Let me 'fess up. The state of the environment sometimes gets me down. But to be fair, Earth's vital signs would drive any respectable emergency room doctor into a state of utter panic. Globally, two thirds of ecosystem services, such as freshwater, pollination, natural hazard regulation, have been degraded in the past 50 years. Annual rates of growth in yields of many basic crops have declined over the past 20 years. The effects of global climate change are already being felt around the world.
But attending the Ceres annual conference this week gave me a refreshing dose of optimism. Ceres, a coalition of investors, environmental organizations, and other public interest groups, drew together hundreds of businesses, investors, and non-profits to share innovative approaches for corporate sustainability. Here are three rays of hope from the conference.
The flagship report of the conference was The Road to 2020: Corporate Progress on the Ceres Roadmap for Sustainability. This report evaluates how 600 large publicly traded companies are progressing along the Ceres sustainability roadmap. If you've seen the report's headlines, "businesses failing," "businesses falling short," and "disappointing results," you might be wondering where my ray of hope is in all this.
Well, here is the deal. By tracking and publicly reporting companies' progress along the roadmap, Ceres has created a powerful tool to drive corporate progress in the race to sustainability. Imagine if their more than 100 investors use it to inform how they invest $10 trillion dollars, or if the 130 civil society organizations in the Ceres coalition use it to focus their advocacy and campaign efforts? The roadmap also provides much needed guideposts to companies currently wandering in the dark as they seek a more sustainable path forward.
During the conference, participants discussed a number of practical tools to facilitate corporate sustainability efforts. Ceres and WRI teamed up to showcase how our respective tools, Aqua Gauge and Aqueduct, can provide an integrated approach to assessing and managing water risk. The WRI Aqueduct tool maps indicators of geographic water risks, complementing the Ceres Aqua Gauge framework for assessing companies' response to water risk. Together they enable investors to compare water risks across geographic regions and companies.
Another promising tool, especially for those skeptics who believe people are only motivated by money, is linking executive pay to sustainability performance. While this is still a rarity, several companies are blazing a trail on this dimension of good governance, including: Intel, Excel Energy and Campbell Soup.
Of course tools are just means to ends. But they can both speed up the achievement of the ends and generate more effective results. The greenhouse gas accounting standards and tools developed by GHG Protocol over the past decade is a case in point. We have progressed from companies unaware of their emissions to companies reporting on their emissions, on to companies setting reduction targets and more recently companies expanding their reduction ambitions to their value chains and products. Which brings me to my next ray of hope...
Ten years ago, it was rare for companies to focus their sustainability efforts beyond their own direct operations. Today, it is increasingly accepted that corporate responsibility does not stop at the factory gate. One way WRI is helping companies look beyond their direct impacts is the release of two new GHG Protocol standards to measure value chain (scope 3) and product-level greenhouse gas emissions.
For many companies, it turns out that the majority of sustainability risks and opportunities reside in their value chains. Levi Strauss & Co., for example, released a white paper at the conference on its efforts to improve the health and well-being of workers in factories in its supply chain. And Levi's is just one example; a session on building sustainable supply chains overflowed with corporate representatives sharing their experiences at the Ceres conference.
Ultimately we need all companies, not just the leaders, to make sustainability part of their corporate fabric. That will require changing the rules of the game. This is where governments must play a key role, ensuring that policies and incentives are aligned with driving more sustainable business action. Leadership companies should add their voices to those advocating for more progressive environmental and social policies. Such policies will also benefit them because they are better positioned to compete under new rules than the laggards.
Now if that happens, we really will have something to be hopeful about.