We want to change the way boards of directors look at sustainability. Sustainability has never been a governance issue. We’ve called on the SEC to require companies to have better disclosure on sustainability risks like climate, water, and biodiversity. They are actively considering this. There’s no reason for depleting our natural resources, because we’re not going to have enough of them to run our economy. We need to look at those as real financial risks plaguing our economic markets. So all we’re calling for is the SEC to require better disclosure of material risks around sustainability, and for the New York Stock Exchange to require companies that are listed on the stock exchange to not only disclose other information about who they are, but also about sustainability. Doing so will make sure that analysts, when they’re reviewing whether or not to invest in company X or company Y, are looking at the risks and the opportunities of sustainability issues.
CBM: Do your coalition companies make these disclosures now?
ML: Not all of them, and partially because they’re not asked to. The SEC hasn’t elaborated on the material risks that need to be disclosed in their filings. Every company Ceres works with does its own voluntary sustainability report. And they’re doing a good job, and it’s focused on metrics and material issues and about setting goals. But in the end, it shouldn’t be the case that one company does these things and another company doesn’t. If this is a material risk and these numbers matter, then all companies should be asked to do it. And if not, then no company should have to do it.
CBM: Do the companies in the Ceres coalition use the GRI-based sustainability report that Ceres created?
ML: Most of them do use all of it or part of it. Ceres, as you said, designed and built the global reporting initiative. We spun it off in the early 2000’s to be its own independent standard-setting body. Our goal is to get companies to disclose their sustainability impacts on anything from environmental sustainability issues to worker safety, and then to put them in a document and make it available to the public, to shareholders, to large investors, and so on. Every company that we work with as a Ceres company does a sustainability report, and almost all of them are built off of the global reporting initiative.
CBM: How many Ceres companies are there, Mindy?
ML: There are about 80 Ceres companies, and we’re talking to 45 or so others. Our job is to see as many companies integrate, from the boardroom to the copy room, sustainability programs.
CBM: Do you recruit companies, or do companies approach you?
ML: It’s a combination. We do look at the high impact sectors and say even though these companies may not be the greenest companies, we want to work with them because we can have the biggest impact, and we may go to them or they may come to us. It really varies.
Last year, we did a study on how the top 40 financial institutions are dealing with climate change. Once the report was out, every company that was benchmarked nearer the bottom called to say, “My CEO doesn’t want to see us in the bottom quartile next year; how can we work with you to learn how to get the sustainability metrics right within our firm?” Sometimes activist shareholders file shareholder resolutions for the company, saying they want a sustainability report because they think that’s necessary information. And once a company thinks of that, they turn to us, because Ceres is one of the leading organizations that works with both companies and investors.
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