New Ceres/Sustainalytics Report Shows Most U.S. Companies Falling Short on Sustainability

(3BL Media) Boston - April 25, 2012 - In the first major assessment of progress on a unique Ceres Roadmap to corporate sustainability released two years ago, Ceres and global research and analysis firm Sustainalytics today released “The Road to 2020: Corporate Progress on the Ceres Roadmap for Sustainability.”

The findings - based on an assessment of how 600 U.S. companies are responding to environmental and social challenges such as climate change, water scarcity and supply chain conditions – show individual examples of leadership but significant need for overall improvement.

“While there are encouraging pockets of sustainability leadership in the U.S. business community, far too many companies are only taking small, incremental steps,” said Ceres president Mindy Lubber, in announcing the report at the opening of the Ceres annual conference today in Boston. “Sustainability has yet to gain traction at anywhere near the scale and speed required given the global threats we face.”

“We’re encouraged by the leadership shown by some companies and expect that their success will spur others to better leverage sustainability to identify risks and seize opportunities in an increasingly competitive global marketplace,” added Michael Jantzi, CEO at Sustainalytics, who joined Lubber in announcing the report.

The report evaluates companies based on specific expectations in the “The 21^st Century Corporation: The Ceres Roadmap to Sustainability,” a how-to guide for companies to achieve sustainability by 2020. The evaluation was based on company data available as of Dec. 31, 2011.

The report highlights dozens of company examples in hopes of inspiring others to take similar actions. For instance, Alcoa, Xcel and Intel are relative pacesetters in sustainable corporate governance practices; Baxter and Ford are setting a high standard in stakeholder engagement; and Exelon, Nike and the Coca-Cola Company are ahead of the pack in performance on metrics for reducing environmental impact and improving workers conditions.

Intel is cited specifically for linking executive and employee compensation to company environmental goals such as reducing energy use and greenhouse gas (GHG) emissions; in the two years since it started the program, the company has cut energy use by 8 percent and GHGs by 23 percent.

Coca-Cola is credited for being on track to meet its ambitious performance goal of improving water efficiency by 20 percent by the end of this year (against a 2004 baseline.) Other cutting-edge performance examples: Nike’s new partnership to implement a water-free fabric dyeing process, Kohl’s Department Stores achievement of net-zero greenhouse gas emissions at its stores, Pinnacle West using recycled urban wastewater (about 20 billion gallons a year) to cool its Palo Verde nuclear power plant and EMC building a new energy-efficient “virtual data center” to move data from physical storage to an entirely virtualized IT infrastructure (the shift has already saved the company more than $23 million).

But in the report’s four-tier assessment system, just a quarter of all companies surveyed were in the top two tiers for progress on governance, while 24 percent have some degree of meaningful stakeholder engagement. On corporate performance metrics, only 13 percent of the companies evaluated on human rights policies and programs were ranked in the top two tiers. And just a third of the 600 companies had time-bound targets for reducing greenhouse gas emissions in direct operations.

Lubber and Jantzi said companies are missing a big opportunity by not fully embracing sustainability. “We see it as a world of opportunity for companies to improve competitiveness, realize large savings through energy efficiency, invest in their workers, strengthen their supply chains and, in many sectors, reap the benefits of the enormous investment opportunities in clean technology and clean energy,” they wrote in the report.

Anne Stausboll, CEO of the California Public Employees’ Retirement System (CalPERS), echoed the sentiment, saying: “The future will belong to innovative companies that understand that building long-term shareholder value and being an industry leader requires the integration of sustainability principles at every level, from the C-suite to operations and throughout supply chains.” CalPERS is the nation’s largest public pension fund with about $235 billion in assets under management.

The report provides a framework for investors who can use the report’s findings, case studies and sector trends to inform their decision-making and engagement strategies.

 In the end, wrote Lubber and Jantzi, closing the sustainability gap “will require a collaborative effort among investors, businesses, non-governmental organizations and other stakeholders concerned about the future of the planet and the economy.”

All four groups, more than 500 strong, were on hand in Boston today for the start of the annual Ceres conference at which the “Road to 2020” report was unveiled.

The new “Road to 2020” report can be found at: www.ceres.org/roadto2020.

An agenda and other information for this year’s Ceres conference are at: http://www.ceres.org/conference

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Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $10 trillion. For more information, visit http://www.ceres.org and http://www.incr.com

Sustainalytics provides environmental, social and governance (ESG) research and analysis as well as responsible investment services to investors around the world. The firm offers global perspectives and solutions that are underpinned by local experience and expertise, serving both values-based and mainstream investors that integrate ESG information and assessments into their investment management. www.sustainalytics.com