Earth Day 2016 and the Good News

New Beginnings

The first Earth Day was held in 1970, organized by Wisconsin Senator Gaylord Nelson, after witnessing the Santa Barbara oil spill.  Mobilizing activist students, Senator Nelson proposed a national teach-in on the environment to send a message to Washington that the American people demanded a stop to polluting the planet. 

 

By 1971, my friends and I, as young hippies working on anti-war, civil rights and police corruption in Augusta, Georgia, had mixed feelings about Earth Day.  Our counter-culture coalition, growing like “Kudzu” vines across the deep south, was just starting to fight environmental destruction.   In middle Georgia, we were becoming more aware of the nuclear spills and accidents of the horrific DuPont-managed Savannah River Plant, a dirty nuclear

 

reservation and Leukemia hot-spot, and the destruction of forests and farms around our towns, part of the highways, clover-leafs and giant malls of urban sprawl (fueled by white flight).  The great Athens, GA. band REM would later memorialize a Southern take on the damages of modern times, penning several environmental anthems.

 

But to some of us, Earth Day felt like a bourgeois happy dance that would take attention away from the more “important” issues of the day.  Indeed, the feel-good of the first Earth Day was blown away a few weeks later by Nixon’s invasion of Cambodia and the Kent State killings. 

 

But over time, a boatload of students and hippies got on board, building grass-roots momentum, and the environmental cause became a massive global campaign that, for nearly half a century, has protected lives, our habitat, and has changed laws:

 

The first Earth Day on April 22, 1970, activated 20 million Americans from all walks of life and is widely credited with launching the modern environmental movement. The passage of the landmark Clean Air Act, Clean Water Act, Endangered Species Act and many other groundbreaking environmental laws soon followed. Twenty years later, Earth Day went global, mobilizing 200 million people in 141 countries and lifting environmental issues onto the world stage. More than 1 billion people now participate in Earth Day activities each year, making it the largest civic observance in the world (http://www.earthday.org).

 

Today, the “E” in ESG stands for the environmental leg in the three-legged responsible investment stool (that also includes social and governance).  As we’ve recounted, our Responsible Investor Handbook, commissioned by the AFL-CIO, will be released on July 24, 2016 by Greenleaf Publishing, based in London.  The publisher will mount a collaborative global publicity campaign to promote the new book, which has a lot of ink devoted to best practices in clean economy investing.  This is a very, very exciting development on many levels. 

 

The Timing and Momentum for Responsible Investments

The Handbook is being published at a time when momentum is galvanizing around climate change (along with social inequality and the need for good, sustainable jobs and affordable housing). The Handbook responds to the environmental challenges and risks facing our society, as well as the investment opportunities, and builds on the momentum represented by:

 

  • COP21:  In December 2015, the 21st UN Climate Change Conference of the Parties (COP21), brought together representatives of 195 nations to reach a landmark accord that will, for the first time, commit nearly every country to lowering planet-warming greenhouse gas emissions to help stave off the most drastic effects of climate change.   Today, they will sign that final agreement.

  • US Push for Responsible Investment:  Over 1,500 global asset owners and asset managers, representing $60 trillion in assets, have now signed the UN-backed Principles for Responsible Investment (UN PRI).  Fiona Reynolds (pictured above addressing guests at the UN PRI 10th Anniversary in New York City last week), the Managing Director of the PRI, who provided a testimonial, views the Handbook as a tool to spread the word in the US.  The 10th Anniversary celebration of the PRI, held in New York City last

    week, spotlighted the progress made in sustainable investment by the PRI, which began as a joint project by the UNEP Finance Initiative (UN Environmental Project Initiative) and the UN Global Compact.

  • Renewing Cities:  Our Heartland Network, the sponsors of the Handbook, along with many other responsible investors, is working with cities to facilitate the sourcing of capital for a range of city-building projects across asset classes, including affordable housing, renewable energy, energy efficiency and efficient transportation.  Together, capital stewards are renewing the built environment, reviving the industrial commons and growing the clean economy.

  • Renewable Energy and Sustainable Infrastructure:  The growing market preferences for lower-cost, dependable, renewable energy--and sustainable products and processes--are providing an integrative effect for property development, industrial production and new sustainable infrastructure. The Handbook highlights best practices in that regard.

  • …And the Pope:   Pope Francis, in September, 2015, issued an historic encyclical on combating climate change, blaming “relentless exploitation and destruction of the environment...the reckless pursuit of profits, excessive faith in technology and political shortsightedness.”  In this landmark statement, the Pope linked environmental destruction with the neglect of global leaders to care for the world’s poor.

  • DOL Toughens Fiduciary Duty to Invest Sustainably:  Finally, the US Department of Labor (DOL) issued, on October 22, 2015, Interpretive Bulletin 2015-01, a new guidance that confirmed the legality and importance of economically targeted investments (ETIs) by pension funds under ERISA.  In addition to reversing the terrible Bush Administration rule that clouded ETIs, the new rule adopted a tough new environmental, social and governance (ESG) approach, aligning the US fiduciary investment process with the modern global PRI standard.

  • Labor Movement Push:  In addition to commissioning the new Handbook, unions are increasingly working with their members, signatory companies, and community partners to develop new training and business development opportunities in the clean economy. One of the most advanced initiatives is that taken by the IBEW (International Brotherhood of Electrical Workers), which has collaborated with its signatories through NECA (the National Electrical Contractors Association). In addition to managing some of the most successful solar and wind energy training and installation programs in the US for its apprentices, NECA-IBEW is launching new clean energy financing platforms for its contractors.[1]   Many other unions have joined in with labor-enviro coalitions such as the Blue-Green Alliance (BGA).

 

In Closing…the Huge and Growing Impact of Capital Stewards

Activist pension funds and managers such as CalPERS and NYCERS in the US, ABP and PGGM in the Netherlands, the Environment Agency Pension Fund in the UK, and others across Europe, Australia and elsewhere have invested billions of dollars in innumerable sustainable energy projects in the last decade.  Sustainable investment vehicles like the Ampère Equity Fund, managed by Triodos Bank in the Netherlands, have spawned wind parks on land and at sea and biomass power stations in various Western European countries.  The IFM in Australia, managers of some of the Superannuated funds, owns the largest wind-power projects in Australia.  Responsible capital stewards have been among the world’s leaders in investing in the transition to a cleaner economy.

 

Historic new movements are sweeping our land that bode well. “Making it in America” has become a popular new slogan, from the White House to the local coffee house.  As evidenced by insurgencies in both political parties this Presidential year, Americans support fair trade and consumers want to buy safe, high quality American-made products.  Many economy watchers believe there are signs of a new “manufacturing renaissance” emerging, part of the so-called “re-shoring” phenomenon.  And, there is a vivid sense that people who are concerned about climate and the environment want to adopt  and invest in sustainable solutions.  The “green jobs” revolution will only happen if we make it in America.

 

Important demographic shifts are tipping the scale in favor of responsible investment strategies.  Millennials and Boomers alike are moving back to the city, even rust belt cities, and are moving into transit-friendly multi-family housing.  People are re-thinking urban sprawl and highways to nowhere, and they are reviving and rehabilitating downtowns and urban neighborhoods, and supporting high speed trains and bike lanes. People are harness renewable energy, and they are installing solar panels on their roofs and other smart-house advances. They are supporting community-minded companies and worker-owned co-operatives. They are buying local produce, and they have launched urban agrarian campaigns.  They want the national chains to utilize ethical supply chains and also source more products locally.  And, there is a new movement – across cities and states – to pay workers a living wage.

 

Earth Day 2016 has been a long time coming.  Capital stewards are poised to invest in these hopeful and more durable new future developments.  They can invest in new paths, as we suggest in the Handbook, that rebuild our urban cities, revive jobs-producing industries and bolster the clean economy, and they can mount aggressive actions to mitigate or prevent climate change.  As part of a “paying it forward” approach, responsible investors can collaborate with new community apprenticeship programs that provide career ladders for young people and people of color, and they can supporting new community benefits agreements that share the dividends from investment and economic development.  In light of these trends, opportunities for responsible investment have enjoyed a manifold increase.   Thank you, Earth Day.

 

 

[1] For more information, see http://www.necanet.org/membership/member-benefits-services/tools-resources/neca-energy-conservation-and-performance-platform-(e-cap)

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