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Investors Advancing a Green Agenda in U.S.

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Posted on May 24, 2011

As more than 500 venture capitalists, asset management and investment firms, organized labor, and sustainability professionals gathered for the 2011 CERES conference in Oakland, the message to publicly-traded companies was clear: go green or go home.

CalPERS and CalSTRS, the giant California pension funds that have a combined $500 billion in assets, announced that they would integrate environmental, social and governance (ESG) into their investment strategies. The AFL-CIO announced it was joining a significant number of investors to encourage companies in the Russell 1000 to adopt the CERES Roadmap to Sustainability.

More than 100 investors with more than $10 trillion in assets now participate in CERES’ Investor Network on Climate Risk program. This program partners with investors to advance opportunities and reduce material risks posed by sustainability challenges. Last year the program successfully lobbied the Securities and Exchange Commission to issue formal guidance to companies requiring climate-change disclosures.

 

Peter Knight, head of former Vice President Al Gore’s Generation Investment Management Group, predicted that the majority of U.S. investment and pension groups are at most five years away from requiring companies to integrate social and environmental issues into the core DNA of a company.

Absent federal legislation that would create some type of level playing field requiring companies to reduce their greenhouse gas emissions, investor action as suggested by Knight will potentially have a significant impact on business. Under this scenario, the early leaders that voluntarily integrate social and environmental issues into their long term business strategy stand to reap market and reputation position, as well as attract higher levels of investment.

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