field
May 17, 2012 • By

Toward a more sustainable economy

The theme of the 2012 Ceres Conference that I attended recently in Boston was “Igniting Innovation, Scaling Sustainability.”

If you’re not aware of it, Ceres is a non profit organization whose mission is, “Mobilizing investor and business leadership to build a thriving, sustainable global economy for the well-being of people and the planet.” General Mills is a member of Ceres and was a supporting sponsor of the conference.

We covered a lot of ground in just a few days – so I thought I’d share some of the takeaways I found most interesting.

Water as defining environmental issue of 21st century

This discussion focused on water and the challenges we, as a planet, face as we look to the future. The panel, which included the author of “The Ripple Effect,” a University of California-Irvine professor, and an IBM leader, discussed water from the social, environmental and business perspectives.

Key observations included the impacts of changing weather patterns on water availability, population growth and the associated increased demand for clean water, as well as the role that pricing and regulation can play in increasing efficient water use.

We also previewed the newly released documentary, “Last Call at the Oasis,” which offers a perspective on this environmental resource issue.

The power of measurement

Increasingly, companies are being asked to measure and disclose their performance in the areas of Environment, Social and Governance (ESG). The future will only bring more standardization and increased expectations for disclosure.

This has significant implications for businesses in terms of what we measure, how we measure and what we report. The ultimate drive is toward integrated reporting – one report that covers financial and ESG performance (think Annual Report + Global Responsibility Report = Integrated Report).

It’s not just for tree huggers

I was struck by some big institutional investors’ interest in sustainability and responsible business practices. In particular, individuals from the Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA–CREF) and the California Public Employees’ Retirement System (CalPERS) talked about the need to measure investment risk across the board – human, financial and physical.

Ann Simpson of CalPERS acknowledged that not all investors are interested in understanding these risks – it is really the long-term owners who focus on this aspect of a business, versus the shorter-term interests of traders and “raiders.”

In the TIAA-CREF case, we heard about a new product they call Farmland – think Real Estate Investment Trusts (REITs) for farms. Assessing the viability of agricultural investments requires a hard look at the labor and environmental risks associated with specific products.

These factors have an enormous impact on value. This is of particular relevance to the food and beverage industry because of our deep agricultural roots.

Ceres road to 2020

Ceres unveiled its new report that charts the progress of 600 publicly traded companies and where they stand on sustainability issues in terms of governance, stakeholder engagement, disclosure and performance. General Mills was commended for our commitment to 100 percent certified sustainable palm oil over the next three years.

To see the report, visit the Ceres website.

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