True to form, the
2003 CERES conference delivered two days of accomplishment and promise.
Subtitled Advancing Sustainable Governance, its agenda
concentrated on the organizations leadership in converging
the best practices of corporate business with those of environmental
responsibility. Prior focuses of activity such as the Global Reporting
Initiative were joined by some new programs.
This year, in partnership with the Association of Chartered Certified
Accountants (ACCA), CERES launched the first U.S. Sustainability
Reporting Awards program to emphasize the value of reporting as
a first step to corporate progress on economic, environmental and
social issues. Its goal was to encourage better reporting on sustainability,
reward best practices, provide guidance to others and increase accountability.
The focus of the awards was on the highest degree of disclosure,
transparency of business practices and communication effectiveness.
(See sidebar for information on award winners.)
CERES executive director Mindy Lubber explained the importance of
reporting as a first step to corporate progress on environmental
and social issues. At CERES weve found that what gets
measured gets managed, and that reporting on these issues is a way
for companies to assess where they stand, what the issues are, and
where they need to make improvements, Lubber said. A
decade ago, you wouldnt find this information anywhere, and
certainly not from the companies themselves. Weve come a long
way, but still have a long way to go to the point when providing
this information is standard practice.
Another first announced at the conference is likely to have profound
ramifications. Four state and city treasurers and comptrollers,
representing approximately $190 billion in assets, expressed concern
about the risks of climate change to long-term investments and announced
plans to hold a summit with other institutional investors to examine
the issue. Denise Nappier, treasurer, State of Connecticut; William
C. Thompson, Jr., comptroller, City of New York; Alan Hevesi, comptroller,
New York State; and Jeb Spaulding, treasurer, State of Vermont,
all expressed concern that global warming posed long-term economic
risks that threatened the value of retirement funds.
Recent corporate scandals, the resulting drop in investor confidence
and growing support for global warming shareholder resolutions have
created an opportunity to convene this historic gathering. Foundations,
unions, money managers and property insurance companies will join
the representatives from the state pension funds in a series of
meetings. Nappier, Thompson and Hevesi have indicated that the funds
they represent would likely vote their proxies in favor of shareholder
resolutions filed this year. With close to $200 million on the table,
a figure that is estimated to double within the next 12 months,
this represents a hefty block of influence.
All funds, but particularly pension funds, have a responsibility
to their shareholders to ensure that theyre adequately assessing
risk in their portfolio companies, Nappier said. These
resolutions should serve as a notice that we will not tolerate irresponsible
corporate behavior that could potentially undermine the integrity
and soundness of our pension funds and the health of our planet
and its people. We need to pull corporate Americas heads from
the sand and look at this obvious long-term risk. In my view, institutional
investors are in a position to lead that effort. CERES will
work with the investors to convene the summit sometime in the next
six to nine months.
According to many of the CERES conference speakers, climate change
is the next big thinga threat more potent than Y2K, for example.
Other challenges include shortages of potable water and preserving
the wilderness in an increasingly urban world. Solving these problems
cannot be accomplished by corporations alone; a change in government
policy will be required and its going to take elections to
make that happen. Others criticized the current administration for
refusing to face its responsibilities. Denis Hayes, the president
of the Bullitt Foundation and a co-founder of Earth Day, admonished
President Bush for not getting it and then named some
of the corporations who do: DuPont, BP, Shell, Johnson & Johnson,
IBM, Toyota and Honda.
Mark van Putten, president and CEO of the National Wildlife Federation,
believes that theres plenty of money to be made in finding
solutions to the global climate change problems. Bruce Ralston,
chair of the Vancouver City Savings Credit Union, Canadas
largest, agrees and states that running a corporation in a sustainable
and equitable way in this post-Enron world can be a differentiation.
California Resources secretary Mary Nichols feels that smaller,
entrepreneurial firms are ahead of the larger firms who tend to
act like governments.
CERES is successful because it convenes people in power and empowers
them to invest in change. The Sustainability Reporting Awards program
has, for example, made CEO statements more meaningful, prioritized
performance indicators, disclosed how stakeholders are involved
in the reporting process, disclosed public policy positions, addressed
sustainability as a governance issue, improved verification procedures
and enhanced the user friendliness of Web-based reports. CERES is
making a difference inside the board room and out, or as former
CERES executive director Bob Massie put it, You never know
what were going to be able to pull off.
Nineteen companies submitted reports
and the judges presented awards in three categories in the
first annual U.S. Sustainability Reporting Awards, a joint
project of CERES and the Association of Chartered Certified
Joint Winners-Outstanding Sustainability
* Ben & Jerrys Homemade,
Inc. was singled out as being unique for dealing with the
issues of CEO compensation and livable wages in developing
countries. Long-admired for its environmental commitment and
as the first publicly-traded company to issue a report, Ben
& Jerrys sets an example for small- and medium-sized
companies, said the judges, and captures the feel and
scope of sustainability, both in the balance of social, environmental
and economic coverage, as well as the balance of vision, policy
and management systems and performance information.
* Chiquita Brands International,
Inc., once the target of environmental criticism, impressed
the judges with its willingness to openly discuss the companys
challenges and areas for improvement. Directness in addressing
the environmental impacts associated with its
business, including pesticide use and
toxicity, waste management, conservation of water resources
and soil conservation were factors that influenced the
selection. Using third- party certification and performance
standards, Chiquita tightly managed the report process and
* Bristol Myers Squibb Co. not
only assessed its corporate environmental performance, but also
its system for collecting and reporting data. Driven in part
by its customers and investors need for responsible
data, the company has also used the report to hire and retain
top-notch employees. The judges noted that the report is Web-based
(with over 65,000 hits in just two months), is easy to navigate
and has effective search and indexing functions. Making the
point that reporting is time-consuming and expensive, Bristol
Myers Squibb estimated that the effort required one-half of
a fulltime staffer for one year.
Commendation for Environmental Reporting
* Advanced Micro Devices, Inc.
(AMD) began its reporting in 1995 in response to employee interest
and to be able to provide information to investors with a high
level of detail. Its report addresses such core environmental
issues as climate change, energy conservation, toxic chemicals
management and product stewardship including take-back issues,
a subject of vital importance in the electronics industry. The
judges liked that its Web site provides links to other reports
such as AMDs annual report, TRI information and a global
climate protection plan.
Outstanding First Time Reporting
* Wisconsin Energy Corp. not only
names the staff responsible for its oversight, implementation
and audit in its report, but identifies its stakeholders and
its approaches to stakeholder interactions. The company believes
that reporting builds credibility
especially in the hot issue areas of coal
and nuclear power. The jury believed that WEC effectively
and thoroughly applied the Global Reporting Initiative (GRI)
guidelines and included a GRI contents index for easier location
of each GRI indicator.