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Though
the Coalition for Environmentally Responsible Economies (CERES)
celebrated its 15th anniversary in March at its conference in Boston,
MA, the group is, in its own words, just getting started. Founded
to move businesses, capital and markets to advance lasting prosperity
by valuing the health of the planet and its people, this national
coalition of investment funds, environmental organizations and other
public interest groups has achieved significant advances.
It made its first big splash with the introduction of the CERES
Principles, an environmental code of conduct that has won broad
support from a wide cross section of stakeholders. The Aveda Corp.
became the first signatory to the principles in 1989 and subsequent
endorsers include environmental and public interest groups, investors
and foundations and a diverse number of both major and smaller corporations.
In 1999 CERES launched the Global Reporting Initiative (GRI), the
first set of generally accepted standards for sustainability disclosure.
Developed in partnership with the United Nations Environment Programme
(UNEP) and many others, GRI was spun off in 2002 and is now an independent
organization headquartered in Amsterdam.
Also in 2002, the CERES publication Value at Risk drew attention
to the financial risks of climate change. This effort led to the
convening of the first Institutional Investor Summit on Climate
Risk at the United Nations and brought together investors representing
more than $1 trillion in investments. Labeled a huge success, observers
said “it placed climate change on the radar screen of high-powered
policymakers and investment professionals.”
As a direct result, Sean Harrigan, the president of California’s
Public Employees’ Retirement System (CalPERS), addressed the
assembled at the CERES conference with an exciting and significant
announcement. As the nation’s largest public pension fund,
holding assets of $166 billion dollars in trust for their members
and beneficiaries, Harrigan acknowledged that CalPERS needs to be
involved in the financial affects of climate change. “I’m
here to say we are going to be more than engaged in this effort
to protect our financial assets. No question, climate risk is a
financial and a health security issue that affects everyone, including
our 1.4 million CalPERS members and their families.
“We should all be concerned about the risks to investments
worldwide,” Harrigan continued. “I am seriously disturbed
by the recent studies documenting potential climate change damage
facing California. The severe impacts on water, on agriculture,
and the increased wildfire risks: all of these directly threaten
CalPERS investments, and that threatens our members’ retirement
security. Facing the climate change challenge requires nothing short
of a revolution. I submit to you that it is time to embark upon
this revolution.”
Harrigan concluded by expressing confidence in the revolution. “I
believe we have the know-how and technology to address climate risk,
and we can do so while enhancing investment returns. But what we
need today is the other important ingredient: leadership. We need
investors, we need companies and we need policy makers to stand
up and be counted. We simply can’t leave it to future generations
to solve this problem. It may be too late. It is up to us. It is
up to us to do it now. At CalPERS, we are going to use our leadership
and our clout in the marketplace to help advance the proposal I
have set forth today.”
The first major pension fund to set up a formal private equity environmental
investment program is big—really big—news indeed and a
testament to the effectiveness of the initiative. In its first 15
years CERES has made a significant difference in the ways in which
businesses operate, how they communicate and the transparency with
which they do so. They represent a bright light of clarity in the
currently murky political and economic climate and to hear them
tell it, CERES has only just begun!
For more information about CERES and its 2004 conference, visit
www.ceres.org.
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