“This is not driven by altruism.” -Paul Morris, Vice President of Sustainable Planning and Development, Cherokee

In a workshop at last week’s Ceres conference, Mr. Morris explained the benefits of Transit-Oriented Development (TOD). His private equity firm redevelops brownfields – dormant industrial properties usually marked by significant environmental damage – into new, mixed-use developments.

I was intrigued by the political and economic calculus behind such projects. Mr. Morris described how homebuyers, commercial tenants, and local governments are driving TOD growth – and not because of any sense of social mission. Buyers and renters want proximity to work and transit, and cities want the revenues from more intensive land use.

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National Advisors Trust Conference
Hilton Head, South Carolina
April 24, 2008

SRI’s Moment

I’ve been deeply involved with socially responsible investing – SRI – since 1983. Three times since then I’ve heard, “SRI’s time is here!”

I heard it first in the late 1980s, following the South Africa divestment legislation and the Exxon Valdez disaster. SRI grew, but not exuberantly.

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Last week, Greenleaf Publishing announced the publication of The Difference Makers, a history of the corporate responsibility movement through interviews by Boston College’s Sandra Waddock.

KLD co-founders Peter Kinder and Amy Domini, along with former Research Director Steven Lydenberg, were interviewed for the book.

As Prof. Waddock explains in her introduction, the 23 entrepreneurs she studies “represent a unique perspective on the developments that have taken place around corporate responsibility in the past 20-25 years.”

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Last week’s Ceres conference included a panel on water scarcity and risk. The term “peak water” was mentioned, framing water as a commodity facing a peak in availability (like oil) and a potentially tradable value, similar to carbon.

Panelists identified water scarcity as a human rights and community issue as much as an environmental issue. Chris Williams of the World Wildlife Fund reported that over 1 billion people globally have no access to safe drinking water.

Meanwhile, water demand and consumption has increased in the private sector for manufacturing, energy production, and agriculture. A significant amount of the water consumed is wasted through agricultural runoff, leaks, and weak or nonexistent conservation and efficiency programs.

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How much corporate social responsibility (CSR) is enough? How much CSR reporting is enough?

These questions start from a mistaken notion of what the responsibility of corporations is.

Former Shell director Sir Geoffrey Chandler once said of “corporate social responsibility”: “I know of no phrase which has done more damage to constructive thought or caused greater confusion. It has encouraged the belief that a company’s responsibility to society lies in voluntary philanthropic add-ons, rather than the application of principle to all its activities.” (1)

By Chandler’s light, “how much CSR” questions make no sense.

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Not long ago, I reread George Eliot’s Middlemarch.

I’ll have more to say about this unforgettable novel about social change in the countryside at one of the great inflection points in British history. But these two quotations, I thought, merited attention by themselves:

On one point he may fairly claim approval at this particular stage of his career; he did not mean to imitate those philanthropic models who make a profit out of poisonous pickles to support themselves while they are exposing adulteration, or hold shares in a gambling-hell that they may have leisure to represent the cause of public morality.

George Eliot, Middlemarch [1872] (New York: Bantam Classics, 1985), p. 133.

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During March 3-7, 2008, I had the opportunity to attend the 2008 Washington International Renewable Energy Conference (WIREC), touted to be the largest international conference on renewable energy in the world. WIREC was actually three events rolled into one—a ministerial conference for policy makers, a business conference, and a tradeshow. Most everyone involved in renewable energy was there.

From the size and the diversity of the corporate landscape represented at the panels and on the tradeshow floor, it was obvious that companies in every industry want to be considered committed players in the renewable energy space.

BP, among the largest oil companies in the world, paid $1 million to be the lead sponsor of this three-day event. Other non-traditional green companies, including oil major Chevron, waste-to-energy power company Covanta Energy, and auto maker GM, were also principal sponsors.

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Last month, Canada’s Ethical Funds published a brief called Winning the Social License to Operate.

The focus is on how companies can reduce the risk of local opposition to their extractives operations by making use of the “latest evolving standards” around what is called free, prior and informed consent (FPIC) of indigenous communities.

As the report points out, local opposition to resource extraction has been running high in many areas of the world. Canadian mining and energy companies in particular have run into recent controversies, including in Guatemala, India, and Canada itself.

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Co-Chair, Peter Kinder’s, Opening Remarks(1)
American Conference Institute
Warwick Hotel, New York City
February 27, 2008

What are the only three things you need to know about real estate? Location. Location. Location!

Well, there’s the conference….

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On February 27th, I had the opportunity to hear Leonard English, Investment Manager for the General Board of Pension and Health Benefits of the United Methodist Church, talk about the organization’s community investments through their Positive Social Purpose Investment Program (PSPI).

One point in particular jumped out at me, and that was a number: 6.5%.

The annualized performance of PSPI loans held in the organization’s Domestic Bond Fund (as of 12/31/2007) has been 6.5% since inception (07/31/1990). Which is an impressive number and in line with their benchmark performance, as well as competitive market rates of return.

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