Ceres 2021: Trends and Direct Actions

Every year hundreds of delegates flock to an annual conference hosted by Ceres, the influential non-profit organization, to strengthen the business case for sustainability.

The institutional investors, corporate executives, policy-makers and regulators arrive en masse to embark on a week of workshops, panels and seminars to help build a sustainable future for people and the planet.

The conference was held virtually for the second year running and Jordan Locke, a Consultant within our Responsible Investment and ESG practice, was on hand to gather valuable insights, trends and direct actions that policy-makers, corporations and institutional investors are undertaking during such a crucial year. ​

Non-Profits

The non-profit community is a vital part of Ceres network and there was no shortage of big announcements from them this year. ​

The Climate Action 100+

Climate Action 100+’s first net-zero company benchmark for the world’s largest corporate emitters was announced during the conference, giving great insight into the progress large corporations are making, or not making, towards their commitments to net-zero. ​

Highlights include: 

• Only 52% of companies surveyed have announced an ambition to achieve net-zero emissions by 2050 or sooner, with roughly half of those commitments not covering the full scope of companies’ most material emissions

• Corporate boards and executive management teams need to improve climate change governance. 87% of respondents have board-level oversight of climate change, but only a third tie executive remuneration direct to the companies’ emission reduction targets 

• Ambitious 1.5C pathways are often missing from climate scenario planning

• 72% of companies assessed commit to align their disclosures with the TCFD (Task Force for Climate-related Financial Disclosures)

• Only 10% use climate scenario planning that includes the 1.5C scenario and encompasses the entire company

The All We Can Save Project

• Co-Founder Dr. Katherine Wilkinson spoke with Loren Blackford, Chair of The Sierra Club Foundation Investment Committee about the beginnings of the project aimed at addressing the rampant underrepresentation in the climate change community, particularly among women 

• Dr. Wilkinson is making the case that women’s voices are vital agents of change in climate movements and that grave consequences arise when these voices are not heard 

• The project’s vision: by 2030, women leading on climate change will hold the power to create transformational change and will experience deep joy in their work to build a just and liveable future​

Corporations

This year’s conference saw some careful but positive messages from some of the world’s largest corporations across manufacturing, electronics, textiles and energy producers.​

• Bill Ford announced a $22bn commitment towards electric vehicles over the next 4 years, on top of a previous $11bn commitment two years ago 

• BP’s CEO Bernard Looney talked about the challenges in scaling renewable energy sources once power grids reach 60% - 70% renewable power as opposed to where we currently sit: around 10%. He also talked about BP’s long-term goal of shifting the company from fossil fuels to being a one-stop shop for renewable power 

• US Steel – Senior Vice President and Chief Strategy and Development Officer – Richard Fruehauf stated the company’s commitment to reducing GHG intensity and unveiled the company’s new sustainable steel product line, verdeX, which will produce some of the most advanced high strength steels with only a quarter of the CO2 emissions previously required 
  

  Apple’s Lisa Jackson – VP of Environmental, Policy and Social Initiatives and former Administrator of the EPA talked about Apple’s $100m pledge for Racial Equity and Justice which will include: 

  • A developer academy to support coding and tech education for students in Detroit

  • The Propel Center, a learning and global innovation hub for HBCUs 

  • $10m investment into Harlem Capital, a young venture capital firm with a mandate to fund companies with diverse founders 

  • $25m in Siebert Williams Shank’s Clear Vision Impact Fund which provides capital to small and medium-sized businesses with an emphasis on minority-owned companies 

• Levi Strauss’s Una Murphy, Director of Design Innovation, talked about how Levi’s is making circularity the center of its brand by tracking new sustainable technologies, building new ways to collect and recycle its clothes and its new Second Hand Campaign: a new platform which allows consumers to buy previously loved and worn clothing direct from Levi’s 

• Ikea’s Sustainability Manager Jennifer Keeson talked about how the iconic furniture brand has invested €600m into sustainable companies across its supply chain. In addition, Ikea has set the goal to become a climate positive business by 2030. To achieve this, Ikea has implemented furniture buy-back programs to reduce waste and is working to make its designs last longer by sourcing better, more sustainable materials and ensuring spare parts are more accessible to consumers.

Policy-makers and Regulators 

Nearly every session touched on the imperatives for US companies to take sustainability and net-zero commitments seriously now that the United States has re-joined the Paris Climate Accord. Encouragingly, the Biden Administration has made climate change a top priority and we saw a veritable parade of representatives at the federal and state level talk about upcoming initiatives and policies to meet those priorities. The main point was this: the goals of the Paris Agreement are great, but they are not in enough order to stop the global average temperature from rising above 1.5C.​

Highlights: 

• Federal Reserve Governor Lael Brainard announced that the Federal Reserve will establish a new panel to assess and address risks to financial stability from climate change. As weknow, the Federal Reserve moves notoriously slowly, but this is a huge signal that the US central bank is intensifying its efforts to manage risks to the financial system from climate change 

• Newly appointed EPA administrator Michael Regan spoke on his first two weeks on this job: 

  • He proudly declared “science is back” 

  • Priorities include new GHG standards for gasoline-powered cars 

  • Proposal for light and commercial vehicle emission standards by July 

  • Most immediate goal: rebuilding the moral of the agency after spending the last four years rolling back major environmental regulations 

  • Making inequality and social justice an imperative of the EPAs focus, building on his earlier work at the North Carolina Department of Environmental Quality in establishing North Carolina’s Environmental Justice and Equality Board 

• Peg Hanna, Assistant Director of Air Monitoring and Mobile Services for the NJ Department of Environmental Protection:

• NJ commits to 100% carbon neutral electric generation by 2050 

• Tony Brasil, Transportation and Clean Technology at the California Air Resources Board talked about the feasibility of their core strategy of zero emissions everywhere and focusing on communities that are most polluted and affected by transmission

• Federal Highway Administration’s Assistant Director Stephanie Pollack focused on how highways have disproportionately affected minority communities and communities of color. A big focus is use of right of way. They want to reimagine the right of way as more than just for cars, adding charging stations, renewable energy generation in both the median and areas surrounding the highways ​

Banking and Investment Community​

The main theme we found was that the banking and investment community has woken up to the importance of Responsible Investment and the momentum is now on our side, but this is only a start. ​

Highlights included: 

• Is passive ETF investment enough? In a panel with BP CEO Bernard Looney, Jeff Uban, founder of Inclusive Capital Partners and founder of ValueAct Capital made the point that we are not going to change the world by investing in ESG-focused index funds or ETFs; we need to continue to get the Active Investment Community involved 

• Data and reporting were huge topics of discussion throughout the week 

  • We heard a lot about commitments from some of the largest Asset Managers out there including Ares, Wellington, Carlyle Group and Nuveen, but how are they going to ensure they reach these commitments? 

  • In order to achieve Paris Aligned portfolios, asset managers need to be confident in the data provided by their PCs and GPs, as well as demanding more disclosures 
    

    Reporting frameworks, such as TCFD, are great at providing a narrative when it comes to disclosures by showing data on governance, strategy, risk management and climate targets; however, these frameworks have previously left out accounting: where is capital being deployed? Moving forward, Auditors will be playing a crucial role in sounding the alarm when accounts are not calibrated for a net-zero pathway. 

  • Moody’s is launching its first ESG Credit Rating this year, in an effort to assist in transparently and systematically showing a business’s ESG health and its corresponding impact on that business’s credit

  • Capital Allocation is what ultimately matters in order to achieve net-zero​

At Ceres 2021, the broader climate, water and human rights challenges that we face globally could not be made clearer and it was inspiring and energizing to see that the movement that Ceres has spearheaded has reached a critical inflection point. A lot of the key players needed to address these monumental challenges were front and center during the conference, showing how they are working together to address these challenges head on. We look forward to seeing the progress made at next year’s Ceres conference. ​

If you attended the conference and wanted to discuss or were keen to speak further on the business case for sustainability, please get in touch with Jordan Locke at jordan.locke@acre.com or call directly at 917-728-1352.