The New Metrics of Sustainable Business
Trends and Tremors in the Sustainable Investing Landscape
The New Metrics of Sustainable Business 2013
Paul Herman, HIP Investor, Inc.Joy Poland, Building Bridges,
LLCBart Houlahan, B LabStephen J. Donofrio, CDP North AmericaBill
Baue, Corporate Sustainability Architect
TrendsTremorsToolsCONFIDENTIAL 2006-2013 HIP Investor Inc. 2
80% of Market Value = Intangiblewww.AgeOfVolatility.com
2006-2013 HIP Investor Inc. 383%68%32%20%20%17%32%68%80%80%
2006-2013 HIP Investor Inc. 4
Ocean Tomo Patent ETF (OTP)Intangibles Index Beats S&P500
(12/29/06 to 3/05/12)
+7.7%-3.9%
FUTURERISK, UPSIDECONFIDENTIAL 2006-2013 HIP Investor Inc. 5
ESG in Each Asset Class StillRipe for Sustainability
PortfoliosCONFIDENTIAL 2006-2013 HIP Investor Inc. 6Source: Mercer
ratings
How Much Carbon Do You Own?CONFIDENTIAL 2006-2013 HIP Investor
Inc. 7Fund Tons of CO2 = 2602Fund Tons of CO2 = 778
Note 2 Values as of 6/30/2013
7
IMPACT-RATED MUNI BONDSCity of Seattle = 72%15 of possible 25
WEALTH points forMedian IncomeAffordability of HousingVacant
HousesUnemploymentPoverty
24 of possible 25 EARTH points forCommuting Method and
Duration17 of possible 25 HEALTH points forObesity/DiabetesCrime
RateGraduation RateHealth Insurance Coverage75%16 of possible 25
EQUALITY points for Gender Diversity & Ethnicity Reflected in
Business Ownership72%
8
IMPACT-RATED BONDSCONFIDENTIAL 2006-2013 HIP Investor Inc.
9Seattle Public Utilities Wastewater = 59%15 of possible 20 HEALTH
points forSewer Overflow management34 of possible 60 EARTH points
for Treatment techniquesSeparated pipesBiosolids practices5 of
possible 10TRUST points for3rd Party certifications59%5 of possible
10 EQUALITY points for Gender diversity on the board and executive
management
9
CONFIDENTIAL 2006-2013 HIP Investor Inc. 10
* Past 5 years, as of 8/31/2013; HIP Scores (2011/12)Source: XYZ
401(k); Morningstar; HIP Investor ScoresTOP 50 Funds (ETFs)RETURNS:
Annualized 5- Yr Returns*RISK Standard Deviation of 5-Year
Returns*VALUE: size of circles relative to $ Invested in
FundIMPACT: color of circles: Green = higher IMPACTYellow = medium
IMPACTRed = lower IMPACT
CONFIDENTIAL 2006-2013 HIP Investor Inc. 11
RETURNS: Annualized 5- Yr Returns*RISK Standard Deviation of
5-Year Returns*VALUE: size of circles relative to $ Invested in
Fund
IMPACT: color of circles: Green = higher IMPACTYellow = medium
IMPACTRed = lower IMPACT* Past 5 years, as of 8/31/2013; HIP Scores
(2011/12)Source: XYZ 401(k); Morningstar; HIP Investor ScoresTOP
ETFsIndustry-Sector
CONFIDENTIAL 2006-2013 HIP Investor Inc. 12
RETURNS: Annualized 5- Yr Returns*RISK Standard Deviation of
5-Year Returns*VALUE: size of circles relative to $ Invested in
Fund
IMPACT: color of circles: Green = higher IMPACTYellow = medium
IMPACTRed = lower IMPACT* Past 5 years, as of 8/31/2013; HIP Scores
(2011/12)Source: XYZ 401(k); Morningstar; HIP Investor ScoresTOP
ETFsFixed Income
CONFIDENTIAL 2006-2013 HIP Investor Inc. 13
RETURNS: Annualized 5- Yr Returns*RISKStandard Deviation of
5-Year Returns*VALUE: size of circles relative to $ Invested in
Fund
IMPACT: color of circles: Green = higher IMPACTYellow = medium
IMPACTRed = lower IMPACT* Past 5 years, as of 8/31/2013; HIP Scores
(2011/12)Source: XYZ 401(k); Morningstar; HIP Investor ScoresTOP
ETFsEquities
CONFIDENTIAL 2006-2013 HIP Investor Inc. 14
CONFIDENTIAL 2006-2013 HIP Investor Inc. 15
Billion+ IMPACTMillion JOBSTrillion $ MARKETCONFIDENTIAL
2006-2013 HIP Investor Inc. 16
Building Bridges Joy PolandBuilding More Value + Profit:The
Rhode Island MVP Program
17Slide 1We created a program in RI - collaboration with the RI
state society of CPA's, Providence College, HIP Investor/ SNW asset
Management and a group of other business thought leaders called THE
MVP MORE VALUE & PROFIT PROGRAM WHOLE PREMISE TO PROGRAM BY
LOOKING AT THESE INTANGIBLES, SUSTAINABILITY ISSUES, AND
SUSTAINABILITY STRATEGIES WE CAN CREATE MORRE VALUE & PROFIT
FOLL ALL COMPANIES BOTH PUBLIC AND PRIVATE
Tremors
Flying in the fog of False Estimates of real corporate value is
a threat of planetary proportions. These can be fixed with
fundamental shifts in measurement, reporting and rating
companies.Allen White, (Guardian Professional) February, 2013
Answer: Bridge the GAAP
18Allen L Whiteis vice president of theTellus Institute,
co-founder of the Global Reporting Initiative, and founder of
theGlobal Initiative for Sustainability Ratings GOES ON TO SAY
Change is happening, but not fast enough. The collective voice of
enlightened business, civil society, and government is needed to
accelerate this necessary transformation. The planet's, and
society's, patience is not limitless.
threats like environmental costs not being not factored into the
value of companies - and litigation prone industries - fines etc
they are obvious threats and we all know in this room that these
false estimates of value can be fixed with a shift in measurement,
reporting and ratings but from our perspective the threat that we
perceive to this movement and what is preventing it from changing
fast enough because the is a sense of urgency with this - is the
lack of understanding about the relevance of sustainability issues
intangibles, new metrics etc on the privately-held business and the
lack of understanding by mainstream to how these issues are
directly impacting our personal lives it is our belief that these
factors/issues etc AFFECT ALL BUSINESSES EVEN ORGANIZATIOONS
NON-PROFITS there has to be a deeper penetration into mainstream
CPAs and Financial ADVSIORS specifically ABOUT THE RELEVANCE AND
THE IMPLICATIONS THAT THESE INTANGIBLES MEAN TO BUISINESS THIS CANT
JUST BE ABOUT PUBLICLY-TRADED COMPANIES and Shareholders it has to
be about stakeholders which is all of us
For example I see the financial institutions listed as sponsors
to these types of events however on the street so to speak the
average financial planner wealth advisor, that are affiliated or
registered with these entities do not know what ESG stands for ?
Does not know what sustainable/impact investing is? And the ones
that do think they know automatically assume it is SRI socially
responsible investing which is really a completely different
concept - There are so many mandated venues for advisors, CPAs that
they must participate in for CPE that we could be delivering this
information but it is not happening
Privately held businesses AND MOST cpaS think that these issues
do not pertain to them CLICK SO THE ANSWER TO US IS THAT WE HAVE TO
BRIDGE THE GAAP
There is a huge disconnect between the relevance and
understanding of the implications of this to the privately held
business. SO FOR US THE THREATS ARE ABOUT CONNECTION COMMUNICATION
OF THIS TO MAINSTREAM AND HENCE THE GENESIS OF THIS mvp PROGRAM We
have to bridge the GAAP so to speak if we want to success in this
movement. BRIDGE THE SECTORS AND BRIDGE THE GAP TO THE CONSUMER
we have to do a better job about educating the consumer - the
consumer HAS TO BE EDUCATED ABOUT THE SYSTEMIC NATURE OF THESE
issues THE CONNECTIVITY OF THESE ISSUES - and how these FALSE
ESTIMATES OF VALUE AND IMPACT ARE SHOWING UP IN OUR PERSONAL
LIVES
Kevin
19
So this is Kevin "Kevin's Law is named in memory of 2 1/2
-year-old Kevin Kowalcyk, who died so tragically in on August 11
2001 after eating a hamburger contaminated with E. coli O157:H7.
WHAT THIS LITTLE BOY AND HIS FAMILY WENT THROUGH WAS HORRIFIC no
family should have to bear witness to a loved one suffering in the
way that Kevin did.
The meat that Kevin ate had been produced by a subsidiary of one
of Americas largest agribusinesses. In July 2000 one year before
Kevins illness - this company failed USDAs Salmonella test for the
second time. In December 2000, this same company had a positive
random E.coli test and 1.1 million pounds of ground beef were
recalled. After the recall, USDA performed another random E. coli
O157:H7 test, which was negative, but then, in July 2001, an
outbreak in northern Illinois and Chicago was traced back to the
same offending plant. As a result, USDA performed a non-random test
for E. coli O157:H7 on August 2, 2001 and this test came back
positive. Finally, on August 27, 2001 after 25 days of
USDA-industry negotiations the plant recalled 530,000 pounds of
ground beef. The PFGE pattern (or DNA) for Kevins E. coli matched
the PFGE pattern of the August 27th recalled meat
Was the intent of this company to kill kevin I doubt it what the
substandard meat processing a way to cut costs and increase profits
for shareholders probably however the focus solely on profits and
short term value and quarterly earnings is a catalyst for these
types of tragedies.Question could this company have been in one of
the portfolios of Kevins parents or grandparents ? Could We be
investing in companies that are creating the very challenges and
painful experiences we say we wish to stop Would reporting and
disclosure of these issues prevent these things from happening. The
system is broke
Kevins Lawwas introduced in 2005 was proposed legislation that
would have given theU.S. Department of Agriculturethe power to
close down plants that produce contaminated meatThis bill never
became law, as it was referred to committee but never reported on.
Versions of the bill have been introduced in each subsequent
Congress, but as of April 2010 have never been reported out of
committee.
Corporate meat processors have and continue to lobby against
Kevin's Law, arguing that it would increase the cost of food and is
unnecessary. (Metric)
The Centers for Disease Control and Prevention estimate that
food borne diseases cause roughly 76 million illnesses, 325,000
hospitalizations, and 5,000 deaths each year.
Everything is connected
TrendsThought-Leaders Using SI/ESG Fundamentals to Engage CPAs,
Business Owners & Educators Engage the CPA Community ~ Most
Trusted Advisor Engage the Business Owner (Privately-Held) ~
Valuation & Succession Planning
Engage Leaders/Job Creation ~ Knowledge-Economy $$$
Education Partners ~ Colleges & Universities
20So this whole program was borne out of a basic premise that
ALL BUSINESSES ARE IMPACTED BUY THESE ISSUES ALL COMPANIES CAN
BENFIT FROM THIS AND SHOULD BE ACCOUNTABLE TO THESE DISLCOSURE
ISSUES AND ALL CPAS SHOULD BE DISUCSSING THIS AND ADVISORS SHOULD
BE INCORPORATING THESE CONCEPTS NOW INTO THEIR DISCUSSIONS WITH
CLIENTS THAT WE SHOULD BE INVOLVING AND COMMUNICATING THIS
INFORMATION Engage the CPA community RISK MANAGEMENT and AUDITING
FOR RISK there is a whole peripheral population the CPAs - that
could be being used as a major catalyst for this movement
education, momentum, & action is peripheral on the side lines
Risk Management, Most Trusted Advisor, Value Add to Clients, Profit
Center to Firm (AICPA/State Societies)
Engage the PH bus owner demonstrate this ESG criteria
(People-Driven Business Model/Intangibles) drives profitability,
bottom line and
businesses are teaching how to Operationalize these ESG concepts
into a business model and quantify
Colleges and Universities are Building Sustainability
Curriculums, Internships, Project-Based Learning
(NetImpact.org)
Tools MVP (More Value & Profit) Program Based on
People-Driven (and Planet Too) Business Model
Sustainability Scoring & Impact Ratings; 401K, Pensions
(& Endowments)
Internships ~ MBAs, Sustainy Accounting: Providence College
Create New, Viable Profit Centers Especially for CPAs
Community Signature ~ Environmental Literacy Programs ~ No Child
Left Inside (NCLI)
21The tool we are using is the MVP Program and there are several
components to it
The INTEGRATION OF THE POEPL/PLANET DRIVNE BUSINESS MODEL
SUSTAINABILITY SCORING AND IMPACT RATINGS ON THE 401K the CPA is
like the doctor for your 401K and pension how healthy or sick is
401K The the PC Internship utilizing MBA students to assist with
this helping from a cost and time perspective Building curriculum
for CPE for the CPA community AND TAKING THAT CURRICULUM AND
BRINGING IT TO THE SCHOOLS AND THE EDUCATION PIECE CASE STUDY PIECE
TO EXECUTE AND BUILD CURRICILUM FROM - COMPLETES ECOSYSTEM
A People-Driven Business Model ValuesHuman, Environmental,
Social & Financial Capital
PROFIT-DRIVENFinancial Data:Tangibles Earning
GrowthPrice/Earnings RatioReturn on EquityOperationsCash FlowRisk
ManagementPEOPLE-DRIVENHuman Env Social Data: Intangibles
Health ~ Stress/Wellness Program Wealth ~ Scoring/Impact Earth ~
Energy Efficiency & Natural Resource Intensity Equality ~
Employee Engagement &Leadership Trust ~ Sustainability
Reports/Community Signature Profit +People +Planet = ProsperityWhy?
Intangibles Drive ValueBenefits theWhole
Building Bridges 2012 Copyright 2012 All Rights Reserved
22Integrating a people driven business model and using 5 basic
core metrics taken from the HIP book simple people understand it
and it basically covers all the categories that SASB is looking in
great detail So we are doing an initial assessment along these 5
metrics getting our baselines and ascertaining where to start and
then executing specific sustainability strategies re-assessing then
linking to bottom line and performance and quantifying
Today we are going to discuss the wealth metric and the scoring
and impact ratings and how to sue this as an employee engagement
strategy
CONFIDENTIAL 2006-2013 HIP Investor Inc. 23401(k) Plan Funds
Scored for IMPACT
23This is the KLR 401K plan all of the holdings
Another interesting piece to this is the Newberger berman has
privately held companies in it with no dislcosure rerquirements
Benefits of 401(k) Plan Scoring: Engaging Employees; Attracting
Top Talent; Discovering How to Quantify Future Risk &
ImpactCONFIDENTIAL 2006-2013 HIP Investor Inc. 24RETURNS:
Annualized 5- Yr Returns*RISK: Standard Deviation of 5-Year
Returns*VALUE: size of circles relative to $ Invested in
FundIMPACT: color of circles: Green = higher IMPACTYellow = medium
IMPACTRed = lower IMPACT* Past 5 years, as of 8/31/2013; HIP Scores
(2011/12)Source: KLR 401(k); Morningstar; HIP Investor Scores
2466% if investors would like to see their company add a
sustainable and responsible 401K option Source: Yankelovic Study
sponsored by Calvert, 2006.
While participant demand continues to grow few plan sponsors
currently offer and sri option ONLY 14% of Defined contribution
plans offered have one or more SRI funds in them 84% of plan
sponsors predicted in 2011 that the demand for SRI options would
increase or remain steady during the following 5 years however only
14% of defined contribution plans offered one or more SRI funds
Source: (Mercer Report for Social Investment Forum, Opportunities
for Sustainable and Responsible Investing in U.S.
DefinedContribution Plans, September 2011)
Deloitte reports 62% of gen y want to work for a company who is
socially responsible they want to apply their skills to benefit
communities and society 68% say they would not work for a company
that is not socially responsible
A group of asset managers, representing approximately $2
trillion in assets under management, say that integrating ESG
considerations into investment decisions should be a legal
responsibility Source: Report produced by the Asset Management
Working Group of United Nations Environment Programme Finance
Initiative (UNEP FI), Fiduciary Responsibility - Legal and
Practical AspectsPrudent fiduciaries should consider material ESG
issues as an integral part of their investment decisions. A
Freshfields study examining fiduciary investment decision making in
nine countries concluded that "integrating ESG considerations in an
investment analysis so as to more reliably predict financial
performance is clearly permissible and is arguably required in all
jurisdictions. Source: 4 "A Legal Framework for the Integration of
Environmental, Social and Governance Issues into Institutional
investments Freshfields Bruckhaus Deringer. 2005. Survey included:
Australia, Canada, France, Germany, Italy, Japan, Spain, the United
Kingdom, and the United States
The Department of Labor believes sustainable and responsible
investment options are not inconsistent with fiduciary standards.
Source: Letter from the Department of Labor to Calvert Group, Ltd.
(now known as Calvert Investments, lnr.), May 28, 1998.
380% increase in SRI assets in 15 years Source: "2010 Report on
Socially Responsible Investing Trends in the United States:' Social
Investment Forum, 2011 As of June 2013 of the 600 shareholder
resolutions filed 44% are focused on ESG issues Source: Ernst and
Young
This scoring and information Empower Employees to be a catalyst
for Positive Human Impact!
25Opportunity for participants to integrate impact EMPLOYEE
ENGAGEMENT & ATTRACT TALENTNew revenue-generating potential can
be explored for KLR- INVESTMENTS/CONSULTING/SUSTAINABILITY REPORTS
New Possibilities for KLR to Generate Revenue click Analyze
retirement-plan choices & recommend better funds (Pension
Audits)Attract new wealth-management clients & AUM (Impact
Investing) click Attract new clients/Analyze knowable but ignored
risks & opportunities Account for unseen, intangible value
(Sustainability Reports) Attract new non-profit clients with
Impact-Ratings to quantify outcomes
850+ B Corporations $7.0 Billion Marketplace 60 Industries
26
Trends: An Emerging Marketplace?All Investing$61.9 Trillion
Negatively Screened Funds + Impact Investing$3.1 TrillionImpact
Investing in 10 years?~$1 Trillion
Impact Investing is the use of for-profit investment to address
social and environmental challenges.
850+ B Corporations $7.0 Billion Marketplace 60 Industries
27
Who makes Impact Investments?
850+ B Corporations $7.0 Billion Marketplace 60 Industries
What do they want to Measure?
Operational ImpactBusiness Model Impact
850+ B Corporations $7.0 Billion Marketplace 60 Industries
29
Benefit Corp: Twenty Passed (DE, PA, CA, HI, IL, LA, MA, MD, NJ,
NY, SC, VT, VA, DC, AZ, AR, NV, OR, CO, RI)
Not Alone L3C Flexible Purpose Corp Social Purpose Corp UK /
Chile
Tremors: New Corporate Forms
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Tools: Resources
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Subsidiaries
Investment
Supply Chain
Tax
Procurement
Tools: Engagement
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Provides clarity to directors and officers that their fiduciary
duty includes creating a material positive impact on society and
the environment, even in liquidity scenarios;
Offers legal protection to directors and officers to consider
the non-financial interests of the workforce, community, and
environment when making decisions, even in liquidity scenarios;
Helps maintain mission over time by 1) expanding shareholder
rights to enforce this expanded definition of fiduciary duty and
standard of consideration; and 2) requiring a 2/3 majority vote of
shareholders to remove these higher standards;
Creates a marketing opportunity to differentiate the business as
a Benefit Corporation, a new class of corporation required by law
to benefit society as well as shareholders
Creates press opportunity for early adopters
32
Page 33 Discovering corporate sustainability trends &
tremors through CDP disclosure assessmentSustainable
Brands#NewMetrics
Philadelphia 25th September 2013Stephen DonofrioVice President,
Partnerships & Innovation
[email protected] / 212.378.2086132 Crosby Street, 8th
Floor, New York, NY 10012
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Trends
Tremors
ToolsAgenda34Increasing investor interest & corporate
disclosureQuality of corporate disclosure is ever-improving
Scope 3: Financed emissions minimally reported by
financialsScope 3: Investments methodologies exist, but no
standardCase Studies of Scope 3: Investments calculated by
financials
CDP overviewAction and engagement on financed emissions
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Trends
Tremors
ToolsAgenda35Increasing investor interest & corporate
disclosureQuality of corporate disclosure is ever-improving
Scope 3: Financed emissions minimally reported by
financialsScope 3: Investments methodologies exist, but no
standardCase Studies of Scope 3: Investments calculated by
financials
CDP overviewAction and engagement on financed emissions
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Trends: Increasing investor interest & corporate
disclosureTo transform the global economic system to prevent
dangerous climate change and value our natural resources by putting
relevant information at the heart of business, investment and
policy decisions.
Forests100 Companies disclosed in 2012Water340+ Companies
disclosed in 2012
Climate Change 4600+ Companies disclosed via CDP in 2013
36
850+ B Corporations $7.0 Billion Marketplace 60 Industries
36
Trends: Quality of corporate disclosure is
ever-improvingTransparency97%min score for G500 disclosure leaders
in 2013
8% increase from 2011
Page 37 Verification 71%of G500 companies verified their GHGs in
2013
2X % from 2011
850+ B Corporations $7.0 Billion Marketplace 60 Industries
37
Trends
Tremors
ToolsAgenda38Increasing investor interest & corporate
disclosureQuality of corporate disclosure is ever-improving
Scope 3: Financed emissions minimally reported by
financialsScope 3: Investments methodologies exist, but no
standardCase Studies of Scope 3: Investments calculated by
financials
CDP overviewAction and engagement on financed emissions
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Page 39
Energy: Energy companies reported scope 3 emissions are 4X
higher than the sectors scope 1 and 2 emissions; 98% of these are
emitted through the use of sold products.
whereas
Financials: Financials makes up 24% of respondents, however,
represents only 0.6% of total S1+2 emissions; Only 6% report the
carbon impact of their investments
Tremors: Scope 3: Financed emissions minimally reported by
financials
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Financials:Sector Stats: The most reported risk and opportunity
is reputation;
Scope 3: Business travel, employee commuting and waste
generation are 3 most commonly disclosed categories
Energy:Sector Stats: 50% of energy companies have a performance
band of C or lower; The sector has the highest proportion of
companies without emission targets (24%); and
Scope 3: Reported scope 3 emissions are four times higher than
the sectors scope 1 and 2 emissions. 98% of these are emitted
through the use of sold products.
39
- RBSs true carbon emissions 2012, The World Development
Movement (WDM)Under the CDP, in 2012 RBS reported greenhouse gas
emissions of 735,437 tonnes of carbon dioxide equivalent
(tCO2-e)... RBS did not report any emissions resulting from the
money it loans to fossil fuel companies or projects. These financed
emissions resulting from the banks loans to coal, oil and gas
companies bring the banks 2012 carbon footprint to up to 1,200
times the footprint reported...Page 40
{{{{
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Tremors:Scope 3: Investments methodologies exist, but no
standard Various approaches exist: 2o Investing Initiative ided a
dozen
Standardization efforts: results in 2014-2015? UNEP-FI (global)
& VfU (regional)
Methods mentioned in CDPs 2013 disclosure cycle: UNEP-FI (10
mentions), GHG Protocol (9 mentions), VfU (7 mentions), WRI (7
mentions) & WBCSD (3 mentions)
41
{{{{Investments are categorized as a downstream scope 3 category
because the provision of capital or financing is a service provided
by the reporting company.- GHG Protocol (WRI/WBCSD)
850+ B Corporations $7.0 Billion Marketplace 60 Industries
41
Tremors:Scope 3: Investments methodologies exist, but no
standard42
{{{{There are many factors to be considered including
availability, credibility, and consistency of information as well
as the direction of the regulatory landscape in North America.-
Bank of Montreal 2013 CDP Climate Change Disclosure
We have tested all available methodologies to assess GHG
emissions from investments, but none of them meets our criteria in
terms of reliability and bias.- BNP Paribas 2013 CDP Climate Change
Disclosure{{{{
850+ B Corporations $7.0 Billion Marketplace 60 Industries
42
Case Studies of Scope 3: Investments calculated by
FinancialsCommonwealth Bank of Australia % of financing X total
lifetime project emissions
1 project (25 year life) in 12
Uses Australian govts def. of emissions intensive to identify
deals closed during reporting yr
Page 43
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Case Studies of Scope 3: Investments calculated by Financials
Mizuho Financial Group % of equity x emissions as reported to CDP
or other
Top 30 companies held by the parent company
Accounts for ~20% of the value of consolidated non-investment
holdingsPage 44
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Case Studies of Scope 3: Investments calculated by
FinancialsCitigroup % of financing X total lifetime project
emissions
1 project (30 year life) in 11
Project-specific GHGs are derived from the plants capacity &
heat rate, the carbon content of the fuel, and projected capacity
utilizationPage 45
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Trends
Tremors
ToolsAgenda46Increasing investor interest & corporate
disclosureQuality of corporate disclosure is ever-improving
Scope 3: Financed emissions minimally reported by
financialsScope 3: Investments methodologies exist, but no
standardCase Studies of Scope 3: Investments calculated by
financials
CDP overviewAction and engagement on financed emissions
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Tools:CDP overview CDP is an international, not-for-profit
organization providing the only global system for companies and
cities to measure, disclose, manage and share vital environmental
information.
Mission is to transform the global economic system to prevent
dangerous climate change and value our natural resources by putting
relevant information at the heart of business, investment and
policy decisions.CDP has 501(c)3 charitable status in the U.S. via
its fiscal agent and sponsor liaison, Rockefeller Philanthropy
Advisors47
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Tools:Action and engagement on financed emissionsGeneral
Motivations:
Pressure from NGOs. Companies want investor feedback
Mandatory reporting requirements will increaseCDP Efforts:
UNEP-FI Scope 3 - Investments task force
CDP is increasing work on sector disclosure & materiality
focus
CDP could be utilized as a financed emissions reporting toolPage
48
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Page 49 Discovering corporate sustainability trends through CDP
disclosure assessmentSustainable Brands#NewMetrics
Philadelphia, 25th September 2013Stephen DonofrioVice President,
Partnerships & Innovation
[email protected] / 212.378.2086132 Crosby Street, 8th
Floor, New York, NY 10012
850+ B Corporations $7.0 Billion Marketplace 60 Industries
Trends & Tremors in the Sustainable Investing
Landscape:Threshold InvestingSustainable Brands #NewMetrics
ConferenceWharton, UPenn, September 24, 2013
Bill BaueCo-FounderSustainability Context Group
50Sustainable Investing doesn't currently address threshold
overshoot
TremorOvershooting Sustainability Thresholds
Rockstrom's Planetary BoundariesPssst: Sustainable Investing
Currently Ignores Thresholds
51Sustainable Investing doesn't currently address threshold
overshoot
TrendThreshold-Based Advocacy 350.org's Divestment Campaign
Pssst: Campaign Currently Ignores Demand SideCarbon Emitters
52
ToolThreshold Investing Pssst: Investors Wanted
Sustainable Investing Founders Add New Dimension
53
ToolsThreshold-Based Carbon Counters Pssst: Run the Numbers CSO,
Autodesk, CDP/WWF Offer Free Calculators
54
ToolThreshold-Based Screening Climate Counts IndexPssst: Build
Portfolios That Profit From Climate Solutions
55
Tool Triple Bottom Line Threshold ScreeningTrue Sustainable
InvestingPssst: Build Portfolios That Profit From Sustainability
Solutions
56
57