Business

Boston nonprofit Ceres stresses green effort

Its philosophy: Good environmental policy is good for business

Mindy Lubber is chief executive of Ceres, which is celebrating its 25th anniversary this year.
Erik Jacobs for The Boston Globe
Mindy Lubber is chief executive of Ceres, which is celebrating its 25th anniversary this year.

In 2007, the technology giant EMC Corp. turned to a Boston nonprofit to help it become more environmentally sensitive — but worried that relations could become tense.

The nonprofit, Ceres, insisted that the Hopkinton company open its boardroom to financial, environmental, and social issue specialists, including critics ready to tell executives things they might not want to hear. But the relationship proved productive, and EMC, by one measure, reduced greenhouse gas emissions by 40 percent from 2005 and energy consumption per employee by more than 35 percent.

“The intent is not to get yelled at,” said Kathrin R. Winkler, EMC chief sustainability officer. “The intent is to collaborate to find ways to move the needle.”

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Ceres, celebrating its 25th anniversary, has become one of the world’s most influential environmental advocates by harnessing capitalism to convince companies that sustainability is central to their competitiveness and bottom lines. Ceres pushes its way into corporate boardrooms by enlisting a network of some of the nation’s biggest institutional investors — including the $300 billion California Public Employees Retirement System — and once there demonstrates how combating climate change, cutting energy use, and preventing damage to the environment is in firms’ economic interests.

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Ceres has spurred multinational corporations such as PepsiCo Inc., Nike Inc., and Ford Motor Co. to change the way they act on climate change, including Ford’s support of higher fuel-efficiency standards. In addition, the nonprofit has persuaded more than 1,000 companies, including General Motors and Apple, to sign the nonprofit’s “Climate Declaration” urging Congress to adopt new laws to combat global warming.

“What will change the debate on climate in the US Congress,” Ceres chief executive Mindy S. Lubber said, “will be when leaders of the largest economic firms and financial firms go up and say, ‘We need to act because this is hurting us financially.’ ”

From its offices on Chauncey Street, Ceres also has become a significant player in the international climate debate, demonstrating that producing less waste and using renewables helps a company’s bottom line. Lubber has spoken at the United Nations, last year addressing 500 global financial players at the Investor Summit on Climate Risk, and the World Economic Forum, a gathering of policymakers, intellectuals, political leaders, and corporate executives, in Davos, Switzerland.

Ceres was founded in 1989, just months after the Exxon Valdez oil spill that dumped more than 250,000 barrels along a pristine section of Alaska’s coastline and ultimately cost Exxon, now ExxonMobil, more than $4.3 billion in penalties, lawsuits, and cleanup costs. The disaster inspired the idea that still drives Ceres: Corporations are harmed financially when they don’t pay attention to the environment — and that matters to investors.

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Ceres today works closely with 65 companies, stressing that if businesses manage their waste, energy, and supply chain well, it shows they can manage the entire enterprise, attracting investors, customers, and employees.

“They were one of the first to articulate the economic as opposed to the ethical argument in terms of investing,” said Geoffrey M. Heal, a professor at Columbia Business School who teaches the business of sustainability. Heal called Ceres a “forceful player” and said, “They’ve set out the arguments clearly.”

Ceres’s clout with corporations comes from its network of 110 institutional investors, which see the connection between sustainability and profitability, including public pension funds in New York and California. All told, these investors control $13 trillion.

“We’re thinking decades, generations out,” said Anne Stausboll, chief executive of the California Public Employees Retirement System and cochair of the Ceres board. “We have a lot of focus on long-term sustainability.”

This support makes it much easier for Ceres to open the doors to corporations, where the nonprofit aims to make decision-makers aware of their companies’ environmental and social effects. The backing gives Ceres the clout to insist on buy-in at the chief executive level, access to company data, and rigorous examination of operations by investors, environmental specialists, and social activists chosen by the nonprofit.

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The companies then pay Ceres for this work.

Bloomberg L.P., the financial data and news organization, enlisted Ceres in 2008. Ceres has helped Bloomberg determine how to reduce its carbon emissions by 20 percent by 2020 from what it was in 2007, a period during which the company will double in size. Among the steps: using energy-efficient LED lighting and encouraging recycling and composting at its facilities.

Curtis Ravenel, global head of sustainability at Bloomberg, said Ceres was able to challenge the company’s practices and drive change, without being adversarial.

“What I like about Ceres is that they are aggressive, but not too aggressive,” Ravenel said. “You want them to be pushing you. That’s why I hired them, to keep us honest.”

Heal, the Columbia professor, said it’s difficult to measure the effect that Ceres has had. Investors and companies are much more aware of climate change, partly because of the media attention, partly because of Ceres, and partly because of other players, he said. “They’re pushing on a door that’s slowly opening anyway,” he said.

Lubber, however, maintains that Ceres is responsible for significant changes in attitudes about climate change in capital markets. The organization, for example, was a partner in a 2011 Citigroup report that made an economic case for increasing fuel efficiency standards in the auto industry.

Following the report, the average fuel economy standard was raised to 54.5 miles per gallon by 2025, with the support of GM and Ford, both of which work with Ceres.

Ceres officials also want corporations to include environmental data, such as greenhouse gas emissions and reductions in toxic materials into regular earnings reports so investors can weigh their progress on these issues.

Already, some 6,000 companies voluntarily disclose greenhouse gas and energy efficiency data through a program created by Ceres and later spun off as an independent organization known as the Global Reporting Initiative.

As companies and investors learn the economic benefits of sustainable practices, Ceres hopes that they’ll work to convince lawmakers that acting on climate change is not only good policy, but also good for their businesses. After all, Lubber said, money talks.

“That’s part of our theory of change,” she said, “that investors care about these issues and care mightily.”

About Ceres

Budget (FY 2015): $10.7 million

Employees: 70

Major initiatives:

Investor Network on Climate Risk includes 110 institutional investors with combined assets of $13 trillion. The investors press businesses and policy makers to act on climate change.

Business for Innovative Climate and Energy Policy, or BICEP, includes more than 30 consumer companies that advocate for energy and climate legislation.

Clean Trillion Ceres has a goal of seeing annual global investments in clean energy increase from $281 billion in 2012 to $500 billion in 2020 and $1 trillion by 2030.

Source: Ceres

Jill Terreri Ramos can be reached at jillterreri@gmail.com. Follow her on Twitter @jillterreri.