Responsible Investor

Ceres: the US investor coalition advising the UN, lobbying the SEC and investing $10bn in renewables

Ceres President, Mindy Lubber, explains how US policy is coming around to its way of thinking on the environment.

Few environmental groups have both the influence to address the General Assembly of the United Nations on climate change issues and the investor clout to lobby the US Securities and Exchange Commission to push companies to disclose environmental financial risks and opportunities. Ceres, the North American environmental investor coalition, has done both in the last month. At the same time, it is pushing ahead with one of the most ambitious investor commitments to date for renewable energy: the announcement in February this year by more than forty leading US and European institutional investors, responsible for over $1.75 trillion (€1.2 trillion) in assets and co-ordinated by Ceres, to collectively deploy $10bn in assets over the next two years, alongside a raft of other green measures.
A McKinsey Global Institute report, released at the Investor Summit on Climate Risk, hosted by the United Nations Foundation and Ceres, where the announcement was made, said major investments over the next decade in energy productivity could earn double-digit rates of return for investors, cut global energy demand growth by 50% and achieve up to half of the reductions of greenhouse gas emissions, the Intergovernmental Panel on Climate Change says is required to prevent the world’s mean temperature from increasing by more than 2 degrees centigrade.

Ceres was born out of the Valdez Principles, a list of ten broad conservation standards issued to companies in response to 1989’s disastrous Exxon Valdez oil spill off the Alaskan coast, where Exxon came in for severe criticism over its clean-up response. The organisation now includes the biggest US institutional investors, including pension giants CalPERS and CalSTRS. In 2003, it launched the Investor Network on Climate Risk, which has 65 investors with assets totalling $5 trillion, including fund managers such as American International Group Investments, Deutsche Asset Management, and State Street Global Advisors.
Mindy Lubber, president of Ceres, says the action ethic underpins its work: “We produced environmental plans in 2003 and 2005 and the follow up to see how they were executed were presented at our subsequent investor summits. We’re conscious we have to ‘do’ rather than just talk and we have monthly investor calls for updates on progress. If you look, for example at shareholder votes on climate change, this year we had 56 resolutions, more than ever before.” She says the weight of assets behind Ceres is key to it being able to influence the investment management industry as a whole: “The fact that large institutions are increasingly demanding that money managers respond to environmental questions in hiring request for proposals (RFPs) is a sure-fire way of making this work.”

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