Index
Numbers
10-K, 203
2010 BP oil disaster, 11
A
absence of alignment with financial value drivers or endpoints considered by financial sector stakeholders
EHS, 32
accounting perspective, environment and finance, 270-271
activist investors, 44
AEP (American Electric Power), 86, 337-338
AMD, 49
analysts
influence on corporate behavior, 143-144
antitrust laws, 190
applying life-cycle approaches and perspectives
appropriate management approaches
needs, 322
aspects analysis, management systems, 169-170
assurance of compliant behavior
needs, 321
auditors, 204
B
back-end costs, costs of complying with EHS, 92
Bailey, Paul, 90
balanced scorecards, 225
balance sheets, 202
barriers to ES&G investing, 239-247
behavioral economics, 191
behaviors of corporate sustainability leadership, 6
beliefs of
benefits of sustainability reporting, 329
“best of the rest,” ES&G investors, 235
Board Committees, 171
bond rating, 224
Boston Consulting Group, 295
BP, Deepwater Horizon explosion, 25, 126
Brown Marshall Plumlee Index, 275
Brundtland Commission, 17
business value orientation, corporate DNA (integrating sustainability), 181
C
CAA (Clean Air Act), 60
Calvert Investments, 237
capability
barriers to ES&G investing, 241-242
leveraging through cross-functional teams, 366
size and composition of, 197-201
Carbon Disclosure Project (CDP), 207
Carson, Rachel, 60
cash flow statements, 203
CDP (Carbon Disclosure Project), 207-208, 323
CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act), 60, 77
CERCLIS, 313
characteristics of CSOs
courage of conviction, 378
critical thinking and analysis skills, 374
empathy, 379
intellectual curiosity, 376
open-mindedness and flexibility, 378-379
strategic thinking, 372
team building and leadership, 374-375
technical expertise and cross-functional understanding, 373
Chief Sustainability Officers (CSOs), 372
characteristics of
courage of conviction, 378
critical thinking and analysis skills, 374
empathy, 379
intellectual curiosity, 376
open-mindedness and flexibility, 378-379
strategic thinking, 372
team building and leadership, 374-375
technical expertise and cross-functional understanding, 373
Clean Air Act Amendments of 1990, 65
Clean Air Act (CAA), 60
Clean Water Act (CWA), 60
C-level executives, 171
commitments, ES&G data, 311
communication, 8
communication skills, CSOs, 375-376
communities, stakeholders, 117
influence on corporate behavior, 133-136
competitive dynamics, revenue, 94
compliance, ES&G information, 317
compliance obligations, corporations, 74
pollution control engineering and processes, 74-75
record-keeping, 78
testing/evaluation, 76
training, 77
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 60
ConAgra Foods, 173
connectivity, 44
consolidating and improving metrics, KPIs (ES&G), 352
consumer demands, stakeholders (expectations and nonlegal requirements), 87-88
consumer surplus, 189
content/subject matter, ES&G information
compliance, 317
emissions and waste management, 316
resource consumption, conservation, and recovery, 316
safety, 316
contingent costs, 93
core requirements, sustainability professionals, 371
corporate, ES&G reporting, 330
corporate behavior, influences on
customers, 132
corporate DNA, integrating sustainability, 178-180
business value orientation, 181
honesty, 182
optimism, 184
transparency, 183
corporate executives, attitudes and beliefs, 294-298
corporate/financial results, 313
corporate governance, sustainability, 26
Corporate Responsibility, 347
corporate social responsibility. See CSR
corporate sustainability leadership
behaviors of, 6
corporations
compliance obligations, 74
pollution control engineering and processes, 74-75
record-keeping, 78
testing/evaluation, 76
training, 77
clarity to complex issues, 27
value creation orientation, 27-28
cost
back-end costs, 92
image and relationship costs, 93
operating costs, 91
regulatory and voluntary program costs, 92
upfront costs, 92
contingent costs, 93
of environmental regulations, 65
potentially hidden costs, 92
CRD Analytics, 347
credibility, 114
criminal liability, 80
cross-functional teams, leveraging capability, 366
CSOs (Chief Sustainability Officer), 4, 372
characteristics of
courage of conviction, 378
critical thinking and analysis skills, 374
empathy, 379
intellectual curiosity, 376
open-mindedness and flexibility, 378-379
strategic thinking, 372
team building and leadership, 374-375
technical expertise and cross-functional understanding, 373
CSR (corporate social responsibility), 2, 20
cultural DNA, 190
customer and supplier relationships, 100
customer expectations, ES&G, 49-50
customers, stakeholders, 116
influence on corporate behavior, 132
CWA (Clean Water Act), 60
D
data and information providers, 254
debt/equity ratio, 224
Deepwater Horizon explosion, 25
demographics, ES&G (research and analysis firms), 340-342
disclosure, 201
DJSI (Dow Jones Sustainability Index), 347
Dow Jones, 347
dual nature, 153
dynamic situations, sustainability professionals, 369-371
E
Earth Day, 58
eco-efficiency, ES&G evaluation principles, 235
Economic Value Added (EVA), 225
economy versus environment, 125-127
efficiency ratios, 223
EGS, inadequate knowledge in science, 38
EHS (environment, health, and safety), 2-5
absence of alignment with financial value drivers or endpoints considered by financial sector stakeholders, 32
corporations, sustainability, 28-29
inadequacy of corporate EHS/sustainability reporting practices, 33
issues that defy resolutions, 67
lack of corporate vision, strategy, commitment, resources, and follow-through, 31
passive approach to interpreting and enforcing SEC disclosure requirements, 33
performance levels, 12
principal-agent problem, 35
situational, bottom-up management, 30
tactical approaches driven by crisis, isolated events, loud or persistent outside voices, 31
EHS footprint, 312
EHS management, 11
EHS/sustainability and financial communities, 3
EHS/sustainability management practices, ES&G information, 317
Employee Retirement Income Security Act (ERISA), 212
employees, stakeholders, 115-116
influence on corporate behavior, 129-132
EMSs (environmental management systems), 167
endpoints, ES&G information, 318-319
energy efficiency, 151
environment versus economy, 125-127
environmental ignorance, 38
environmental issues, dialog concerning, 243-244
environmental justice, 110
environmentally sensitive industries, 275
environmental management systems (EMSs), 167
environmental movement, history of, 63-75
Environmental Protection Agency (EPA), 36-37, 70
environmental regulations
environmental, social, and governance. See ES&G
environment and finance
accounting perspective, 270-271
ES&G impacts on cost of capital, 274-279
intangible asset value, 270-271
performance of tailored investment portfolios, 284-289
stock price impacts of environmental and ES&G events, 280-284
environment, health, and safety. See EHS
EPA (Environmental Protection Agency), 36-37, 70
equity investors, 193
ERISA (Employee Retirement Income Security Act), 212
ES&G (environmental, social, and governance), 1, 22, 47
evaluation and investing methods, 232-239
fair and ethical treament of stakeholders, 50
KPIs
applying life-cycle approaches and perspectives, 353-354
consolidating and improving metrics, 352
establishing relevance of ES&G activities to business and financial endpoints, 355
expanding the paradigm, 350-351
generating fewer ancedotes and more hard data, 354
promoting real ES&G financial reporting integration, 355
reporting at corporate level, 353
stimulating and maintaining dialogue, 351-352
perceived influence on asset performance, 292
research and analysis firms, 339-349
resource efficiency, 47
risk management, 48
senior management control and awareness, 51-52
transparency, 51
ES&G data, 309
commitments, 311
goals, 311
policies, 311
ES&G evaluation principles
eco-efficiency, 235
life-cycle analysis, 235
long-term perspectives, 234
risks to intangible assets, 235
ES&G impacts on cost of capital
environment and finance, 274-279
ES&G incorporation, 232
content/subject matter, compliance, 317
emissions and waste management, 316
resource consumption, conservation, and recovery, 316
safety, 316
EHS/sustainability management practices, 317
external perspectives and expectations, 319
internal perspective, 314
investors and analysts, 320-321
level of reporting, 318
public, 320
public reporting, 318
regulators, 319
ES&G investing
international situation and trends, 247-250
ES&G investors
“best of the rest,” 235
indexing, 236
thematic investing, 235
ES&G ratings, 348
ES&G reporting, 330
ES&G significance, 240
ES&G/sustainabililty objectives, formulating, 364-365
establishing relevance of ES&G activities to business and financial endpoints
KPIs, ES&G, 355
Europe, ES&G investing, 248-249
European pension funds, 248
European Union (EU), Restriction of Hazardous Substances (RoHS), 85
EVA (Economic Value Added), 225
evaluation and investing methods
evolution of SRI/ES&G research community, 349-350
exclusionary screening, 22
executive orders (EOs), 45
expanding the paradigm, KPIs (ES&G), 350-351
expectations and nonlegal requirements, stakeholders, 82
industry codes of conduct, 82-83
supply chain obligations, 84-86
extent of use, sustainability reporting, 323-327
external perspectives and expectations, ES&G information, 319
F
fair and ethical treament of stakeholders, ES&G, 50
FAS-143/FIN 47, 205
FASB (Financial Accounting Standards Board), 205
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 60
feedback, seeking, obtaining, evaluating, 367-368
FIFRA (Federal Insecticide, Fungicide, and Rodenticide Act), 60
Financial Accounting Standards Board (FASB), 205
financial liability, 81
financial scandals, 204
financial securities, 193
financial value orientation, 360-363
Fitch, 252
fixed asset impairment, 104-105
flexibility
staff, 98
sustainability, integrating into corporate DNA, 182
focus, management systems, 168-169
food prices, 104
Forest Stewardship Council-US, 207
Freshfields Report, 212
FTC (Federal Trade Commission), 12
FTSE, 347
fundamental security analysis, 218
G
G3, 333
game-changers, 255
HNWIs (high net worth individuals), 257-258
investment consultants, 259-260
PRI (Principles for Responsible Investment), 256-257
GEMS (Governance and Environmental Management Strength) rating, 325
generating fewer ancedotes and more hard data, KPIs (ES&G), 354
GHG (greenhouse gas), 67
global climate change, 126-127
Global Reporting Initiative, 33-34, 207
goals
ES&G data, 311
stretch goals, 167
Goldman Sachs, 236
GS Sustain, 342
governance, 151
Governance and Environmental Management Strength (GEMS) rating, 325
government, 45
green, skepticism of, 10
greenhouse gas (GHG) emissions, 282-283
greenhouse gas (GHG), 67
greenwashing, 24
GRI (Global Reporting Initiative), 33-34, 207
growth, 223
international expansion, 25
H
health and safety (H&S), 151
high net worth individuals (HNWIs), 257-258
history
of environmental movement, 63-75
of SRI (socially responsible investing), 227-231
HNWIs (high net worth individuals), 257-258
honesty, corporate DNA (integrating sustainability), 182
H&S (health and safety), 151
I-J
IIRC (International Integrated Reporting Committee), 335
image and relationship costs, 93
improving continually, creating sustainable value, 368
inadequacy of corporate EHS/sustainability reporting practices, EHS, 33
inadequate knowledge in science, EGS, 38
incentives
barriers to ES&G investing, 241
personal incentives, 35
inclusiveness, corporate DNA (integrating sustainability), 182-183
income statements, 203
indexing, ES&G investors, 236
industries, environmentally sensitive industries, 275
industry codes of conduct, stakeholders (expectations and nonlegal requirements), 82-83
institutional investors, 209-213
intangible asset value, environment and finance, 270-271
intangibles, 226
integrating sustainability into corporate DNA, 178-180
business value orientation, 181
honesty, 182
openness and flexibility, 182
optimism, 184
transparency, 183
interdisciplinary knowledge, 53
internal perspective, ES&G information, 314
international expansion, 25
international situation, ES&G investing, 247
interrelationships, 53
investing, 195
investment consultants, 259-260
investment risk, 215
investors
attitudes and beliefs, 290-294
ES&G reporting, 330
institutional investors, 209-213
influence on corporate behavior, 143-144
who they are and what they care about, 194-197
K
KLD Research & Analytics, 238
KLD scores, 286
Knight, Alan, 336
knowledge, 309
interdisciplinary knowledge, 53
KPIs (key performance indicators), ES&G, 350
applying life-cycle approaches and perspectives, 353-354
consolidating and improving metrics, 352
establishing relevance of ES&G activities to business and financial endpoints, 355
expanding the paradigm, 350-351
generating fewer ancedotes and more hard data, 354
promoting real ES&G financial reporting integration, 355
reporting at corporate level, 353
stimulating and maintaining dialogue, 351-352
Kyoto protocol, 69
L
lack of corporate vision, strategy, commitment, resources, and follow-through (EHS), 31
level of reporting, ES&G information, 318
leveraging capability through cross-functional teams, 366
life-cycle analysis, ES&G evaluation principles, 235
liquidity, ratios, 224
long-term perspectives, ES&G evaluation principles, 234
M
management structure
objectives and targets, 170
measuring and reporting results, 176-177
performance improvement programs, 174-176
structures, roles, and responsibilities, 171-173
objectives and targets, 170
Maplecroft, 343
market/customer access, revenue, 94
markets
size and composition of, 197-201
disclosure, 201
payment, 191
theories and assumptions, 188-191
material price shocks, 102-103
MD&A (management discussion and analysis), 203
measuring performance, creating sustainable value, 367
measuring and reporting results, management structures, 176-177
influence on corporate behavior, 139-141
Mercer Investment Consulting, 291
Modern Portfolio Theory, 217
Modern Prudent Investor Rule, 210
monopolies, 189
Montreal Protocol process, 68
Moody’s, 252
morale, 96
mutual fund proxy guidelines for 2010, 246
N
NAEM (National Association for EHS Management), 315
NASDAQ OMX, 347
National Association for EHS Management (NAEM), 315
National Environmental Policy Act (NEPA), 58
needs
appropriate management approaches, 322
assurance of compliant behavior, 321
value creation orientation, 322
NEPA (National Environmental Policy Act), 58
Nessing, Sandy, 86, 179, 337-338, 377-379
Newmont Mining Company, 113
Newsweek, 347
NGOs (non-governmental agencies), 17-18
influence on corporate behavior, 141-143
O
objectives and targets, management systems, 170
Occupational Safety and Health Act (OSHA), 60, 70
openness, sustainability (integrating into corporate DNA), 182
operating costs, cost of complying with EHS, 91
optimism, corporate DNA (integrating sustainability), 184
organizational change, propagating, 173
organizational identity, 26
organizational resilience, 99
organizational strength and capability, 96
customer and supplier relationships, 100
organizational resilience, 99
recruitment and retention, 97-98
staff capability, flexibility, and resourcefulness, 98
staff morale, enthusiasm and creativity, 96
organizations, sustainability, 18
OSHA (Occupational Safety and Health Act), 60, 70
Our Common Future, 16
P
passive approach to interpreting and enforcing SEC disclosure requirements, EHS, 33
payment, 191
pension funds, European pension funds, 248
performance
measuring, creating sustainable value, 367
reporting, creating sustainable value, 367
performance improvement programs, management structures, 174-176
performance levels, EHS, 12
performance measurement, importance of, 308
performance of tailored investment portfolios, environment and finance, 284-289
permitting compliance obligations, corporations, 74-75
personal empowerment, EHS, 39-41
personal incentives, 35
Pisarcik, Mike, 48, 244, 329, 373
policies
ES&G data, 311
guidelines for creating, 160
policy commitments, 163
policy requirements, 161
political instability, 103-104
pollution, 47
energy efficiency, 151
regulations, 152
pollution control engineering and processes, compliance obligations (corporations), 74-75
pollution prevention, 63
portfolios, performance of tailored investment portfolios (environment and finance), 284-289
positive screening, 233
potentially hidden costs, 92
price/earnings ratio, 224
pricing power, revenue, 95
pride, 97
principal-agent problem, EHS, 35
Principles for Responsible Investment (PRI), 256
PRI (Principles for Responsible Investment), 256
professionals
sustainability professionals, 369-371
profitability ratios, 223
promoting real ES&G financial reporting integration, KPIs, 355
propagating organizational change, 173
public
ES&G information, 320
influence on corporate behavior, 144-146
public reporting, ES&G information, 318
R
ratios, 222
debt/equity ratio, 224
efficiency ratios, 223
growth, 223
liquidity, 224
price/earnings ratio, 224
profitability ratios, 223
RCRA (Resource Conservation and Recovery Act), 60
REACH (Registration, Evaluation, and Authorization of Chemicals), 85
record-keeping, compliance obligations (corporations), 78
recycling, 35
Registration, Evaluation, and Authorization of Chemicals (REACH), 85
pollution, 152
regulators
ES&G information, 319
influence on corporate behavior, 133-134
regulatory and voluntary program costs, cost of complying with EHS, 92
relationships
between EHS, social, and governance issues, 150-154
forging constructive relationships with important external stakeholders, 363-364
managing with stakeholders, 143
remediation, compliance obligations (corporations), 76-77
reporting
compliance obligations, corporations, 78-80
at corporate levels, KPIs, 353
importance of, 308
level of reporting, ES&G information, 318
performance, creating sustainable value, 367
public reporting, ES&G information, 318
reporting guidelines, GRI, 333-334
reporting practices, ES&G, 327-338
research and analysis firms, ES&G, 339-349
Resource Conservation and Recovery Act (RCRA), 60
resource efficiency, ES&G, 47
resourcefulness, 98
respect, corporate DNA (integrating sustainability), 181-182
responsibilities, management structures, 171-173
Restriction of Hazardous Substances (RoHS), European Union (EU), 85
results
corporate/financial, 313
measuring and reporting, 176-177
revenue
impact of complying with EHS, 93
impact on market/customer access, 94
rewards, security evaluation methods, 217-226
risk, 101
material price shocks, 102-103
political instability, 103-104
security evaluation methods, 215-217
supply interruptions, 102
risk management, ES&G, 48
risks, fixed asset impairment, 104-105
RoHS (Restriction of Hazardous Substances), European Union (EU), 85
roles, management structures, 171-173
S
Safe Drinking Water Act (SDWA), 60
safety, ES&G information, 316
SAM Group, 347
Sara Lee, 48
Sarbanes-Oxley, 204
scandals, financial scandals, 204
screens, SRI investors, 233
SDWA (Safe Drinking Water Act), 60
SEC (Securities and Exchange Commission) disclosure requirements, 33
ESG investing, 43
securities
financial securities, 193
U.S. equity securities, 200
security, true value, 221
security evaluation methods, 214
sell-side analysts, 252
senior management
integrating sustainability into corporate DNA, 179
securing and maintaining commitment and ongoing involvement, 363
senior management control and awareness, ES&G, 51-52
SEPs (supplemental environmental projects), 81
SFI (Sustainable Forest Initiative), 207
short-term perspective, barriers to ES&G investing, 240
SIF (Social Investment Forum), 206, 231
situational, bottom-up management
EHS, 30
size and composition of capital markets (U.S.), 197-201
skepticism of green, 10
skills, 53
Smith, Joe, 130
Social Investment Forum (SIF), 206, 231
social legitimacy, 114
social license to operate, 111-115
socially responsible investing, 1, 211, 227-231
social responsibility, 20
SRI/ES&G research community, evolution of, 349-350
SRI (socially responsible investing), 1, 211
staff capability, 98
staff morale, 96
stakeholder relationships, 364
stakeholders, 115
communities, 117
influence on corporate behavior, 133-136
customers, 116
influence on corporate behavior, 132
influence on corporate behavior, 129-132
expectations and nonlegal requirements, 82
supply chain obligations, 84-86
fair and ethical treament of, 50
investors and analysts, 124-125
influence on corporate behavior, 143-144
managing relationships, 143
influence on corporate behavior, 139-141
influence on corporate behavior, 141-143
influence on corporate behavior, 144-146
influence on corporate behavior, 133-134
influence on corporate behavior, 132-133
Standard and Poor’s, 252
statements of responsibility, 204
Stern Stewart, 225
stimulating and maintaining dialogue, KPIs (ES&G), 351-352
stock beta, 224
stock exchange listing rules and reporting requirements, 260-261
stock price impacts of environmental and ES&G events, environment and finance, 280-284
strength indicators, 277
stretch goals, 167
structures, management structures, 171-173
Superfund liabilities, 274
supplemental environmental projects (SEPs), 81
suppliers, stakeholders, 116-117
influence on corporate behavior, 132-133
supply chain obligations, stakeholders (expectations and nonlegal requirements), 84-86
supply interruptions, 102
corporate executive attitudes and beliefs, 294-298
investor attitudes and beliefs, 290-294
corporate governance, 26
clarity to complex issues, 27
value creation orientation, 27-28
versus greening, 21
integrating into corporate DNA, 178-180
business value orientation, 181
honesty, 182
openness and flexibility, 182
optimism, 184
transparency, 183
organizations, 18
sustainability professionals
core requirements, 371
sustainability reporting
benefits of, 329
sustainable development, 16-17
Sustainable Forestry Initiative (SFI), 207
Sustainable Sourcing project, Walmart, 85-86
sustainable value, 360
continually improving, 368
defining an ES&G mission, vision, and explicit linkages, 364
deploying necessary infrastructure, 365
financial value orientation, 360-363
forging constructive relationships with important external stakeholders, 363-364
formulating ES&G/sustainability objectives, 364-365
leveraging capability through cross-functional teams, 366
measuring and reporting performance, 367
securing and maintaining senior management commitment and ongoing involvement, 363
strengthening organization-wide policies, goals, and performance metrics, 365
T
tactical approaches driven by crisis, isolated events, loud or persistent outside voices, EHS, 31
teams, cross-functional teams (leveraging capability), 366
technical analysis, security evaluation methods, 217
testing/evaluation, compliance obligations (corporations), 76
thematic investing, ES&G investors, 235
Thompson, Marcella, 143, 173, 377
time to market/flexibility, revenue, 94
Toxics Release Inventory (TRI), 313
Toxic Substances Control Act (TSCA), 60
training, compliance obligations, 77
transboundary, 68
corporate DNA, integrating sustainability, 183
ES&G, 51
trends, 255
HNWIs (high net worth individuals), 257-258
investment consultants, 259-260
PRI (Principles for Responsible Investment), 256-257
TRI (Toxics Release Inventory), 313
Trucost methodology, 342
true value, security, 221
corporate DNA, integrating sustainability, 181-182
TSCA (Toxic Substances Control Act), 60
U
UNEP-FI (United Nations Environment Programme-Finance Initiative), 212
UNGC (United Nations Global Compact), 207-209, 323
United Nations Environment Programme-Finace Initiative (UNEP-FI), 212
upfront costs, costs of complying with EHS, 92
U.S., SRI/ES&G research community (evolution of), 349-350
U.S. equity securities, 200
V
value, 194
sustainable value, 360
continually improving, 368
defining an ES&G mission, vision, and explicit linkages, 364
deploying necessary infrastructure, 365
financial value orientation, 360-363
forging constructive relationships with important external stakeholders, 363-364
formulating ES&G/sustainability objectives, 364-365
leveraging capability through cross-functional teams, 366
measuring and reporting performance, 367
securing and maintaining senior management commitment and ongoing involvement, 363
strengthening organization-wide policies, goals, and performance metrics, 365
value-creation orientation, 360-363
needs, 322
vision and strategy, management structures, 155-157
voluntary, beyond-compliance programs, 46
voluntary standards, stakeholders (expectations and nonlegal requirements), 83-84
W-X
Walmart, 153
Sustainable Sourcing project, 85-86
Waste Electrical and Electronic Equipment (WEEE), 85
WEEE (Waste Electrical and Electronic Equipment), 85
Y-Z
yield, 224