Impact Blog
On Earth Day: Tools for positive change

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By Stuart DalheimShareholder Engagement Manager, Calvert Research and Management

      Washington - On Earth Day, the annual global event that propels environmental issues onto the world stage, we are reminded that we all have a responsibility to protect the planet for today and for future generations. Examining corporate environmental risks and opportunities is a year-round focus for Calvert. We believe that by encouraging businesses to address financially material environmental issues, we can have a positive long-term effect on their bottom lines and improve our position as a shareholder.

      At Calvert, our engagement program over the past year continued our decades-long history of working with companies to address critical environmental issues. By engaging with corporations, which have great financial power relative to other stakeholders, Calvert can help address key sustainability issues that matter to business, our shareholders and society as a whole - all aligned with the goals of Earth Day.

      A notable change since the first Earth Day in April 1970 is that the broader market now recognizes that environmental issues are fundamental to a company's ability to thrive as a business. Engagement can help companies make positive changes to their corporate environmental, social and governance (ESG) performance in material areas by examining factors like how a manufacturing company manages risks related to the transition to a low-carbon economy or whether a food products company is managing water scarcity in its supply chain. We've detailed these actions in our annual report on engagement, Tools of Change.

      Environmental issues are one of the pillars of ESG, and Calvert includes dialogue with select companies on environmental issues as part of our structured engagement strategy. In 2017-2018 these included dialogues on setting greenhouse gas emissions targets and adopting water stewardship policies, among many other important issues.

      Shareholder resolutions

      Calvert filed shareholder resolutions regarding clean water and clean energy last year in an attempt to encourage progress.

      One of these was filed on a company in the steel industry regarding environmental issues including greenhouse gas (GHG) emissions, energy, water and waste management efforts. We successfully withdrew the resolution after the company agreed to issue its first sustainability report, disclosing among other things its baseline GHG emissions intensity, which then becomes the basis to call for further progress.

      Calvert also filed resolutions with two companies in the packaged foods and meats subindustry to urge them to adopt a water stewardship policy designed to reduce risks related to water availability and water pollution. Both resolutions were ultimately withdrawn. One company developed and published a water stewardship policy that applies to the firm's operations and agricultural and manufacturing suppliers. We withdrew our resolution at the other company because it subsequently announced that it was being acquired.

      Direct dialogue

      Calvert continued its dialogue with a large steel and steel products company addressing the company's work on energy management and performance on GHG emissions. Two members of our team visited a steel mill to meet with plant management and staff, and were joined by environmental and investor relations representatives from corporate headquarters. The meeting allowed us to see the day-to-day operations, deepen our understanding of the company, and continue our discussions about energy management, reporting and goal-setting.

      Calvert works with Ceres, a sustainability nonprofit organization that facilitates investor and corporate leadership, to tackle challenges like climate change, water scarcity, pollution and human rights abuses. We helped convene a meeting with four large steel manufacturers to discuss the feasibility of setting science-based GHG emissions reduction targets, with expert input from the Science Based Targets initiative and emphasizing opportunities in energy efficiency and renewable energy.

      Calvert also initiated climate-related engagement with two electric utilities and a major transportation company, and played a leading role in the dialogues with three other companies. The engagement is part of Climate Action 100+, a new five-year, investor-led initiative to engage with the world's largest corporate GHG emitters to curb emissions across the value chain, strengthen climate-related financial disclosures and improve governance of climate-related risks that may affect companies. As of December 2018, 310 investors with more than $32 trillion in assets under management have signed on to the initiative.

      Calvert continued its dialogue with a large meat production and distribution company on water risks and impacts in its own operations and supply chain, with particular focus on standards for the farmers that it subcontracts with to rear the company's animals.

      In addition, Calvert participated in a Principles for Responsible Investment (PRI) initiative to engage food and agriculture companies on water risk in company supply chains, leading the engagement with one of the companies. Calvert also took part in a collaborative effort coordinated by CDP (formerly the Carbon Disclosure Project), taking the lead in reaching out to a dozen companies from sectors for which water is a material issue, but which did not respond to CDP's 2017 water questionnaire.

      Bottom line: Calvert continues to use its program of structured engagement to work for positive environmental change year-round.