30 Years Later, Investors Still Lead The Way On Sustainability
Three decades after the ground-breaking investor response to the Exxon oil spill, we must take stock of how much we have achieved in tackling sustainability challenges and how much work still needs to be done.
Thirty years ago, a massive Exxon Valdez oil tanker spilled nearly 11 million gallons of oil into the pristine Prince William sound off Alaska’s coast, affecting 1,300 miles of coastline. It was the worst oil spill in the history of the United States. Local ecosystems were devastated, hundreds of thousands of birds and fish were killed, and the corporation was hit with more than a half billion dollars in liabilities.
Just one year before, Americans heard congressional testimony about a buildup of carbon dioxide and other industrial greenhouse gases that were gradually warming global atmospheric temperatures and starting to change the climate. In cities across the U.S., residents complained of smog and air pollution that were limiting their visibility and harming their lungs. Congressional leaders responded with amendments to strengthen one of the most important environmental laws to regulate air quality, the Clean Air Act.
The devastating news of the oil spill also struck a chord with a small group of investors who knew there had to be a better way of doing business. These investors, led by pioneer Joan Bavaria, began to mobilize as a coalition, bringing together other investors and environmentalists to re-evaluate the role and responsibility of companies as stewards of the environment and agents of economic and social change. The coalition, initially named the Coalition for Environmentally Responsible Economies, later became known as Ceres.
Within just a few months, these founding investors worked with environmental groups to craft a groundbreaking code of conduct for companies called the Ceres Principles (originally named the Valdez Principles). Ceres then co-founded the Global Reporting Initiative (GRI), setting the standard for corporate sustainability reporting, now a mainstream practice used by nearly 13,400 companies. Within a decade, environmental and social issues were being considered and reported on as corporate financial imperatives, not merely externalities. The new frameworks for reporting highlighted the risks and opportunities - providing the tools to not only measure corporate performance on environmental, social and governance (ESG) issues, but also act on them.
As we mark 30 years since the ground-breaking investor response to the Exxon oil spill, and Ceres’ founding, we must take stock of how far we have come, and how much we have achieved in tackling some of the greatest sustainability challenges. Investor action on sustainability is no longer a sideline endeavor. Investors working with Ceres have made real inroads shifting capital market systems and incentives to promote sustainability, including by addressing climate-related risks such as those associated with fossil fuels.
Yet there is much more work to be done, building on this strong foundation. In order to keep global temperature rise to no more than 1.5-degrees Celsius, consistent with the Paris Agreement, we must drive transformation at a pace and scale the world never has seen before.
We must all recognize the power of our investable dollars to accelerate the transition to a just and sustainable global economy that ensures a livable planet for all of us. Going forward, we need investors to step up their efforts and join an all-hands-on-deck effort by all economic sectors, all governments, and all segments of society.
Mindy Lubber is CEO and President of Ceres. Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy.