May 29, 2014
No Surprise: Climate Change the Biggest Issue for Sustainable Investors
by Robert Kropp
A survey of eleven sustainable investors by Monitor Global Outlook reveals that while more
environmental and social shareowner resolutions have been filed in 2014 than ever before, the
number of withdrawals has set a record too.
The number of sustainable investment professionals surveyed recently by Monitor
Global Outlook, a service of the Christian Science Monitor, may be small, but the influence of
the eleven whose insights make up the report has been considerable.
professionals surveyed include Andrew Behar, CEO of As You Sow; Laura Berry, Executive Director of the Interfaith Center on Corporate Responsibility
(ICCR), as well as Rev. Seamus Finn, a member of the organization; Julie Gorte of Pax World Management; and Lloyd Kurtz,
co-faculty chair for the annual Moskowit
z Prize for Socially Responsible Investing and Chief Investment Officer at Nelson Capital Management.
Institutional Shareholder Services, the influential proxy
advisory firm, also participated in the survey, and told MGO that 428 environmental and social
shareowner resolutions were filed for the 2014 proxy season, the highest number ever. The 166
withdrawals thus far have also set a record, leading a number of those surveyed to observe that
companies have become more responsive to investor concerns on sustainability issues.
way that companies are coming to the table and actually talking – it looks like more than ever,”
Not surprisingly, participants rated climate change as the most pressing
issue for sustainable investors. “Activists argue companies aren’t doing enough to hold themselves
to measurable goals and timetables,” the report states, referring to a recent publication by Ceres that found that only 35% “have time-bound
targets in place for reducing greenhouse gas (GHG) emissions.”
The record number of
climate-related resolutions, Finn said, “shows a frustration with the political process and a sense
A new front in engaging with corporations on climate change has been the
number of resolutions addressing stranded assets, or the fossil fuel reserves that will have to
remain unburned if the worst effects of climate change are to be avoided. As You Sow withdrew a
resolution on the issue after ExxonMobil agreed to report to shareowners on the associated
financial risks. The report itself was disappointing, however, as the oil and gas giant contends
that the global demand for fossil fuels will result in all of its reserves being burned.
Berry described Exxon's response as saying, “OK, we’ll tell you everything we’re going to do,
and by the way, none of it has anything to do with making things better.”
risks are hampering sustainable investment in many parts of the world, the survey respondents
stated, with the Middle East being the most worrisome region. Conditions in Central and South
America have improved, however; on the other hand, Finn observed in relation to the rights of
indigenous peoples, “Just when I think Brazil is doing better, I get a lot of push-back from
colleagues saying, ‘Not quite so.’ ”
Another positive development, the investors say, has
been the response of apparel companies to the tragedy in Rana Plaza, Bangladesh, last year, when
more than 1,000 died as the result of a building collapse. Nearly 200 companies have “joined
compacts holding them and their supply chains to higher standards,” the report states.