Highlights and Low Points in 2014
February 12, 2015Strategic corporate environmental management is at a dead end.
Lawyers, certified health and safety practitioners, scientists, and business majors chose career paths in environmental management starting in the late 1960s. For 25 years they steadily shifted industry towards more ecological behavior. They did so under relentless prodding of activist non-governmental organizations and newborn national environmental protection agencies.
The path seemed promising. Many professionals reached the threshold of the C-suite, and a few even crossed over onto the boards of directors.
Starting roughly around 1985, the record became patchy. Political and fiscal counter-pressures slowed progress. Improvements within corporations became erratic.
Then things went sour. Companies, operating through their trade associations, learned to fight back. NGO’s began taking liberties with the facts to sustain their funding base. Contributing to the trend, the loosely defined term “sustainability” elbowed its way onto the scene. Sustainability pushed environment protection out of the media spotlight. It opened up space in corporations to hire and promote public relations agents and communications specialists. The strategic role once envisioned for environmental professionals faded to greenwash.
Today the situation has come to a virtual standstill. Two studies in 2014 drawn clear boundaries around the state of affairs for corporate environmentalism.
Independent consultant Peter Soyka mapped the terrain in the US in his third evaluation of this kind. His research finds that corporate reporting has come to a turn in the road. Not a sharp corner but a gradual curve in the right direction (see U.S. Firms Are Moving Slowly Forward).
Compared with four years ago, the heading of the largest publicly traded corporations is now toward disclosures of more environmental, social, and governance (ESG) issues. Soyka says even more dramatic changes have occurred among smaller and medium-sized companies.
Even so, there is little to crow about. “I do not believe that any of the practices or attributes that I have evaluated or advocate in this report involve anything inherently new, controversial, or beyond the capabilities of most large organizations to understand and implement,” Soyka says.
Not everyone is moving forward. About one-third of the companies listed on the Russell 2000 (665 of 1,987) divulge no information on the topics asked for in Sokya’s system. A significant fraction (100, or 10% of the total of the Russell 1000) continue to score zero, meaning that they do not disclose any of the 43 individual pieces of information he tracks.
In a separate but related study, progress is less and slower than the expectations set in 2010 by the Ceres coalition of faith-based and social responsibility investors. The changes are “incremental change but not transformative.”
The Ceres roadmap of actions set milestones for governance, stakeholder engagement, disclosure, and environmental and social performance. Compared with 15% in the first survey in 2012, 24% of the 613 of the largest US companies evaluated are engaging investors on sustainability issues.
“But we want to see more action sooner,” concedes Andrea Moffat, vp of corporate programs at Ceres. For example, only 35% of the corporations (212 of them) have established time-bound targets for greenhouse gas emission reductions. Investment analysts never ask about sustainability matters during quarterly telephone calls, even if the executive presentation includes a slide on the subject.
Below are some of the high- and low-water marks of 2014 in no particular order as reported by Crosslands Bulletin. Every step forward during the year seemed to be accompanied by at least a step backward.
Subscribers can retrieve the full articles by searching for the titles on the home page.
Though too early to claim success, the program breaks the trend of industry self-labeling schemes proliferating in the US. Case in point: Whole Foods Market, the up-scale high-priced organic (to a large extent) grocery, copied the same name ‘Responsibly Grown’ as EFI did for its self-proclaimed ecolabel. It has nothing to do and nothing in common with EFI’s certification program. Whole Foods is making up its own rules, and not explaining them very well to shoppers and not at all to journalists.
A US federal appeals court ruled against the pharmaceutical industry. The plaintiffs argued that an ordinance in one of California’s 58 counties requiring prescription drug producers to collect and safely dispose of prescription medicines violated the prohibition against barriers to the transaction of business. The decision opened what had been a locked door for drug takeback laws in other states.
Calpers, institutionally, is one of the leading supporters of the Ceres climate campaign. Calpers joined in a special collaboration with Ceres “to use their collective clout to urge the nation’s largest companies to move more quickly to understand global sustainability risks and develop new business models and solutions.”