Fossil Fuel Divestiture Campaign Focuses on Big Pensions

By Carol Pierson Holding

 

The fossil fuel divestiture campaign GoFossilFree equates the end of oil, gas and coal toDivest Scottish Parliament the great moral crusades of our time — Apartheid and tobacco — while hoping to reduce demand for fossil fuel stocks and thereby threaten their stock prices.

 

It’s a tall order. As long as GoFossilFree was focused on divesting university endowments, the campaign was a gnat on the haunch of the elephant. After all, why should an industry worth $5 trillion be afraid of endowments worth $467 billion, whose investments in oil and gas are probably 10%, or $50 billion, at best? Chump change to this industry’s behemoths.

 

But more recently, the FossilFree campaign began targeting pensions as well, and that’s a problem. Consider the numbers: as of 2013, US pension assets totaled $21 trillion. Using that same 10%, you’re talking $2.1 trillion in fossil fuel stocks. That’s a number big enough to scare even Big Oil.

 

The first real threat came in 2015 from California’s state pensions. In April of that year, the California legislature voted to divest its coal stocks from the pensions’ $657 billion investment fund. A scary precedent and one that got Big Oil’s attention.

 

Evidence of Big Oil’s alarm is clear on the anti-divestment site divestmentfacts.com. Funded by the Independent Petroleum Association of America (IPAA), the site used to publish letters from University Presidents justifying their decisions not to divest and a few reports on how much individual college endowments would lose through divestment.

 

In June, the DivestmentFacts site underwent a radical change. Focused now on pension funds, the site promotes the idea that under divestment, pension funds will lose $7 billion over twenty years. Three studies from three separate universities support the claim.

 

A closer look at the study authors reveals how much more the IPAA is investing to stop pensions from divesting. The lead study is authored by none other than the notorious economist and lawyer Daniel Fischel, the short-lived dean of Chicago Law School who resigned over a sex scandal and one-time expert witness in criminal trials of Mike Milken and Charles Keating as well as officers of Enron and Philip Morris. Fischel is Chairman and President of Compass Lexecon, one of the largest consultancies that specialize in what Charles Ferguson described in the Huffington Post as “The sale of academic ‘expertise’ for the purpose of influencing government policy, the courts, and public opinion… now a multi-billion dollar business.” The other two studies are by academics who are also Senior Consultants at, yes, Compass Lexecon. That’s some pricey research.

 

Shortly after releasing the three studies, the IPAA published a survey of pensioners conducted by FTI Consulting, which owns — wait for it — Compass Lexecon. FTI’s report warns, “Even the largest college endowment funds in existence today hold only a fraction of the assets managed by public pension funds,” then goes on to present “statistics” that prove pensioners don’t want divestment. A spokesman from the American Petroleum Institute (API) draws on heart strings when he concludes, “Millions of retirees and pension holders depend on income from oil and natural gas investments to live.”

 

Both oil lobbying organizations, API and IPAA, are funded mostly by the fossil fuel majors, with the bulk coming from Shell, BP and Chevron, companies that have the most to lose from divestiture. And they’re right to spend whatever they have to, because the truth is, the smart money in pensions should flee oil and gas for economic reasons. Looking ahead, HSBC Global Research found that global carbon regulations could result in fossil fuel companies losing 40-­60% of their value, which will translate into reductions in share price. Similar warnings have come from CitiBank, Standard and Poor’s, and the Bank of England.

 

Big Oil is right to be afraid. Pension fund divestment has moved to Europe. Just two weeks ago, the EU issued a directive that, on ratification, will require all pensions to “consider climate and risks related to…‘stranded assets,’”, referring to oil and gas reserves that may never be used. EU pensions total £3.2 trillion, $4.4 trillion at today’s depressed exchange rates.

 

Spending on anti-divestment is just a finger in the dike. Big oil and gas will lose to carbon-free energy. Will they follow buggy-manufacturers who never embraced the automobile and were pushed out of business? Or will they imitate American carmakers that entered the electric car market? Perhaps divestment will exact the same financial pressure on oil and gas that forced dramatic innovation in the American auto industry.

 

Keep your fingers crossed.

 

Photo courtesy of Friends of the Earth Scotland via Flickr CC.

 

 


 

Carol2Carol Pierson Holding is President and Founder, Holding Associates. Carol serves as Guest Blogger for CSRHub. Her firm has focused on the intersection of brand and social responsibility, working with Cisco Systems, Wilmington Trust, Bankrate.com, the US EPA, Yale University’s School of Environmental Sciences, and various non-profits. Before founding Holding Associates, Carol worked in executive management positions at Siegel & Gale, McCann Erickson, and Citibank. She is a Board Member of AMREF (African Medical and Research Foundation). Carol received her AB from Smith College and her MBA from Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and rankings information on 16,495+ companies from 135 industries in 133 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

 

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Our Annual Look at Newsweek’s Green Rankings

By Bahar Gidwani

 

The 2016 Newsweek Green Rankings were released last week.  Our friends at Corporate Knights Capital and HIP Investor again provided the underlying data behind the list.

 

We probably get more questions about Green Rankings and the radical changes in position that seem to occur each year, than for any of the 461 different rating systems we track.  The table below shows the changes in position on the list that five companies experienced over the past three years.  Some of this variation may be due to changes that Newsweek has made in the way its scores are calculated and for 2013 to 2014, changes in its data providers.  (Last year’s list was driven by the same providers but there were several changes made prior to this.)  Some variation may be due to actual changes in the performance of the companies on the list and the relatively narrow scope of the study.  (CSRHub currently tracks the sustainability performance of more than 16,000 companies.)  Finally, the Newsweek Green Rankings are meant to assess and measure environmental performance.  Most other ranking systems cover a broader set of sustainability metrics.

 

Newsweek Green Rankings

 

Newsweek’s scores correlate reasonably well with the aggregate score we generate from the views of the rest of the ESG ratings space.  (We use a small amount of Corporate Knights information and share a data provider with HIP.  But, we probably less than 3% of our data set with them.)  As you can see below, the Newsweek ratings have about a 50% correlation with CSRHub’s ratings for each set of companies.

 

Newsweek CSRHub Score Comparison

 

However, even with this degree of correlation, there is a relatively poor agreement between the companies CSRHub would choose on Newsweek’s list of 500 companies as the best or worst performers and the companies on the Newsweek lists.  (Note that the rest of the analysis in this post focuses on the Global Rankings.  However, we found similar results for the US Rankings.)

 

Newsweek Global 500 and CSRHub comparison

 

We dug in a bit more to see if we could explain what might be driving these variation at each extreme.  A correlation between the Newsweek rating and CSRHub’s four category ratings shows that Newsweek’s score as expected is most closely tied to CSRHub’s environment rating.  There is also a connection with CSRHub’s Employee and Governance ratings.  However, there is no statistically supported connection with CSRHub’s Community rating, which includes the three subcategories of Product, Community Development & Philanthropy, and Human Rights & Supply Chain.

 

CSRHub Regression Analysis

 

The coefficient for the Environment component of this regression is 2.5X bigger than that for Governance and 4.5X bigger than the effect of Employees.  Still, top Newsweek companies probably need to perform well on at least the “E” and “G” parts of ESG.  The Social “S” part though—Employee and Community issues—has only a weak effect.  This would lead us to predict that some of the difference in rank between Newsweek and CSRHub is driven by differences in these factors.

 

As you can see below, the top CSRHub companies have average Community and Employee ratings that are 14% and 11% respectively above the average for the top Newsweek companies.  The opposite is true for bottom-ranked companies.

 

CSRHub Newsweek Community and Employees comparison

 

The companies who moved up this year are likely to trumpet their success.  Those who moved downward may be able to argue that their overall performance didn’t really change—they only changed emphasis from E and G factors, into the S (Social) area.

 


 

Bahar Gidwani Bahar Gidwani is CEO and Co-founder of CSRHub.  He has built and run large technology-based businesses for many years. Bahar holds a CFA, worked on Wall Street with Kidder, Peabody, and with McKinsey & Co. Bahar has consulted to a number of major companies and currently serves on the board of several software and Web companies. He has an MBA from Harvard Business School and an undergraduate degree in physics and astronomy. He plays bridge, races sailboats, and is based in New York City.
 
CSRHub provides access to the world’s largest corporate social responsibility and sustainability ratings and information.  It covers over 16,000 companies from 135 industries in 132 countries. By aggregating and normalizing the information from 461 data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices, and seek ways to improve corporate sustainability performance.

 

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Surfer Dudes Add Hope for Saving Our Oceans

By: Carol Pierson Holding

 

June 8th was World Oceans Day. It was celebrated with a reception at U.N. Headquarters in New York City. The Empire State Building was lit in white, blue and purple representing different layers of the ocean.

 

The day started in New York’s Long Island City, where the UN Secretary-General greeted the Hawaiian boat Hokule after two years at sea without motors or GPS.

 

Beach TrashBostonGlobe.com ran stunning photos of oceans.

 

Capitalists played their part too. In his World Oceans Day blog for Huffington Post, Richard Branson dressed up as a Merman to announce that as part of the 2016 Virgin Strive Challenge, he would swim from the southern tip of Italy to Sicily. The challenge sponsor is Virgin Money. That’s corporate social responsibility the Branson way.

 

In the real world, aquariums put on special shows. Citizens participated in symposiums and beach clean-up. All of this to raise appreciation of our oceans and awareness of both ocean wonder and degradation.

 

But what excites me most are the younger surfers around the world who are taking action.

 

The best known is of course Boyan Slat, the now 21-year-old Dutch aeronautical engineer who two years ago raised $2.2 million via crowd-sourcing for his non-profit Ocean Cleanup.  After witnessing garbage despoiling Greek waters when he was 16, Slat asked the question, “Why don’t we just clean it up?” He didn’t know why that’s an impossible task — even if he could overcome technological, territorial and funding issues. But his naiveté turned out to be a strength as compelling as his persistence.

 

Slat’s system uses ocean currents to concentrate garbage where it can more easily be picked up. (For a description of how it’s done, read The Guardian’s look at feasibility and  links to technical papers.) After five years of relentless pushing and the help of top engineers and scientists, Slat’s ocean cleaning system is going into trial this month.

 

Anther solution to ocean garbage is the SeaVax, a solar and wind-powered, self-driving ship that sucks up plastic. Invented by a young British trio, the ship has special sensors to detect trash and sonar technology that protects marine and bird life. The first ship is ready and looking for a launch site.

 

And another: Designed by two Australian surfers from recycled material, the Seabin is an automated trash receptacle for marina docks. Much like Seavax, funding was cobbled together from seed money plus crowd-sourcing.

 

Despite lack of experience and limited resources, these young social innovators are part of a passion-driven force that is taking center stage. In an interview with the Chairman of C2 Montreal JF Bouchard, the annual conference on innovation, journalist Ali Velshi maintains that individuals — “the Many” —not policies or institutions hold the key to society’s greatest challenges. In his words:

 

“I used to lament the end of programs like NASA, where a government took charge of a problem, or things like Bell Labs, where somebody was just working on stuff that wasn’t for commercialization. But you know, what’s better than the government and these labs is people, regular people.”

 

Surely Velshi goes too far. One (ironic) example: another significant problem, rising ocean temperatures, was confirmed in 2015 by a collaboration that included Bell Labs’ underwater radar arrays…and NASA scientists.

 

Fixing problems is exciting stuff. Yet in the end, it’s less complicated than measuring problems or preventing them in the first place. That’s where you need big institutions. Cities like Seattle and San Francisco banned plastic bags; Congress passed a ban on microbeads to take effect in July 2017. Since 1972, the Ocean Dumping Act has reinforced no-dumping laws with stiff penalties.

 

Branson’s stunts and the surfer dudes who develop their fantastical gizmos give us hope for a quick solution to environmental devastation. With institutional support, we might just get there.

 

Photo courtesy of Ingrid Taylar via Flickr CC.

 


 

Carol2 Carol Pierson Holding is President and Founder, Holding Associates. Carol serves as Guest Blogger for CSRHub. Her firm has focused on the intersection of brand and social responsibility, working with Cisco Systems, Wilmington Trust, Bankrate.com, the US EPA, Yale University’s School of Environmental Sciences, and various non-profits. Before founding Holding Associates, Carol worked in executive management positions at Siegel & Gale, McCann Erickson, and Citibank. She is a Board Member of AMREF (African Medical and Research Foundation). Carol received her AB from Smith College and her MBA from Harvard University.

 

CSRHub provides access to corporate social responsibility and sustainability ratings and information on 15,000+ companies from 135 industries in 132 countries. Managers, researchers and activists use CSRHub to benchmark company performance, learn how stakeholders evaluate company CSR practices and seek ways to change the world.

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CSRHub Partner The Analyst Desk Issued its Semi-annual Changes to the Nasdaq CRD Global Sustainability Index

New York, NY: May 26, 2016 — CSRHub’s newest business partner, The Analyst Desk announced the results of the semi-annual re-ranking of the Nasdaq CRD Global Sustainability Index (Nasdaq: QCRD), which became effective Monday, May 23, 2016.

 

The following twelve securities will be added to the Index: Apple Inc. (Nasdaq: AAPL); BorgWarner, Inc. (NYSE: BWA); Deere & Co. (Nasdaq: DE); Delphi Automotive (NYSE: DLPH); Gilead Sciences, Inc. (NYSE:GILD); Marriott International, Inc. (NYSE: MAR); NVIDIA Corp. (NYSE:NVDA); Rockwell Automation (NYSE: ROK); Sealed Air Corp. (NYSE: SEE); Stericycle Inc. (Nasdaq: SRCL) and Sunlife Financial (NYSE: SLF).

 

The Nasdaq CRD Global Sustainability Index (Nasdaq: QCRD) is an equally weighted equity index that serves as a benchmark for stocks of companies taking a leadership role in measuring, managing and communicating the impacts and ROI of their investments in sustainable development and shared value creation.  The Index is made up of companies traded on a major US stock exchange who voluntarily disclose their current environmental, social and governance risks as well as their revenue opportunities and forward look on future performance.  The QCRD methodology incorporates lagging indicators in accordance with the Global Reporting Initiative G4 Guidelines, and leading indicators from public and proprietary frameworks to measure impact and shared value creation.  The securities must also meet other eligibility criteria which include minimum requirements for market value, average daily share volume, and price. The Index is evaluated on a semi-annual basis in May and November. For more information about the Nasdaq CRD Global Sustainability Index, including detailed eligibility criteria, visit https://indexes.nasdaqomx.com/.

 

As a result of the Index reconstitution, the following twelve securities will be removed from the Index: Albermarle Corp. (NYSE: ALB); AngloGold Ashanti Limited (NYSE: AU); Arcelormittal (NYSE: MT); BHP Billiton PLC (NYSE: BHP); Dow Chemical Company (NYSE: DOW); EI Du Pont Nemours (NYSE: DD); Freeport-McMoran Copper & Gold (NYSE: FCX); Spectra Energy Corp. (NYSE:SE); Sasol Limited (NYSE: SSL); Suncor Energy, Inc. (NYSE:SU); Syngenta AG (NYSE: SYT); and Verizon Communications, Inc. (NYSE:VZ).

 

Contact Information:

 

  • Media Contacts:  Joseph Christinat, Nasdaq, +1.646.441.5121, Josh Machiz, Nasdaq, +1.212.231.5614

 

  • Issuer & Investor Contact: Natasha Selzer, Nasdaq, +1.301.978.8623

 

 

  • Analyst Desk / MetaVu Contact: Mark A. Serwinowski, +1.303.475.7426,  mas@metavu.com

 

 

 

About CSRHub

Csrhub logo

 

CSRHub® provides access to the world’s largest corporate social responsibility and sustainability ratings and information service, covering 16,000+ companies in 132 countries. By aggregating and normalizing the information from 400+ data sources, CSRHub has created a broad, consistent rating system and a searchable database that links millions of rating elements back to their source. Managers, professionals, and academics use CSRHub to benchmark company and supply chain performance, learn how stakeholders evaluate company CSR practices, and seek ways to improve corporate sustainability performance. Subscribers can access 12 indicators and millions of detailed data points on employee, environment, community and governance performance. CSRHub is a B Corporation. For more information about CSRHub, visit www.csrhub.com or contact sales@csrhub.com.

 

About The Analyst Desk

qcrd logo

 

 analyst desk logo      


 

The Analyst DeskSM is a strategic partnership between award-winning business advisory firm MetaVu, and Wall Street investment analytics firm CRD Analytics, whose SmartView® 360 platform powers the Nasdaq CRD Global Sustainability Index, SeaCrest Global Clean Energy Portfolio and other international standards in sustainability rankings, portfolios and indexes.  The Analyst Desk provides intelligence, analytics and advisory services to help companies measure, manage and communicate their return on investment in sustainable development (SDROI).  For more information about The Analyst Desk, go to www.AnalystDesk.com.

 

About Nasdaq Global Indexes

nasdaq logo

 

Nasdaq Global Indexes has been creating innovative, market-leading, transparent indexes since 1971. Today, their index offering spans geographies and asset classes and includes diverse families such as the Dividend Achievers, Global, Nordic, Green Economy, Sharia and Commodity Indexes. They continuously offer new opportunities for financial product sponsors across a wide-spectrum of investable products and for asset managers to measure risk and performance. Nasdaq Global Indexes also provides custom index services and design solutions to selected financial organizations. For more information about Nasdaq Global Indexes, visit indexes.nasdaqomx.com.

 

Daily index values, weightings and historical data for Nasdaq indexes are available via Nasdaq Global Index Watch and Nasdaq Global Index Data Service.

 

The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular financial product or an overall investment strategy. Neither The Nasdaq Group, Inc. nor any of its affiliates makes any recommendation to buy or sell any financial product or any representation about the financial condition of any company or fund. Statements regarding Nasdaq’s proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

 

 

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CSRHub’s Cythnia Figge to Speak at Sustainable Brands ’16

sb16sd-hero-logo-342x90

CSRHub COO and CoFounder Cynthia Figge will be moderating a panel at Sustainable Brands 2016 conference, in San Diego on June 6-9. The panel will be discussing New CDP Product-Level Supply Chain Data: Analysis and Recommendations.

At SB’16 San Diego, thought leaders, brand innovators, designers, and global business leaders will gather to explore various topics and issues pertinent to sustainability. Participants are leading the way with creativity and new products and services facilitating the transition to a truly sustainable future.

 

Wednesday, June 8th 11:30am-12:30pm PDT

 

New CDP Product-Level Supply Chain Data: Analysis and Recommendations

 

  • Betty Cremmins, Senior Manager, CDP
  • Christoph Meinrenken, Chief Data Scientist, COCLEAR
  • Cynthia Figge, COO and CoFounder, CSRHub

 

SB’16 San Diego is the largest gathering of change makers representing many of the world’s largest global brands, disruptive social entrepreneurs, NGO’s, investors, academia plus a multitude of other stakeholders that support them. For more information regarding the event, click here.  To register for the conference, members of CSRHub may use a 20% Speaker Discount Code. Please use NWSPKSB16SD when registering.

 

New CDP Product-Level Supply Chain Data: Analysis and Recommendations Panel will cover:

 

The Carbon Disclosure Project (CDP) has partnered with CoClear to analyze its product life cycle data from CDP’s Supply Chain Climate Change Information Request. Over 1,500 companies from 30 countries, representing 10 industry sectors, responded to the CDP questionnaire in 2013, 2014 & 2015. These companies provided life cycle emissions data on more than 300 products. Prior efforts to understand industry emissions often relied on “top-down” methods of analysis, examining high level, aggregate emissions data. With top-down analyses, it is often difficult to pinpoint with particularity the causes of carbon emissions – and which products and brands in a company’s portfolio offer the most potential for efficiency improvements. This analysis, on the other hand, identifies which life cycle stage cause highest emissions in each industry and how sectors track and manage these hotspots over time. The goal is to help industries identify efficiency improvements throughout their value chain.

 


 

Cynthia Figge, Co-founder and COO of CSRHubCynthia Figge is a forerunner and thought leader in the corporate sustainability movement who co-founded EKOS International in 1996, one of the first consultancies integrating sustainability and corporate strategy. Cynthia is COO and Cofounder of CSRHub. Cynthia has worked with major organizations including BNSF, Boeing, Coca-Cola, Dow Jones, and REI to help craft sustainability strategy integrated with business. She was an Officer of LIN Broadcasting/McCaw Cellular leading new services development, and started a new “Greenfield” mill with Weyerhaeuser. She serves as Advisor to media and technology companies, and served as President of the Board of Sustainable Seattle. Cynthia has an MBA from Harvard Business School. Cynthia is based in the Seattle area.

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