Part 4 28th Annual SRI Conference

Part 4 28th Annual SRI Conference: My Notes

In North America, large companies are generally the ESG leaders. 131 of the S&P 500 are publishing substantive sustainability reports. 140 of 500 are using GRI standards. About a quarter of companies now use some ESG measure in determining executive pay.  Unfortunately, most are focused just on the single issue of safety within that framework. About half address environmental issues, whereas those addressing diversity are far fewer.

Most companies are not proactive on ESG issues but are reactive.  Research shows the fallacy of that reactive thinking: Earnings per share are 18% higher with 13 or more women on board (if I heard right). Disclosure is #1 concern and the regulatory framework is inadequate. Board should be concerned with and make known its strategic interest in the company. That is inherent in strategy. The only countries reaching gender parity are those where it has been mandated. (Review: Getting Women on to Corporate Boards)

Publisher: Frankly, I don’t understand why America has not joined other countries in simply mandating something close to equality. Of course, I also believe in paid sick and parental leave, as well as universal health insurance. (How U.S. Employee Benefits Compare To Europe’s)

Performance improved with women/minorities on board. In December 2009, the SEC took steps to enhance the information that companies provide to shareholders in connection with the solicitation of proxies. Amendments required public companies to make new or revised disclosures about compensation, qualification of directors, the board’s leadership structure and role in risk oversight, and board diversity policies, (gender, age, geographic, etc.) 

Currently, only about 16% of directors in the S&P 1500 are women, 10% minorities. Most directors are in their 60-70s. More than half have only directors in their 50-70s. Pressure to voluntarily disclose in matrix 300 companies provide in proxy is coming from NYC pension funds. CalSTRS is among the most active on gender diversity. California’s resolution SCR 62 calls on companies to have at least three women on each corporate board.

More funds are looking to disclosures to see what boards consider in recruitment and nomination. Companies should be documenting in 10-K, proxy, etc. NextGen Directors Program – designed to accelerate the development of diverse high impact future board leaders. We really need to put more pressure on smaller companies, since they are lagging.

Women make up half the workforce; minorities about a third but they/we are underrepresented. Companies should want the best people. If they are not looking at women and minorities, they are not getting the best. The 30% Coalition was formed to address that issue. Since Jan 2012, the Coalition has sent letters to 165 companies. See reports issued.

On behalf of NYC pension funds, New York City Comptroller Scott Stringer sent a letter to 151 companies seeking engagement around a range of disclosures regarding the race and gender of company directors, the creation of a standardized director skills matrix and details of those companies’ director evaluation and succession plans.

State Street voted against NomGov committees at 400 companies. What gets measured gets managed.  Break the pattern of groupthink.  Compensation – if you get paid for it, you’re working on it. Ceres report on training the board on sustainability. Proactively disclosing that you are recruiting women and minorities… That is a must.

Greater integration of diversity inclusion by linking exec compensation was discussed. Transparency… a comprehensive report is needed, not just a CSR report. Efforts should also be described in other reports and the proxy statement and integrated into formal structures, including supply chain, through Nominating/Governance committee. Accountability – system level solutions. Social impact programs – underserved youth, assisting people in developing countries. Capacity building: how integrated on governance, investor relations, and sustainability teams?

Just about every panel at the 28th Annual SRI Conference in San Diego was amazing (#AllinForImpact on Twitter). This panel was even better. Of course, all the panelists were tops in their respective fields but Coro Strandberg was outstanding as a moderator… assertive with a quirky sense of humor. She really helped focus the discussion.

Part 4 28th Annual SRI Conference Alice Tepper Marlin: Investing for a Better World

The sustainable, responsible, impact investment industry is enjoying healthy growth and beginning to fulfill the vision of 1968. So where are we with impacting companies and the global economy? And what about today’s lead disruptor companies? Will they provide a ‘boost’ or be a ‘bust’ for sustainability? Can the SRI community affect the outcome? Alice Tepper Marlin discussed these issues and more.

One in five investment dollars uses SRI factors. Never lose sight of that earthrise photo. Alice created Shopping for a Better World, is on the board of Social Accountability International. TenSquared helps teams of workers and managers meet ambitious occupational health and safety goals in 100 days.

There is a lack of disclosure on sustainability at Amazon compared to Walmart. 12% of Amazon costs come from transportation. Both need to build fleet with electric vehicles and indicate which products are rated high re sustainability.