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Thursday, April 6, 2017

Strategic CSR - Climate policy

The article in the url below presents some statistics that suggest the Trump administration's efforts to turn back the clock on climate change will have little effect:
"'You cannot stop the momentum,' said Sacha Sadan, director of corporate governance for Legal & General Investment Management. … As an example of that trend, Mr. Sadan cited LGIM's launch in November 2016, of an index fund that will rank companies based on their environmental standards. HSBC Holdings invested 1.85 billion pounds in the fund, making it the default equity fund for its employees' defined contribution pension plan. According to the Global Sustainable Investment Alliance, climate change and carbon emissions was 'the most significant overall environmental factor' for socially-minded investors in the U.S., drawing allocation of $2.15 trillion in institutional investor assets in the year ended Dec. 31, 2015. Shareholder proposals focusing on the climate risk are also getting more support, even if none got majority approval over board opposition so far. According to Proxy Monitor, an arm of the Manhattan Institute's Center for Legal Policy that tracks resolutions filed with Fortune 250 companies, 23 of the total 58 environmental-related proposals as of the end of June, 2016, got 26% of the vote, compared with 16% support in 2015 and 14% in the 2006-2015 period. Also, five environmental resolutions received at least 40% support, a record number, said Proxy Monitor."
These data points are reinforced by an op-ed piece by Michael Bloomberg in the article in the second url below, which argues that the momentum (and, therefore, the ability to drive change) on this issue lies at the state and city level, rather than the federal level:
"In both red and blue states, cities — which account for about two-thirds of the country's emissions — are taking the lead in the fight against climate change. More than 130 American cities have joined the Global Covenant of Mayors for Climate and Energy, and all are determined to see that we meet our Paris goal. Their local policies — expanding mass transit, increasing the energy efficiency of their buildings, installing electric vehicle charging stations, creating bike share programs, planting trees, to name just a few — will help ensure we do."
This change, Bloomberg argues, is driven more by bottom-up stakeholder demand, rather than top-down ideology:
"Though few people realize it, more than 250 coal plants — almost half of the total number in this country — have announced in recent years that they will close or switch to cleaner fuels. Washington isn't putting these plants out of business; the Obama administration's Clean Power Plan hasn't even gone into effect yet. They are closing because consumers are demanding energy from sources that don't poison their air and water, and because energy companies are providing cleaner and cheaper alternatives."
Progressive companies recognize this and are not changing plans simply to reflect the fluctuating moods of politicians in Washington:
"This week, many of the 81 major corporations (including Apple and Wal-Mart) that signed a pledge in 2015 to reduce their emissions reaffirmed their commitments, and Anheuser-Busch InBev announced that it aims to get 100 percent of its energy from renewable sources by 2025. (My company is pursuing the same goal.) No mandate from Washington is forcing these companies to act — just their own self-interest."
Take care
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The Case for Climate Rick Investing in Trump Era
By Mara Lemos Stein
March 31, 2017
By Michael R. Bloomberg
March 31, 2017
The New York Times
Late Edition – Final