The Role of NGOs in IO

1
The Role of NGOs in IO

• An in-depth look at Ceres Investors and
  Environmentalists for Sustainable Prosperity
• By J. H.

2
What is Ceres?

• NGO created in 1989
• Ceres is a national network of investment funds,
  environmental organizations, and other public
  interest groups working to advance environmental
  stewardship on the part of businesses.
• Ceres' mission is to move businesses, capital,
  and markets to advance lasting prosperity by
  valuing the health of the planet and its people.

3
Core Values

• Ceres works closely with a select group of
  companies that have made public commitments to
  stakeholder engagement, public disclosure, and
  performance improvements. The 85-member Ceres
  coalition and their 70-plus partner companies
  share these core beliefs
• environmental stewardship and company value are
  strongly linked
• the bedrock of sound corporate governance is
  measurement and disclosure
• responsible companies must provide their
  investors and stakeholders complete and
  transparent information about their environmental
  performance.

4
In My Own Words

• Ceres is trying to move the corporate and
  investor world down a path where environmental
  and social issues are included as business risks
  that need to be analyzed measured and figured
  into accounting statements
• By including environmental performance as a
  financial liability Ceres hopes to create a
  system of free market forces that moves all
  business towards sustainable prosperity

5
How Can this Be Done?

• What is measured in managed
• Looking at the long-run vs. Short-run
• Sustainability issues are financial issues

6
What Is Measured is Managed

• The measurement of Oart

7
Systems of Measurement

• The GRI
• 700 Companies World Wide
• Report On Economic Environmental and Social
  Performance Indicators
• The FRP
• Pilot testing stage
• For reporting on the facility level
• Currently about eight pilot testers

8
Benefits of Reporting

• Transparency
• Credibility
• Interaction with stakeholders
• Marketing tool
• Internal Increased awareness about economic
  environmental and social performance

9
Long Run Vs. Short-run

• Sustainable Profitability rather than big profits
  now and no profits later
• Ceres is trying to educate investors and
  shareholders so that sustainable business is not
  punished for quarterly reports that may not reach
  immediate goals due to a company vision of trying
  to create sustainable returns in the long run
• Ceres created a Network of Investors called The
  Investor Network on Climate Risk worth 2.7
  Trillion dollars

10
Example

• Timber Industry
• Sustainable Forestry vs. Liquidation Logging
• The Harwood Products Story
• The creation of Sustainable resource based
  communities

11
Sustainability means Profitability

• Managing the Environment in a sustainable manner
  and long-term profitable performance are two
  issues that go hand and hand yet in many
  corporate board rooms these two subjects are
  thought of as separate issues and obviously
  financial profitability comes first.
• In 2002 Ceres created a Sustainable Governance
  Project to raise sustainability issues as
  significant financial risks that must be
  addressed by corporate boards and investment
  fiduciaries.

12
Example

• The Coca-Cola company
• Unsustainable use of water in many developing
  countries.
• After weighing the cost of creating sustainable
  water use processes and the financial effect of
  continuing business as usual the company decided
  that it was a sound investment to spend the money
  now to assure the long-term stability of their
  company.
• Created community stakeholder engagement at the
  facility level to address local water issues
• Funded water awareness programs at school and
  created clean water programs in northern Kenya

13
http//www.ceres.org/ceres/

• In 1989 this process of shifting the world
  accounting, investment, and governance systems to
  include sustainability issues was thought of as a
  100 year evolution of ideas
• It is happening now!!
• Investors, Corporate leaders, Environmentalists,
  and NGOs are setting together at the same table
  and no matter what each groups motivation is, the
  ultimate goal is the same to make sustainability
  pay
• Our children's future depends on it!!