POST #3: “CERES, For A Living Planet”

We were sailing along the coast of Marblehead, Massachusetts, our annual CERES Board retreat outing.  It had been several long days, with yet another to come. The ocean was blue to black, unfathomably environmental, resting our fervent struggles for the fate of the planet in its embrace.  But tonight was for socializing.

Denis Hayes, President of the Bullitt Foundation, and Woody Tasch, Treasurer of the Noyes Foundation, were topside when I came up from the cabin, beer and veggie sandwich in hand. There was a break in the conversation, so I threw in my latest speculation.

“I’ve been thinking about the corporate irresponsibility we deal with in CERES. That a lot of our problems stem from a popular assumption that justice and democracy are natural to a capitalist system.”

I leave them to digest that mouthful while I take a bite of my sandwich. Since they haven’t immediately leapt overboard, I continue. “The United States, where that conception has flourished, began as a frontier society. The British Empire had its colonies that provided a frontier. With an expanding frontier, whether of trade or land, it seemed the meanest peasant could escape a feudal past and find an economically potent future. In that situation, a market economy and economic justice were not inherently at odds.”

“Well…” says Denis, “the inequities were terrible.”

“I don’t mean to minimize them,” I reply. “I’m just saying that conceptually, it was possible to believe that everybody could get theirs within the system.”

“Excepting women, slaves and the native populations.”

“Of course.”

Denis looks out over the water, looks back at me, deciding at least for a moment to engage. “It’s a little more complicated than that,” he says. “There was the transition from an agrarian to an industrial society. There was an intellectual ferment led by the writing of Malthus, Adam Smith and others arguing for a free marketplace. But okay, it makes some sense,” continues Denis. “Where are you going with this?”

“Just that the environment is another frontier. The exploitation of natural resources fit right into the paradigm of an expanding market economy. Conversely, the closing of the environmental frontier follows the closing of the land frontier. That leaves western society with a set of institutions whose justification is somewhere in the past, groping for a rational.

“Maybe there’s a sequence,” I suggest. “First political justice (dealing with the right to life and liberty) then social justice (the quality of life) economic justice (opportunity to better oneself) environmental justice (insuring there’s a future to live in). If we could figure out where we are in time, it might help the choices we make in CERES.”

Denis looks at me skeptically. It’s been a long day. The sea is rushing past, or are we rushing through it, driven by the spread sail. If the wind fails, we can count on the internal combustion engine to help us wend our way home. More likely that’s where we are in time.

Woody notes a house on Marblehead Neck that we are passing. “My wife and I looked at it last year. It was a nice piece of real estate.”

Perhaps it was appropriate that we moved to real estate: “Real estate” is what folks take to calling land, after the houses are built and the frontier is over. At the beginning of North America’s recorded history, Native Americans had the curious notion that no one owns the land. Now it seems that with global warming, most of our valuable shoreline may wind up underwater, in which case ownership again becomes moot.

And justice, economic, political, social, environmental or otherwise? When people operate from outmoded paradigms, justice tends to get lost in the transition. America has been losing its second frontier of unlimited natural resources, the basis of the paradigm has shifted, and we hardly noticed. When that happens to society or its leaders, all of us are in trouble. 

RULES OF THE GAME

In the second half of the 20th century, the environmental movement and corporate America were locked in an adversarial relationship. Despite mounting evidence and public pressure, manufacturers practiced denial and disinformation in defense of what they maintained was efficiency and shareholder value.

In 1989, as Executive Director of Co-op America and President of the Social Investment Forum, I helped my good friend, Joan Bavaria, found the CERES Coalition, then served on its Board for the next two decades. Denis, Ken Sylvester from the NYC Comptroller’s office, Mike McCloskey, Chair of the Sierra Clubs, Joe Uhline from AFL-CIO, Ariane Van Buren from the Interfaith Center for Corporate Responsibility – they and many more became colleagues we could count on to work our priorities into our busy agendas.

Our initial goal was developing and securing commitment to a set of Principles. As a totality, they offered a preferable relationship between the engines of productivity and the health of the planet. Individually, each Principle required a host of specific interventions that had different implications for each company, industry and the global economy.

From our first Press Conference on Wall Street in the fall of ‘89, we proclaimed that without measurable accountability to the values represented by the CERES Principles, investors had no basis for assessing the inherent risks embedded in their portfolios. If there was a bill to come due, as happened to share value with disasters like Bhopal and the Exxon Valdez, investors had a right to understand and assess policies.

The CERES Principles

Far from wanting to destroy their companies, we were acting for our investment in their long-term, financial success. Once an understanding about common commitment was reached, differences about priorities could be explored and trust developed, though not with every company, nor always smoothly.

A usual pattern developed of bringing companies to the table by presenting shareholder resolutions to sign the Principles at corporate annual meetings. Soon, seventy-five companies a year were dealing with resolutions that regularly garnered 5-15% support, very high for non-management resolutions, and enough to get them on the ballot for the next year.

Along with other members of the Board, I took my turns at presenting resolutions and in the dialogs which often followed. Even as we gathered experience, we recognized we were in largely uncharted waters. The dialog process with companies required people on both sides who could listen, as well as put forth a position. Compromise was better than confrontation, but far preferable were the moments of mutual insight where we discovered solutions to challenging problems, leaving all parties satisfied and business running more efficiently.

TIME TABLE

Joan Bavaria and I are driving through times zones as if we were warping through a Star Trek episode. On the interstate between Ohio and Central Indiana, it’s possible to go through Eastern to Central time zones so frequently that we’ve lost track of whether we’re going to be early or late for our meeting.

Arrived at the vast factory, we get a dramatic example of the problems companies face. As one of the senior managers guiding us explains, “We know how to make relatively clean diesel engines – and that’s exactly what we’re selling in the USA. What’s killing us is that overseas, in Africa, Asia and Latin America, the competition is forcing us to the lowest common denominator. Our premiere, clean engine is priced right out of the market.” He looks at me hesitantly. “You do understand we’d rather sell those engines.”

I shake my head sympathetically. “The point isn’t to put you out of business for making high quality, environmentally sound products. But if you joined with CERES, I could see asking your company to lead an industry initiative to raise the standards. If all companies participated, then nobody gets hurt.”

The manager nods enthusiastically, but maybe I’ve been through too many time zones. I’ve missed that consumers in Third World countries may not be able to afford the clean engines.

HERE COMES THE SUN

The initial endorsing companies like Ben & Jerry’s, Stonyfield Yogurt, Smith & Hawken were small, with a pre-existing commitment to environmental values. The breakthrough to the Fortune 500 came with the Sun Oil Company, operating under the logo of Sunoco, which had been the target of several resolutions.

In 1993, with a troubled financial picture, a new CEO, Robert Campbell, was brought in to turn the company around. Bob took a look at every aspect of the company. When he came to the discussions with CERES, the Principles made sense, and the usual adversarial stance didn’t. Campbell wanted to know how to make an endorsement work, not all the reasons why it couldn’t or shouldn’t.

It was a courageous act, and a break with both the chemical and petroleum industries. The crunch point came early on. Sun might have a long-term intention of becoming an energy company less reliant on fossil fuels, but in the short to medium term, Sunoco pumps were delivering gasoline. Could CERES live with a petrochemical company, or were we asking Sun to go out of business? Might as well get that clear from the get-go or we’d be get-gone.

In our internal discussions and with Sun, we staked out a clear position: CERES’ bottom line was truthful reporting of present practice; continuous and significant improvement of their performance in every area that could affect the environment; and commitment to searching for the technical and scientific basis to redesign their business. We had no illusions that multi-billion dollar multi-national company involved in extraction and manufacturing could be perfect. Sincerity, accountability and collaboration were the best we could expect in the real world.

Those were the answers Bob Campbell was waiting for. In 1994, in a ceremony at the National Press Club, Sun Oil became the first Fortune 500 company to sign the CERES Principles.  As with the many companies which followed, the signing of an aspirational document was only the beginning.

Events tested the relationship when a Philadelphia refinery that Sun had recently bought sent a plume of yellow smoke over the city. The emission looked far worse than it was, but the headlines and newscasts would be trumpeting trouble in River City.

The next morning, before most of us had heard a thing, every Director of CERES received a packet of materials from Sun. There was no attempt to minimize or justify the event: It had happened. Sun accepted full responsibility (even though they could have blamed it on the previous owner) and here’s what they intended to do about it.

The cover letter indicated that Sun appreciated the difficult position in which CERES Directors might be placed, and intended only that we be fully apprised so that we could respond clearly to our constituencies. Sun then establish a process a format for meeting with more than seventy community groups, insuring they had both access to all information, as well as a voice in the remediation.

In a pressure-driven situation, that easily could have destroyed a young and fragile relationship, Sun and CERES had just turned a potential black eye into a positive experience, and trust was strengthened.  

YOU AUTO BUY NOW

When General Motors, then the largest corporation in the world, signed on, the scale of the issues only became greater.

In 2001, the incoming Vice President, Dick Cheney, told the automotive industry that Café standards were over, and it was open season on the environment. A week later, the entire CERES Board flew to Detroit and met with the CEO of GM in the morning and Bill Ford in the afternoon.

Our message was equally clear: Whatever the politics of the moment, the polls and demographics showed a majority of Americans supported environmental standards. The investors and consumers we represented weren’t going away. We expected companies which had endorsed the CERES Principles would maintain their reporting and their commitments – and they did.

A decade and a half later, when Donald Trump tried to roll back environmental protections, with few exceptions, corporate America had already made its choices.

After decades of corporate stonewalling, beginning in the decade of the ‘90s, corporate environmental reporting as a fiscal responsibility went from zero to ordinary business, and environmental impact would no longer be treated as an externality.

The working teams that began with confidential negotiations to sign the CERES Principles, leading to sophisticated environmental reports, often morphed into ongoing consultation. Companies found value in having an outside commentator in anticipation of policies which would have environmental consequences. Trust was a critical issue and it built over time.

At the annual CERES conference, hundreds of corporate representatives mingled with CERES Board, staff and organizational members to consider industry-wide issues and attend workshops. Leading thinkers and politicians arrived to speak and listen: Al Gore, Paul Hawken, Francis Moore Lappe, Bill McKibben.

As we gained resources, the burden of leadership and operations which had been in the hands of our Board shifted. Joan continued as President, but we brought on gifted staff, led by strong Executive Directors – first Bob Massie, then Mindy Lubber – that churned out incisive position papers. A senior staffer, Andrea Dworkin, was the leader in developing a practical and visionary “CERES Roadmap for the 21st Century” which laid out a visionary yet practical trajectory for business’ role in a survivable economy.

At the turn of the millennia, Ceres developed two more extraordinary initiatives:

  • We convened INCR, the Investor Network on Climate Risk, bringing to the table State Treasurers and eventually every major financial institution in the USA. Bi-annual meetings were held at the UN on the state of environmental impact. By 2008, INCR’s membership represented $22 trillion in managed assets.   
  • Recognizing the reach and involvement of CERES was increasingly with multi-national companies, Bob Massie and our top consultant, Allan White, crafted the Global Reporting Initiative. As issues of accountability and governance for the new standards became apparent, GRI was spun off to a home in Amsterdam, with its own international Board. Through GRI, the context broadened to include social indicators of sustainability. It rapidly became the gold standard for reporting, backed by the legitimacy of a Stakeholder Council composed of elected representatives of business, non-profits, labor and the financial sector. I served on the Council for its first decade, including three years as its Chair.

Joan Bavaria, CERES founding Chair, inspirational and strategic leader, passed in 2008. We come and we go, as do the institutions we create and nurture.

This early history of CERES I’ve sketched offers many lessons about the recognition of opportunity and the persistence of vision. Applying them to new situations is less formulaic and more like an artist’s pallet: a dab of this, a line here, the moment when an organizing theme and character emerges. Even then, whether the creation deserves to be framed and admired is problematical amid so many competing voices.

I count myself fortunate to have had the chance to engage and contribute. I’ll leave you with one more story:

POWER TO THE PEOPLE

After a year of indecisiveness, we seem to be on the verge of working through the endorsement of a large electric utility. They have several nuclear plants, but so long as they operate them responsibly and don’t build new ones, we accept that a well-managed, sincere company is capable of improved performance.

As head of the CERES team, I’d done my due diligence by talking to many regional environmental groups. Nobody was giving the company a clean bill of health, but it seems redeemable.

One morning, I get a call from our new Exec Director. “Did you see Time Magazine?”

“No. Why?”

“Because Northeast Utilities is on the cover.”

After reading the story, I feel angry and betrayed. The next day, I’m on the phone with my main contact at the utility. By then all the papers and TV are talking about whistle blowers ignored and harassed. There have clearly been major violations in the company’s nuclear facilities.

The temptation is to level the guy, but my intuitions are that he is caught in the middle. “I’d bet this isn’t a great day for you,” I begin.

We stumble through polite commiserations before I get down to business. “Let’s say we’re lucky that we hadn’t gone further in this process. Bad enough that we went through a year of dialog without any intimations that your company had major environmental problems; bad enough that your company did its best to silence internal criticism. As we’ve said throughout, these relationships depend on trust. For us to find out about this from the media is completely unacceptable. I wouldn’t preclude ever getting back into dialog, but it would minimally mean a complete change of senior management; acceptance of responsibility for past errors and making amends; and installing internal avenues that guarantee that criticism will be heard.”

Three years later, I stood on a podium at our annual conference, and welcomed Northeast Utilities as the newest endorser of the CERES Principles. They still weren’t perfect, but their CEO and chief Environmental Officer were gone, and every one of our concerns had been addressed.

Two months after they became an endorsing company, I spoke to two hundred of their safety engineers, with another 1000 on video feed. I told them the story of our first, aborted relationship, then another:

“Last week, I was presenting a resolution at the annual shareholders meeting of Aetna. My co-filer was a nun, representing her order’s investment. Before the meeting, we went over my remarks. In the conclusion to my presentation, I had planned to mention that the power to run the lights in the auditorium was provided by the newest endorser of the CERES Principles, Northeast Utilities.”

“Oh, no,” she says. “We won’t gain any votes that way. Too many people in this room are still angry at NU.”

I regard the audience seriously, then continue. “I know that most of you live in Connecticut or Massachusetts. I’m sure the past few years have been painful. The questions from your neighbors, criticism in the local paper and TV. I believe the new leadership of NU and the new protocols you’ve installed have the capacity to make this a safe company for our communities, otherwise I wouldn’t be standing here, representing CERES.

“But as with the nun in my story, trust lost is not soon regained. You are going to have to prove yourself again and again over these years. The reporting that will be part of your CERES responsibility, and the relationships that develop should provide benchmarks and access that help prevent a repetition of the debacle that almost ruined your company’s reputation. In the final analysis, the integrity of your operation rests on individual effort as well as corporate commitment. That comes down to choices all of you will face between expediency and thoroughness. Make the right choices. Don’t turn a blind eye to danger. Remember that it’s your company, your communities, your environment.”

[For those interested in delving deeper, here’s a link to a 15 minute version of my video, “CERES, For a Living Planet,” available on YouTube at

https://www.youtube.com/watch?v=ZcsKgYz2UbM. For those who want more recent accomplishments of CERES: www.ceres.org]

—————————————–

Preview of Notes In Passing, Blog #4: “Immortal Remains”

Years ago, our beloved, fiercely independent and wide-ranging family cat, Max, began dragging one rear leg and then it got worse. Our vet diagnosed hopeless. Max evidently reached the same conclusion and set out to use up his nine lives as expeditiously as possible.

He laid himself in front of a car parked in our driveway so that upon departure a tire would run him over.

Our house is on a steep hillside that runs down to a pond.  Max evidently dragged himself through the woods,, rolled down the hill, and wound up in the water, where I found him yowling, half-submerged and one bedraggled and pissed-off kitty.

On three occasions, Max negotiated his way through the slats on our deck and fell twenty feet.

Towards the end, he lost control of his bodily functions, suffering both pain and indignity. Finally, we bought a child’s playpen and kept it in the family room. He seemed to relax and accept.

The last weekend, he stopped eating and drinking. Saturday night, our son, Rob, and I curled up on couches, petting him, talking softly while he purred into a final sleep.

However conscious we are about our mortality, all sentient beings deal with it. In the movie, “Little Big Man,” the old Chief wraps himself in a blanket and lies down on the mountain, secure that it’s been a good life and a good day to die. As he waits for resolution, a drop of rain, then another disturbs his meditation. Finally, with the rain pouring down, he faces that maybe it’s not such a good day to die. He bundles up and trundles back to his tent, muttering, “Sometimes the magic works, and sometimes it doesn’t.”

One thought on “Paul Freundlich’s Blog: NOTES IN PASSING

  1. Thanks for this historical perspective through your personal lens, Paul.
    I’ve worked with Ceres a bunch over the past decade and more, and I have deep respect for the folks who work there. But I, along with many folks I know in the field, are concerned that Ceres’ institutionalization has led it become entrenched in incrementalism at a moment when more profound transformative change is needed.
    I’d love to hear your take on this.
    Peace,
    Bill

    Like

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