Barb Brown to speak at NIRI Cleveland & Society of Corporate Secretaries luncheon
Barb Brown, Principal & Co-owner of BrownFlynn, will speak at this event on February 9 at noon at The Union Club of Cleveland. Her presentation, “Sustainability Reporting and the Investment Community: Basics, Benefits and Trends”, will discuss the trends in non-financial reporting and what they mean to the investment community.
Barb will cover:
- Basics and benefits of sustainability reporting
- Environmental, social and governance (ESG) ratings and rankings
- Advantages of different sustainability reporting frameworks such as the Global Reporting Initiative (GRI) and the Carbon Disclosure Project (CDP)
- Why investors care whether a company is reporting its sustainability performance or not
- How investors use ESG data to make investment decisions
- Trends in ESG investing
and more. BrownFlynn is a corporate responsibility and sustainability consulting firm, and the first U.S.-certified training partner of the GRI.
For more information and to register please click here. We hope to see you there!
January 17, 2012 at 4:17 pm brownflynnwinner Leave a comment
The Rise of the Biobased Economy
An interesting blog post by Jacquie Ottman and Mark Eisen – here is an excerpt:
Our economy is slowly but surely heeding the signal that carbon is the new watchword. During the past few years, a steady stream of so-called “biobased” products have been making their way to retail shelves — compostable dinnerware made from corn, plant-based laundry detergents, and bamboo flooring among them. Coke and Pepsi are now competing to be first to market with a soft drink bottle derived entirely from sugarcane or other plant materials.
The emerging biobased economy even has its own label — USDA Certified Biobased, pictured here. It’s part of a federal BioPreferred program designed to help grow “green” jobs, stimulate the rural economy, promote energy independence and prompt a shift to renewable resources from petroleum, helping to manage the carbon cycle.
Launched in February 2011, the label needs a little introduction since the term “biobased”, although familiar sounding, represents more than meets the eye. We advised the USDA on strategic marketing considerations related to the launch of the USDA Certified Biobased label. Here’s a primer — and why you need to be thinking about forming your own biobased strategy during 2012.
To read the full blog post please click here.
January 16, 2012 at 12:12 pm brownflynnwinner Leave a comment
Mercer study shows increased international interest in responsible investing
Yesterday the Financial Times published an article stating that U.S. investors are ramping up their efforts around environmental, social and governance (ESG) factors, particularly in regard to climate change, according to a new Mercer study.
Historically U.S.-based investment institutions have lagged behind their European counterparts in implementing ESG strategies. Of the more than 915 institutions that signed the UNPRI, only 63% went on to follow the allocation guidelines.
The Mercer study entitled: “Climate Change Scenarios – Implications for Strategic Asset Allocation“, looks at 12 institutional investors with more than $3 trillion under management combined and tracked their investment behavior over the past year with regard to ESG. The study found that 80% of the institutions have increased, or will soon increase, their ESG-related engagement with either asset managers or directly with companies. This is to better understand the inherent climate risk in various strategies.
The increased demand for ESG strategies is likely due to recent market volatility, which has institutional investors searching for sustainable investment products. “Turbulence in the financial markets, issues like BP and Fukushima, and climate change are behind it, no doubt,” says Neil Johnson, U.S. managing director of Sustainable Asset Management, a $13 billion Robeco subsidiary that specializes in responsible investing.
“Collecting the material non-financial information [on climate risk] that helps you make a better informed stock selection decision in order to build a portfolio that will add value is gaining interest. Institutional investors are catching up with the thought that there’s alpha to be had, and risk mitigation and just a good sustainable, long-term way to invest,” Johnson says.
Are you surprised by the results of this study, or does it align with trends we’ve been seeing recently? Do you think we will see an even bigger increase in investor interest in 2012? Discuss!
January 13, 2012 at 1:47 pm brownflynnwinner Leave a comment
Sustainability as a business critical initiative
Responsible-Investor.com reported today that a new survey of almost 3,000 companies has found that two-thirds believe having a sustainability policy is critical to be competitive in the marketplace. This number is up from 55% in 2010, and constitutes a tipping point in this trend.
The survey was conducted by the MIT Sloan Management Review and Boston Consulting Group. They found that 70% of companies that put sustainability issues on their management agendas had done so in the last six years, while 20% had done so in the last two years, indicating a speeding up in this trend despite the economic downturn.
The survey also concluded that the number of companies who have profited from sustainability has dropped to 31%, but is rising nevertheless. Overall these companies are much more committed to sustainability both internally and externally, among other things.
To read the full article please click here.
Do these stats surprise you or do you think they’re in line with current trends? Did you expect the number to be lower or higher? Discuss!
January 12, 2012 at 4:24 pm brownflynnwinner Leave a comment
How do we achieve sustainable capitalism?
In an article published by CSRwire today, the state of our economy was discussed as well as methods to remedy it. In a study called The Phoenix Economy, it concluded that this is not a simple recession or double-dip varient, but a fundamental restructuring that may take decades to work through. The phoenix, who bursts into flames and rises from the ashes a new bird, is a good metaphor for the type of sustainable economy experts are proposing.
This type of economy is explained in the Manifesto for Sustainable Capitalism, written by former Vice President Al Gore and former Goldman Sachs investment banker David Blood. Gore and Blood argue that, “We are once again facing one of those rare turning points in history when dangerous challenges and limitless opportunities cry out for clear, long-term thinking”.
The authors recommend five key actions for sustainable capitalism. Some people argue that it’s strange an organization like Generation Investment Management is calling for the next item on the sustainability agenda, however because the focus is shifting to a global overhaul of capitalism this seems like the logical path for the next 20, 30, 40 or even 50 years.
What are your thoughts? Does The Phoenix Economy and Manifesto for Sustainable Capitalism make sense, and/or is it the best solution for the state of our economy? Can we afford to work on our economy for the next 50 years? Discuss!
January 6, 2012 at 11:11 am brownflynnwinner Leave a comment
Patagonia first company to test Sustainability Legal Status
Today Bloomberg reported that outdoor clothing company Patagonia will become one of California’s first “Benefit Corporations”, a new legal structure that gives directors legal cover to consider social and environmental missions over financial returns. This law is one of two state measures that went info effect January 1, and each are designed to embed goals beyond profitability into companies’ missions.
Current law allows shareholders to sue corporate boards for not maximizing profits, which could hinder companies from pursuring social and/or environmental initiatives. Patagonia was able to do so because they’re a private, family-owned company. The other law that went into effect establishes “Flexible Purpose Corporations”. These corporations can write one or more special missions into their articles of incorporation, and directors have to consider these special missions in their decision-making even if it means lower returns for the company. To allow leeway there is no minimum standard for what a special mission needs to be.
Benefit Corporations must commit to creating an overarching “general public benefit” and must consider an array of stakeholders beyond shareholders. Further they must measure their progress against a third-party standard. This model has passed in six other states, and was developed by B Lab.
The big question is, who will use these new laws? Patagonia is the highest-profile business to adopt one of the new structures, and it’s also a PR coup for B Lab.
Drew Markham, an attorney at Wilson Sonsini Goodrich & Rosati in Seattle, began looking into ways to encourage socially responsible business in Washington state two years ago. First she examined the B Lab proposal, but concluded it’s “very unlikely to be used by a company seeking any venture backing or by a public company.” Now she’s among the lawyers pushing for a more permissive statute for companies that want to do good.
What do you think about these new laws? Do you think companies will be eager to adopt them and use them? Or do you think they will consider it too big of a risk? Discuss!
Goldman Sachs Asset Management makes responsible investing commitment
Responsible-investor.com reported today that Goldman Sachs Asset Management (GSAM), the fund management division of Goldman Sachs, has signed the UN PRI and is outlining plans to make responsible investment a key component of its business.
GSAM is one of the world’s top 10 asset managers with $714.6billion in assets under its management. They recognize that environmental, social and governance (ESG) factors could affect investment performance, bring forth potential investment risks, and provide an indication of a company’s management and leadership. GSAM is working to formally integrate ESG analysis into its investment processes where “consistent with its fiduciary duty”.
“We are committed to responsible and sustainable investing and are working to further integrate ESG (environmental, social and governance) principles into investment strategies and client solutions globally. We believe responsible and sustainable investing extends beyond the evaluation of quantitative factors and traditional fundamental analysis. Where material, it should include the analysis of an entity’s impact on its stakeholders, the environment and society,” the firm said in a statement.
GSAM is already a signatory to the Carbon Disclosure Project (CDP) and the UK Stewardship Code. They are joined by BlackRock, Alliance Bernstein and PIMCO in signing the UN PRI, adding to the list of prestigious firms who lend their support.
Goldman Sachs is probably the most well-known firm to join this list. Do you think their signing on will prompt other big name firms to do the same? Do you think the new year will bring more movement like this? Discuss!
December 21, 2011 at 12:36 pm brownflynnwinner Leave a comment
Cleveland ignites economy with new construction projects
Today the New York Times ran an article that highlights our great City of Cleveland and all the exciting construction projects ahead. Most notably, the relocation of the Museum of Contemporary Art (MOCA) to University Circle, near Little Italy, Case Western Reserve University, the Cleveland Museum of Art and University Hospitals. In addition, the Greater Cleveland Regional Transit Authority (RTA) just won a $12.5million grant to relocate a Rapid Transit station near the new MOCA.
The Times article begins by acknowledging the population decrease since 1950, and most dramatically in the last decade. However, in recent years the city government and RTA have rallied the big name players in Cleveland to develop and rebuild the city in accordance with the new urban market trends of the 21st century: health care (Cleveland Clinic and University Hospitals), higher education (Cleveland State University and Case Western Reserve University), entertainment (Playhouse Square District and Professional Sports), good food (E. 4th Street and the West End), new housing (University Circle and the Euclid Corridor) and expanded mass transit (RTA’s Rapid Transit and HealthLine).
The article specifically cites the revitalization of the Uptown area, where the $27million MOCA (designed by Farshid Moussavi) is being built. A pedestrian plaza designed by James Corner Field Operations (of the High Line elevated park in NYC) separates MOCA from two, four-story, mixed-use residential buildings under construction on the north and south sides of Euclid Avenue.
The south building will have 70 rental apartments, as well as restaurant and retail space. The north building will have 44 rental apartments, a bookstore and a grocery store, as well as additional retail space. The grocery store will be a much-needed amenity as one is not close by.
To get people to and from the arts district (that included Severance Hall, home of the world-renowned Cleveland Orchestra), the RTA plans to move two existing rail stops on the 19-mile Red Line, one of which is the aforementioned station near the new MOCA.
In essence, the Uptown area will be a new downtown for the University Circle neighborhood. CASE, University Hospitals, the Cleveland Museum of Art, the Cleveland Institute of Art, the Cleveland Institute of Music, Cleveland Clinic, Severance Hall and the Cleveland Orchestra, the Museum of Natural History and Little Italy are all within walking distance of this new downtown area.
These institutions form a distinct economic microclimate that has fostered the highest growth in job numbers, income and residents. “There are 5,000 more jobs here than in 2005,” said Chris Ronayne, and urban planner and president of University Circle, Inc. Further, by measure of civic energy and interest, Uptown looks to be a success. The one bedroom, one bath apartments will go on the market for $1,500/month in January.
Other new projects in the area include a planned $26million Marriott Hotel just down Euclid on Cornell Ave and a $30million addition to the Institute of Art.
This is no doubt exciting news for the City and we’re so proud to call Cleveland home. What are your thoughts on urban development and revitalization? Is it worth the investment? We certainly think it is, but we want to hear your thoughts. Discuss!
What drives value in corporate responsibility?
Today, the McKinsey Quarterly ran an article that discusses what really drives value in corporate responsibility. Do you think you know?
McKinsey states that executives struggle with how to properly position social investments to stakeholders, so as not to create unrealistic expectations of the value they creat for both the company and the community. Further, executives don’t want stakeholders to think these investments are overtaking core business operations, both in importance and volume. In some cases well-meaning corporate responsibility initiatives actually harm companies.
McKinsey conducted an experiment where consumers had to rate their own purchases for computer accessories after learning about the companies’ corporate responsibility activities. For companies with high product quality consumers rated them moderately positive. For companies that had low product quality, consumers said they were less likely to purchase from them despite the company’s positive corporate responsibility activities. For the latter company, consumers were skeptical of the corporate responsibility activities, suggesting that the company should be more concerned about their product quality than corporate responsibility activities.
McKinsey goes on to outline three basic principles that leaders should follow to increase the likelihood their stakeholders will positively and accurately interpret corporate responsibility activities:
- Don’t hide market motives: Companies can achieve profitable core business and corporate responsibility initiatives at the same, without tradeoffs.
- Serve stakeholders’ true needs: Stakeholders are drawn to companies whose corporate responsibility initiatives produce solid benefits, both tangible and intangible. The key is to set realistic expectations that can be met, as well as create programs together with stakeholders.
- Test your progress: Companies should assess its progress regularly to make sure everyone’s goals are aligned.
What do you think? Are these basic principles necessary for companies to have positive experiences with corporate responsibility activities and stakeholders wants/expectations? Discuss!
December 12, 2011 at 4:22 pm brownflynnwinner Leave a comment
