humanity by the government of Sudan continue, while many institutional investors continue to agree with the management of mutual funds that recommends a vote against resolutions calling for genocide-free investing.

Sustainable investors know they cannot right the world's many wrongs by themselves, and in the US look to regulators and Congress to make their efforts less quixotic. They have found too little assistance there. The Attorney General himself has described the nation's largest banks to be off-limits for prosecution, not because of any presumption of innocence but because criminal charges against them might destabilize an economy they effectively left in ruins five years ago. And despite the mandate imposed upon them by the Dodd-Frank Act, the Securities and Exchange Commission (SEC) and other regulators have yet to implement the Volcker Rule, which would at least curb the practice by banks of gambling with taxpayer-insured deposits for their own pecuniary advantage.

I'm a journalist, not an investment professional, and don't know exactly what sustainable investors can do about such matters beyond the filing of shareowner resolutions and engaging in dialogues with corporations. But I do know that climate change, overconsumption, and wealth inequality have struck chords with elements of society that don't have to worry about what fiduciary duty entails. Emboldened by an article in Rolling Stone authored by Bill McKibben of 350.org, students on campuses across the country are calling on their colleges and universities to divest the holdings of their endowments in fossil fuel companies.

And Occupy the SEC (OSEC) has filed a lawsuit against six federal regulators—the Federal Reserve, the SEC, the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the US Treasury Department—requesting that the Court compel the defendants to issue a final Volcker Rule.

I observed earlier in whatever this is that sustainable investors know they cannot do it themselves, but they must be commended for their vision and their perseverance. But the regulators to whom they turn for help too often seem mired in bureaucracy, while the legislative bodies seem part of the problem and not a party to sustainable solutions. What is to be done?

As I do every morning when his email alerts me to a new post, I took a few minutes this morning to read The Bell, a blog authored by Peter Kinder. Peter is renowned in sustainable investor circles for being the cofounder of KLD Research & Analytics, considered the first investment analysis firm to incorporate ESG factors. More often than not, his blog has little to do with the world of investment. But it does have much to do with envisioning a better world.

And in that is a lesson, I think, about the transformative capacities of individuals.

 

 
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