November 2015 The Cornerstone Volume II Issue 10 Journal of Sustainable Finance and BankingSM
Global Market Strategy Regional and Sector Strategy: Monthly Update Michael Geraghty … p. 14 Corporate Governance Department of Labor: ESG Compatible with Fiduciary Duty John K.S. Wilson … p. 17 Accelerating Impact Conserving Ocean Capital for Perpetual Returns Brad Ack, World Wildlife Fund … p. 19 The Promise of Blue Finance Torsten Thiele, Global Ocean Trust … p. 21 Offset Your Life the Blue Way Mark Spalding, Ocean Foundation … p. 23 Enhanced Analytics Can Financial Innovation Make Oceans a Global Climate Solution? Maria Damanaki, The Nature Conservancy … p. 25 Giving with Your Heart and Your Head: Using Metrics in Philanthropy Mark Spalding, Ocean Foundation … p. 27 Open Source Excellence Old Man, Nutrition, and the Sea Linda Cornish, Seafood Nutrition Partnership… p. 30 Mega Yachts: Incubators and Economic Engines for Innovation Victoria Cerrone, JD, Ports of Cause … p. 32 Sustainable Editorial A Call to Responsibility: Salvage Our Most Valuable Natural Capital Asset “OCEANS AND SEAS” Karen Sack, Ocean Unite … p. 34 The Oceans and Us Kimberly Gladman, PhD, CFA, JUST Capital … p. 37 ©Jurgen Freund / iLCP CEO’s Letter on Sustainable Finance & Banking
This month in the Cornerstone Journal of Sustainable Finance & Banking (JSFB), as the world attends to the atrocious terror attacks in Paris and Beirut, and considers the complexities of waging war with the Islamic State, we turn our eyes to the Oceans and Seas. In the coming years we will see the contours of the geopolitical response to terrorism, the refugee crisis, the potential for a climate deal in Paris, the divergences in growth, asset prices, and central bank monetary policy. But we look to the seas in the hopes of finding something that is predictable and durable … something that might lend insight and purpose to the capital markets.
Indeed, looking out at the North Sea from his home in 18th century Scotland, economist Adam Smith might easily have pondered the potential of this economic frontier as he penned his seminal book, The Wealth of Nations. Three centuries later it’s not too late to reflect upon, and respect, the unimaginable wealth represented by the seas. Erika Karp Founder & Chief Executive Officer Smith understood human nature, the drive for economic well-being, the good Cornerstone Capital Inc. sense of playing to our strengths, and the human urge to trade. But could he have forecast the extent of today’s industrialization of the seas? And what might he do to avoid “the tragedy of the horizons” colliding with “the tragedy of the commons”? In other words, exploitation for the near term without long-term stewardship of that which is most precious.
In this month’s JSFB we consider that very issue—how to balance our economic reliance on the oceans with the pressing need to halt the degradation of marine life and preserve the tremendous value that yet remains. As Kimberly Gladman of JUST Capital Foundation writes in her elegantly articulated “Sustainable Editorial,” the ocean represents an “immensely rich frontier for the further expansion of human knowledge and imagination.”
Today an estimated 61% of the world’s population lives within 10km of an ocean. A similar proportion of global GDP comes from coastal areas within 100km of the seashore. And, as explained by Brad Ack of the World Wildlife Fund in his “Accelerating Impact” article, his team calculated the economic value of the oceans, arriving at a valuation of $24 trillion USD— essentially the seventh-largest world “economy.”
There is ample evidence of decline. As Karen Sack of Ocean Unite highlights in her “Sustainable Editorial,” 90% of fish stocks are either fully fished or overfished, and ocean acidity has soared over the past century. Coral reefs could die out by 2050. And, as The Nature Conservancy’s Maria Damanaki points out, “You cannot have a conversation about climate change without talking about sea level rise, increasingly severe coastal storms, damaged natural systems and other impacts to our oceans and coastal communities.”
2 / Cornerstone Journal of Sustainable Finance & BankingSM / November 2015 However, there are also many organizations creating and supporting ingenious programs to combat the decline. Torsten Thiele of Global Ocean Trust and Mark Spalding of The Ocean Foundation (TOF) both discuss Blue Carbon initiatives in their “Accelerating Impact” articles. In a second contribution to this issue, Mark also explains the concrete role metrics play in ensuring the philanthropic support TOF receives is targeted most effectively. Linda Cornish of the Seafood Nutrition Partnership highlights her organizations efforts to promote consumption of seafood – which in turn promotes efforts to spread sustainable stewardship of fish and other seafood supplies. And even the yachting industry plays a significant positive role, with Ports of Cause working to promote sustainable design innovations and LEED-inspired certification for yachting manufacturers, not to mention inspiring their wealthy clientele to support efforts to preserve the marine environment they clearly value.
Clearly, much of today’s “wealth of nations” is derived from the oceans and seas. To preserve this asset for future generations, we should draw upon the best thinkers, practices, and policies in economics, business, finance and civil society to mobilize the mainstream of society in the blue economy.
My sincere regards, Erika
Erika Karp Founder and Chief Executive Officer
November 2015 / Cornerstone Journal of Sustainable Finance & BankingSM / 3 Table of Contents
CEO’s Letter on Sustainable Finance & Banking 2 Market Summary Overview 5 Market & Global Sector Performance, Monetary Policy & ESG Data 7
Global Market Strategy Regional and Sector Strategy: Monthly Update Michael Geraghty, Global Markets Strategist 14 Cornerstone Capital Group Department of Labor: John K.S. Wilson, Head of Corporate Governance, 17 ESG Compatible with Fiduciary Duty Engagement and Research, Cornerstone Capital Group
Accelerating Impact Conserving Ocean Capital for Perpetual Returns Brad Ack, Senior Vice President of Oceans, 19 World Wildlife Fund The Promise of Blue Finance Torsten Thiele, Founder, 21 Global Ocean Trust
Offset Your Life the Blue Way Mark Spalding, President, 23 The Ocean Foundation
Enhanced Analytics Can Financial Innovation Make Oceans a Global Maria Damanaki, Global Managing Director for Oceans, 25 Climate Solution? The Nature Conservancy Giving with Your Heart and Your Head: Mark Spalding, President, 27 Using Metrics in Philanthropy The Ocean Foundation
Open Source Excellence Old Man, Nutrition, and the Sea Linda Cornish, Executive Director, 30 Seafood Nutrition Partnership Mega Yachts: Victoria Cerrone, JD, Co-founder & Director of Luxury Brand 32 Incubators and Economic Engines for Innovation Partnerships, Ports of Cause
Sustainable Editorial Call to Responsibility: Karen Sack, Managing Director, 34 Salvage Our Most Valuable Natural Capital Asset Ocean Unite The Oceans and Us Kimberly Gladman, PhD, CFA, Managing Director for Research, 37 The JUST Capital Foundation Upcoming Events: Global ESG Calendar 39
JSFB Subscription Form 40
Recent Articles 42
Cornerstone Capital Team 43
Important Disclosures 44
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Market Summary Overview
In a sign of bullish investor sentiment, risk assets continue to recover from August’s market selloff, despite the growing prospect of an initial rate hike by the Fed in December, as well as heightened global security concerns following the terrorist attacks in Paris. Central bank policy remains a focal point for investors as they consider the ramifications of less accommodative Fed policy offset by more aggressive ECB actions. In currency markets, the US Dollar approached the multi-year high recorded in March against a basket of other currencies (DXY index), on the back of stronger relative economic growth and continued diverging monetary policy. Meanwhile, this has exacerbated pressure on commodity prices as evidenced by Brent falling below $45/barrel.
US equities edged higher despite mixed economic data. The November NAHB Housing Market Index came in at 62, indicating moderate growth despite dropping three points from a revised October reading of 65. The ISM Manufacturing Index fell to 50.1 in October from 50.2 in September, just a single tick above the 50-mark that separates expansion from contraction. Investors remain cautiously optimistic, but it’s becoming clear the strong dollar and low commodity prices are impacting the manufacturing sector. Weakness is also showing up in other areas of the economy: Retail sales rose 0.1% in October, below consensus expectation of 0.3%, and producer prices fell 0.4% over the same period. On the jobs front, the Labor Department’s October release reported that the economy added 271,000 positions, beating the consensus estimate of 185,000 jobs, while net total employment gains in the prior two months were revised 12,000 higher. Meanwhile, the unemployment rate fell to 5% and average hourly earnings rose 0.4%. The strong employment and wage figures, along with October’s Federal Open Markets Committee’s (FOMC) minutes, appear to be signaling a potential December rate hike.
Europe’s nascent economic recovery is having trouble gaining momentum. Q3 GDP growth in the Eurozone decelerated to 0.3% from 0.4% in Q2 and 0.5% in Q1. Although low energy prices and euro depreciation benefit consumer spending and exports, respectively, weakness in emerging markets continue to weigh on Europe’s recovery. As such, Germany’s industrial production fell by 0.3% in the quarter, and factory orders have now declined for three consecutive months. GDP growth in the UK slowed more than expected to 0.5% in the third quarter of 2015, reducing the already remote prospects of an interest rate hike form the Bank of England this year.
Elsewhere in the developed markets, Japan entered its fourth technical recession in five years as third quarter GDP contracted by 0.8%, following a 0.7% drop in the preceding quarter. The country’s exports – hit by weakening demand in China – fell for the first time in over a year. The Bank of Japan says the recession isn’t due to weaker demand but instead points to inventory adjustments. It acknowledges, however, that wage growth and domestic consumption remain sluggish. Despite the economic recession, the weak yen
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is benefiting corporate profits and the Nikkei 225 is once again approaching multi-decade highs.
In emerging markets, the People’s Bank of China (PBOC) lowered its benchmark interest rate by 25 basis points and reserve requirement ratio by 50 basis points to combat flagging economic growth. This marked the sixth interest rate cut and fourth reserve requirement reduction since November 2014. Separately, Brazil fell deeper into recession as its economy contracted 1.4% in the third quarter, and inflation came in at 10.3% year-over-year, a twelve-year high.
On a one-month trailing basis, the MSCI World Index (a developed market proxy) outperformed the MSCI Emerging Markets Index by approximately 6.0%, bringing the YTD relative outperformance to 13.1%. Large-cap equities outperformed their small-cap counterparts by 1.9%, contributing to outperformance of 4.7% on a YTD basis. From a sector perspective, performance was mixed between defensives and cyclicals. In the MSCI ACWI (broad index for both developed and emerging equities), technology and Industrials outperformed, while materials and utilities lagged.
With the third quarter earnings season nearing an end, approximately 75% of S&P 500 companies posted a positive earnings surprise, in line with positive surprises reported in the prior quarter. Top-line results were less impressive, with 44% of companies posting a positive surprise relative to 49% in the prior quarter. Thus far, the healthcare sector has the highest percentage of earnings beats at 90%, while the technology and telecom sectors have also seen 80% or more of their constituents beating estimates. Conversely, the materials and utilities sectors are delivering weaker results, with only 67% and 55% of companies, respectively, beating estimates.
Andy Zheng contributed to this article.
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Market Summary Market and Global Sector Performance
MARKET / INDEX PERFORMANCE
As of 11/19/2015 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B Div. Yield
US Equity Indices
DJIA 3.29 2.87 1.76 16.0 3.1 2.5
S&P 500 2.69 0.74 3.10 17.6 2.7 2.1
Nasdaq 3.65 1.45 8.42 22.9 3.6 1.2
Russell 2000 0.76 -2.23 -1.61 27.9 1.9 1.4
MSCI KLD 400 Social 2.41 0.51 2.21 19.0 3.4 2.0
Developed International Indices
Euro STOXX 50 5.65 0.98 13.21 15.0 1.6 3.5
in USD -0.17 -2.31 0.09 FTSE 100 0.28 -0.22 0.28 15.8 1.8 4.1
in USD -1.03 -2.62 -1.72 CAC 40 4.62 1.00 18.46 15.8 1.5 3.4
in USD -1.13 -2.28 4.74
DAX 8.95 3.67 12.94 13.6 1.7 2.8
in USD 2.96 0.30 -0.61 Nikkei 225 9.53 -1.03 15.69 19.1 1.7 1.6
in USD 6.33 -0.22 12.30
ASX 200 0.47 -0.12 2.88 15.6 1.7 5.0
in USD -0.91 -2.37 -9.80 Emerging Market Indices
IBOVESPA 0.86 2.72 -4.30 13.7 1.2 4.6
in USD 4.86 -3.95 -32.36
Shanghai Comp 6.82 -4.54 13.59 15.5 1.8 1.9
in USD 6.46 -4.28 10.48
KOSPI -2.04 2.55 3.92 13.1 1.0 1.5
in USD -4.62 4.69 -1.95
SENSEX -5.49 -7.22 -4.70 17.1 2.6 1.7
in USD -7.32 -8.61 -9.09 Bovespa Corp. Sustainability -2.71 -1.27 -6.45 18.7 1.1 4.1
in USD 1.15 -7.68 -33.88
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As of 11/19/2015 (local currency) T1M (%) T3M (%) YTD (%) 2015 P/E 2015 P/B
Global Market Indices MSCI World 0.94 -1.39 1.28 17.0 2.1
MSCI All-Country World -0.43 -1.96 -3.51 14.3 1.5
MSCI EAFE -1.06 -3.74 0.55 15.6 1.6
MSCI Emerging Markets -5.06 -1.62 -11.86 12.1 1.3
DJ Sustainability World Comp 0.37 -1.38 -1.62 15.5 1.8
FTSE4Good Global 1.04 -1.12 2.44 15.9 2.0
Fixed Income Barclays US Aggregate -0.91 -0.21 0.63
Commodities Levels 11/19/2015 5/19/2015 11/19/2014 WTI Crude 40.35 59.91 75.01 ICE Brent Crude 44.20 66.60 82.70
NYMEX Natural Gas 2.33 3.28 4.03
Spot Gold 1072.80 1207.86 1182.68
LME 3mth Copper 4611 6380 6631 CBOT Corn 369.5 390.75 415 ICE ECX Emission 8.61 7.40 7.15 Currencies Levels 11/19/2015 5/19/2015 11/19/2014
EUR/USD 1.07 1.12 1.26
USD/JPY 123.06 120.69 117.97
GBP/USD 1.53 1.55 1.57
AUD/JPY 88.09 95.52 101.67 DXY Index 99.34 95.27 87.65
Source: Bloomberg, Barclays. Equity Returns: All returns represent total return for stated period. Dividends and coupons are not included in the DAX and BOVESPA indices. Bond Returns: All returns represent total return for the stated period. Index characteristics: P/E, P/B, and Dividend Yield are based on Bloomberg consensus estimates for the stated period.
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MSCI ACWI SECTOR PERFORMANCE
As of 11/19//2015 1 Month Price Return (%) YTD Price Return (%)
Source: Bloomberg. Sector returns are based on GICS Source: Bloomberg. Sector returns are based on GICS methodology. MSCI ACWI is a free-float weighted equity index methodology. MSCI ACWI is a free-float weighted equity index that includes both emerging and developed world markets. that includes both emerging and developed world markets.
US EQUITY STYLE PERFORMANCE Style box returns are based on Russell Indices with the exception of the Large-Cap Blend box, which reflects the S&P 500 Index. All values are cumulative total return for the stated period including the reinvestment of dividends. The index used from left to right, top to bottom are: Russell 1000 Value Index, S&P 500 Index, Russell 1000 Growth Index, Russell Midcap Value Index, Russell Midcap Index, Russell Midcap Growth Index, Russell 2000 Value Index, Russell 2000 Index and Russell 2000 Growth Index.
1 Month Year to Date
Value Blend Growth Value Blend Growth
1.9 2.7 3.0 -1.6 3.1 7.2
Large Large
-2.3 -0.5 1.2
0.2 0.5 0.8 Mid Mid
0.1 0.8 1.4 -4.5 -1.6 1.2
Small Small
Source: Bloomberg Source: Bloomberg
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SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP
As of 11/19/2015 Total Price Return EV/ Div ESG Mkt Cap (Local YTD % P/E EBITDA Yield % Disclosure Company name Ticker Industry (US$ Bn) ) (local) 2015E 2015E 2015E Score
Consumer Disc. Amazon.com AMZN Internet & 268.1 573.2 84.7 107.6 25.8 N/A 16.9 Catalog Retail Toyota Motor 7203.JP Automobiles 210.5 7356.0 -1.2 9.4 10.0 N/A 33.5 Corp The Walt Disney DIS Media 184.8 109.5 16.9 21.5 12.6 1.2 35.5 Co Home Depot Inc HD Specialty Retail 158.1 123.1 19.1 23.2 12.9 1.9 27.3
Comcast Corp CMCSA Media 153.7 61.6 7.9 18.7 8.1 1.6 23.6
Consumer Staples Nestle NESN.VX Food Products 245.0 73.5 3.7 22.1 14.7 3.0 55.0
The Procter & PG Household 203.9 75.2 -15.5 19.9 12.9 3.5 46.7 Gamble Co Products Wal-Mart Stores WMT Food & Staples 188.7 58.9 -30.2 13.1 6.9 3.3 37.8 Retailing Anheuser-Busch ABI.BB Beverages 186.5 102.5 11.2 22.7 13.5 2.9 54.1 Inbev The Coca-Cola KO Beverages 182.7 42.0 2.0 20.9 16.7 3.1 33.5 Co Energy Exxon Mobil XOM Oil, Gas & 337.7 81.0 -10.2 21.0 8.4 3.6 60.2 Consumable Fuels Petrochina Co 857.HK Oil, Gas & 244.2 6.5 -22.5 19.3 7.9 3.0 32.0 Consumable Fuels Royal Dutch RDSA.LN Oil, Gas & 169.4 90.0 -17.1 27.3 6.7 4.8 58.1 Shell Consumable Fuels Chevron CVX Oil, Gas & 176.2 1774.5 -13.7 13.8 5.3 6.9 52.3 Consumable Fuels Total Sa FP.FP Oil, Gas & 122.9 45.0 10.3 12.7 5.4 5.4 55.6 Consumable Fuels Financials Berkshire BRK/B Diversified 329.6 133.6 -11.0 18.4 N/A N/A 13.6 Hathaway Financial Services Wells Fargo & WFC Banks 269.8 52.6 -2.2 12.7 N/A 2.9 17.5 Co Ind & Comm 1398.HK Banks 246.9 5.1 -6.1 5.3 N/A 6.3 32.0 Bank of China JPMorgan JPM Banks 230.1 62.2 2.1 10.6 N/A 2.8 42.1 Chase China 939.HK Banks 186.9 5.8 -5.0 5.1 N/A 6.5 31.6 Construction Bank
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SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP (CONTINUED)
As of 11/19/2015
Total Price Return EV/ Div ESG Mkt Cap (Local YTD % P/E EBITDA Yield % Disclosure Company name Ticker Industry (US$ Bn) ) (local) 2015E 2015E 2015E Score
Health Care Johnson & JNJ Pharmaceuticals 271.2 97.9 -4.3 15.9 11.0 3.1 57.0 Johnson Novartis AG NOVN.VX Pharmaceuticals 253.0 90.4 0.6 18.2 17.5 2.9 64.0
Roche Holdings ROG.VX Pharmaceuticals 235.3 260.5 -0.5 18.5 12.4 3.1 50.0
Pfizer PFE Pharmaceuticals 212.8 34.5 13.5 16.5 10.8 3.2 42.6
Gilead Sciences GILD Biotechnology 152.1 103.6 10.8 8.9 6.6 1.7 14.0
Industrials General Electric GE Industrial 292.7 29.0 17.8 22.2 10.9 3.2 56.2 Co Conglomerates Boeing BA Aerospace & 94.1 138.4 8.5 17.2 9.2 2.6 35.1 Defense United Parcel ups.us Air Freight & 93.4 104.3 -4.2 19.8 10.3 2.8 59.9 Service Logistics 3M MMM Industrial 92.5 148.0 -8.2 19.0 11.4 2.8 55.8 Conglomerates Siemens SIE.GR Industrial 84.0 84.2 -7.0 13.0 10.0 3.9 55.0 Conglomerates Info Tech Apple AAPL Technology 637.2 111.7 2.5 12.2 6.0 1.9 45.9 Hardware, Storage & Alphabet GOOGL Internet Software 468.8 700.0 31.9 24.2 13.4 N/A 15.3 & Services Microsoft Corp MSFT Software 380.9 47.6 4.6 17.7 9.5 3.0 34.3
Facebook FB Internet Software 277.7 98.5 26.2 47.5 24.5 N/A 17.4 & Services Visa V IT Services 187.3 77.0 18.1 29.5 18.7 0.6 19.0
Materials BHP Billiton Ltd BHP.AU Metals & Mining 93.4 24.7 -4.2 30.5 7.7 9.8 58.7
BASF BAS.GY Chemicals 74.2 71.3 5.3 14.0 7.5 3.9 60.3
Saudi Basic Ind. SABIC.AB Chemicals 72.5 90.7 16.1 14.4 7.3 5.5 32.6
Rio Tinto RIO.AU Metals & Mining 69.1 53.4 -3.1 14.7 7.1 8.0 57.4
Dow Chemical DOW.US Chemicals 54.9 47.4 6.8 14.9 8.1 3.5 57.4
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SECTOR SNAPSHOT – TOP 5 COMPANIES BY MARKET CAP (CONTINUED) As of 11/19/2015
Total Price Return EV/ Div ESG Mkt Cap (Local YTD % P/E EBITDA Yield % Disclosure Company name Ticker Industry (US$ Bn) ) (local) 2015E 2015E 2015E Score
Telecom China Mobile 941.HK Wireless 253.5 96.0 9.3 14.2 4.6 3.0 43.2 Telecommunication Ser AT&T T Diversified 206.9 33.6 5.9 12.8 6.4 5.6 50.6 Telecommunication Verizon VZ Diversified 181.7 44.7 0.2 11.4 6.3 5.0 36.6 Telecommunication Vodafone VOD.LN Wireless 85.6 208.4 -3.4 44.3 7.0 6.0 52.7 Telecommunication Ser Nippon 9432.jp Diversified 81.3 4273.0 40.9 14.0 5.1 2.3 44.6 Telegraph Telecommunication Utilities National Grid NG/ LN Multi-Utilities 53.6 925.7 4.1 15.8 10.5 5.1 30.6
Duke Energy DUK Electric Utilities 50.6 73.6 -9.1 15.9 9.8 4.5 50.2
Nextera Energy NEE.US Electric Utilities 47.8 103.8 -0.1 18.4 10.4 3.0 45.3
Iberdrola Sa ibe.sm Electric Utilities 44.7 6.2 14.1 16.5 8.9 2.5 70.2
Enel ENEL.IM Electric Utilities 43.8 4.1 14.9 12.8 6.7 3.4 64.5
Source: Bloomberg. The securities in each sector represent the largest companies by market cap in the MSCI ACWI in their respective sectors. Sector classification is based on GICS methodology. Equity characteristics: P/E, EV/EBITDA and Dividend Yield are based on Bloomberg consensus estimates for stated period.
GDP / CONSUMER PRICE INFLATION / RATES
Real GDP (% YoY) CPI (% YoY) Official Rates Long Rates Region/Countries 2014 2015E 2016E 2014 2015E 2016E 2014 2015E 2016E 2014 2015E 2016E United States 2.4 2.4 2.5 1.6 0.2 1.8 0.3 0.5 1.3 2.2 2.3 2.9 Euro Area 0.9 1.5 1.7 0.4 0.1 1.1 0.1 0.1 0.1 - - - Japan 0.2 0.6 1.1 2.7 0.8 0.9 0.1 0.1 0.1 0.4 0.4 0.6 UK 2.6 2.4 2.3 1.5 0.1 1.3 0.5 0.5 1.1 2.2 2.0 3.8 Australia 2.7 2.3 2.6 2.5 1.6 2.4 2.5 2.0 1.9 3.0 2.8 3.1 China 7.4 6.9 6.5 2.0 1.6 2.0 5.6 4.4 4.2 3.7 3.3 3.3 Brazil 0.1 -3.0 -1.1 6.3 8.9 6.5 11.6 14.3 13.1 - - - **India 4.7 7.4 7.4 7.2 6.2 5.0 8.0 6.8 6.6 8.1 7.4 7.1
Source: Bloomberg. Estimates are composite of Bloomberg contributor estimates. *Italicized text represents actual data. ** India fiscal year runs to March 31.
MONETARY POLICY
Nov-15 May-15 Nov-14 Monetary Base growth (YoY) 4.6% 2.1% 5.6% M-2 growth (YoY) 6.6% 6.0% 5.9% Money multiplier (M-2/mon base) 3.0 3.0 3.0 3Q15 3Q14 3Q13 Velocity of money (GDP/M-2) 1.48 1.53 1.55 Source: Federal Reserve Bank of St. Louis
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KEY ECONOMIC CHARTS
C&I Loan Growth (%) University of Michigan Survey of Consumer Sentiment 30 120 20 110 10 100 90 0 80 -10 % YoY 70 -20 60 -30 50
1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Source: Federal Reserve Bank of St. Louis Source: Bloomberg
NFIM Small Business Optimism Index ISM Manufacturing Purchasing Managers Index 110 80 105 70 100 95 60 90 50 85 40 80 30 75 70 20 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1994 1997 2000 2003 2006 2009 2012 1975 1977 1979 1982 1984 1987 1989 1991 1994 1996 1999 2001 2004 2006 2008 2011 2013
Source: Bloomberg Source: Bloomberg
US Treasury Yield Curve US Initial Jobless Claims 4.00 11/19/2015 700 5/19/2015 600 3.00 11/19/2014 500 400
% 2.00 (000s) 300 1.00 200 100 0.00
1M 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y 30Y 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015
Source: Bloomberg Source: Bloomberg
Production Employees Average Hourly Earnings 10.0
8.0
6.0
% YoY 4.0
2.0
0.0 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013
Source: Federal Reserve Bank of St. Louis
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Global Market Strategy Regional and Sector Strategy: Monthly Update
By Michael Geraghty, Global Markets Strategist, Cornerstone Capital Group
2016 Outlook. After a cautious outlook for 2015, we now expect modest gains in global equity markets in 2016. Moderate economic growth is likely to continue in most Developed Markets and to resume in some Emerging Markets. As for valuations, P/E multiples seem unlikely to contract materially. A combination of stable P/Es and 5-10% earnings growth would support modest gains in global equities in 2016.
©doomu/Crystal Graphics Upgrade Two Sectors with Exposure to Global Growth. Reflecting attractive valuations and improving earnings momentum, we upgrade the Consumer Discretionary and Information Technology sectors to Overweight from Neutral. These two sectors should benefit from global economic growth. Japan, the sole Overweight in our regional strategy, has the largest exposure globally to the Consumer Discretionary sector.
Strategy Remains Selective. We are Underweight the Energy, Materials and Industrial sectors, in large part because of the absence of robust global growth. In terms of regions, we don’t favor areas with heavy exposure to commodities: Latin America (Underweight), South Africa and Russia (both ranked Neutral).
Figure 1: Regional Over- and Underweights Figure 2: Sector Over- and Underweights Arrows Indicate Change vs. Last Month
Source: Cornerstone Capital Group Source: Cornerstone Capital Group
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2016 Outlook: Modest Gains for Equity Markets
In aggregate, global equity markets have been relatively flat in 2015, with the MSCI All Country World Index (ACWI) down 1.4% year-to-date in dollar terms. (Of course, some equity markets have been quite strong — Russia +11% — and others quite weak — Brazil -38%.) As outlined below, our proprietary “Investment Clock,” which has had a cautious outlook for equities in 2015, now suggests modest gains for equity markets in 2016. In addition, an analysis of earnings fundamentals also supports a more constructive outlook.
Earnings Fundamentals: Positive
Figure 3 illustrates that, through Q3 2015, six sectors representing 57% of the MSCI ACWI had negative year on-year earnings growth: Consumer Staples, Energy, Financials, Industrials, Materials, Telecommunication Services. Moreover, two of those sectors experienced double-digit declines in earnings: Energy, Materials.
Figure 3: Earnings Before Extraordinary Items (Index: 1/2012 = 100)
Source: Cornerstone Capital Group
Obviously, weakness in oil and commodity prices weighed on the Energy and Materials sectors. While it is beyond our purview to speculate about such matters, a modest rebound in oil and commodity prices would clearly be a positive for these two sectors. That said, price stabilization would by itself be material to the earnings of the two sectors given that earnings comparisons are fairly easy, reflecting the 55% decline in the earnings of the Energy sector in 2015, and the 24% decline in the earnings of the Materials sector.
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Tepid global demand contributed to weakness in oil and commodity prices in 2015. Figure 4 illustrates that it is expected that the world’s major economies will continue to grow (albeit slowly) in 2016, while some Emerging Markets that were in recession in 2015 are expected to return to growth in 2016—e.g., Latin America, Russia. And, while much has been made about the “slowing” of China’s economy, it is still expected to grow almost three times as fast as North America in 2016.
Figure 4: Expected Real GDP Growth: 2015, 2016
Source: Bloomberg
In sum then, there are grounds to believe that 2016 will be a year of continued earnings growth in the Consumer Discretionary, Information Technology, Health Care and Utilities sectors, and renewed earnings growth in the Consumer Staples, Financials, Industrials and Telecom Services sectors, which experienced just single-digit declines in earnings in 2015. Moreover, as noted above, even a stabilization in oil and commodity prices would be beneficial to the earnings of the Energy and Material sectors. For these reasons, aggregate earnings growth of 5-10% seems plausible.
Separately, concomitant with modest growth in earnings, P/Es seem unlikely to contract materially. Globally, inflation will likely remain low, the major central banks seem reluctant to hike interest rates aggressively and, reflecting the “global savings glut,” there is a surplus of capital searching for returns. This combination of stable P/Es and 5-10% earnings growth supports an outlook for modest gains in global equities in 2016.
Michael Geraghty is the Global Markets Strategist for Cornerstone Capital Group. He has over three decades of experience in the financial services industry including working as an investment strategist at UBS and Citi.
This article is an excerpt from a Cornerstone Capital Group research report November 2, 2015.
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Global Market Strategy Department of Labor: ESG Compatible with Fiduciary Duty
By John Wilson, Head of Corporate Governance, Engagement and Research, Cornerstone Capital Group
The Department of Labor (DOL) has affirmed that incorporating environmental, social and governance (ESG) factors into investments is compatible with the fiduciary duty of plan sponsors covered under the Employee Retirement Income Securities Act (ERISA).
According to DOL Interpretive Bulletin 2015-01, ERISA does not preclude plan sponsors from incorporating Environmental, Social and Governance (ESG) considerations into investment decisions, as long as those decisions do not hamper portfolio returns or impose additional risk on the plan. Plan sponsors are bound by a fiduciary duty to act prudently and in the best ©Gary He / US DOL economic interests of plan participants, particularly with respect to portfolio risk and return.
Cornerstone Capital Group has explored the range of ESG strategies available to fiduciaries in our ESG Essentials – A Guide for Investors report. Although many large institutions have used these strategies successfully for many years, some investors have continued to believe that ERISA guidelines preclude ESG incorporation. The Department of Labor found that previous guidance “unduly discouraged” plan sponsors from considering “Economically Targeted Investments,” (ETIs), those that are selected at least in part for benefits other than investment returns. The new document explains how ESG is consistent with the responsibilities of investors:
An important purpose of this Interpretive Bulletin is to clarify that plan fiduciaries should appropriately consider factors that potentially influence risk and return. Environmental, social, and governance issues may have a direct relationship to the economic value of the plan’s investment. In these instances, such issues are… proper components of the fiduciary’s primary analysis of the economic merits of competing investment choices….
In addition, this Interpretive Bulletin also clarifies that plan fiduciaries may invest in ETIs based, in part, on their collateral benefits so long as the investment is economically equivalent, with respect to return and risk to beneficiaries in the appropriate time horizon, to investments without such collateral benefits.
These “collateral benefits” include environmental protection, social equity and financial stability, which Cornerstone considers necessary outcomes for the mitigation of long-term macroeconomic investment risk.
The DOL’s observations are consistent with Cornerstone’s publication Sustainable Investing: Addressing the Myth of Underperformance, which identifies several studies that demonstrate that consideration of ESG factors
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may strengthen investment analysis, and in any case need not detract from risk or return expectations.
The bulletin also indicates that plan sponsors may develop policies concerning ESG issues, or to consider how external investment managers take these factors into account, as long as the managers’ investment practices are consistent with ERISA rules and guidance.
The new guidance provides comfort to investors who are interested in ESG but have been concerned about the implications for fiduciary duty. Investors may consider how, executed prudently, integration of corporate governance and sustainability considerations can both enhance investment strategies and offer desirable “collateral benefits.”
John K.S. Wilson is the Head of Corporate Governance, Engagement & Research at Cornerstone Capital Group. John has over 18 years of experience in socially responsible investing and corporate governance.
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Accelerating Impact Conserving Ocean Capital for Perpetual Returns
By Brad Ack, Senior Vice President of Oceans, World Wildlife Fund
The Primeiras e Segundas Environmental Protection Area, Northern Mozambique, is a coastal marine reserve that covers more than 4,020 square miles, including the 10 islands of the archipelago. ©Laura Margison / WWF
The ocean is one of the key pieces of Earth’s natural capital, providing “free” goods and services, including 50% of the oxygen we breathe, regulation of the global water cycle, and a significant portion of the food we eat.
Earlier this year, scientists at World Wildlife Fund (WWF), with help from researchers at the University of Queensland’s Global Change Institute and the Boston Consulting Group, calculated the ocean’s economic value by quantifying the ocean’s assets — including goods and services like fisheries, tourism and coastal protections. We arrived at a valuation of $24 trillion, producing an annual income of some $2.5 trillion. When compared to the world’s top ten economies, the ocean ranks seventh.
But unlike any of the leading national economies, the ocean is a global commons, downstream from everywhere on the planet, and subject to the collective footprint of seven-plus billion people. As its shareholders, we have been making simultaneous and continuous withdrawals on this natural asset, with very little in the way of corresponding deposits.
So, like any trust fund or bank account, this incoherent management of our irreplaceable natural capital is leading us into the red — and toward bankruptcy. And the balance sheet is evidence of this. According to WWF’s Living Blue Planet Report,1 in the last four decades populations of marine mammals, birds, reptiles and fish have declined on average by half, with some dropping by nearly 75%. The loss of mangroves — perhaps one of the most valuable habitats on the planet — is estimated to be occurring at a rate five to ten times that of the loss of rainforest. Sea grasses and coral reefs, also incredibly productive and valuable, have seen similar losses and all face continuing threats.
1 http://www.worldwildlife.org/publications/living-blue-planet-report-2015
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The drivers of this degradation fall into three big categories: the removal of living resources from the ocean; the conversion, loss, degradation and alteration of the physical habitats that make up the ocean ecosystem; and the plethora of pollutants entering the ocean from myriad sources. At the same time, CO2 pollution also poses an overwhelming existential threat with the potential to alter the oceans almost beyond recognition.
With the planet’s population expected to rise to 9.6 billion by 2050, and with that the need for a 70% increase in food availability, the oceans face a future of continued pressure.
To reverse the decline of this asset, we need new, powerful, and rapidly scalable innovations that address the three big drivers of change, and to re-engineer these drivers to dramatically reduce their impacts, while simultaneously adding deposits into the account. These deposits would include rebuilding global fish stocks and setting significant areas of the oceans off-limits to destructive and extractive activities. ©Laura Margison / WWF Even though the challenges seem overwhelming and immense, there are solutions to secure a living ocean. At WWF, we are working across many partners to actively engage the fishing industry and national governments, increase financing to the fisheries sector, and develop more effective and lower-cost management tools and gear. We continue to extend the power of markets to support fisheries in transition towards sustainability, expanding the number and reach of corporate partnerships to support sustainable and traceable fisheries. We are working to develop and deploy technologies for achieving legally traceable fisheries, from bait to plate. In turn, this will deliver legal and sustainably sourced seafood to consumers who are increasingly concerned about their impact on the planet. We are also working with our partners throughout the WWF network and the rest of the conservation community to protect and manage significant areas of the oceans
Brad Ack leads WWF’s US that provide multiple ecosystem services. We work with the Natural Capital Oceans program, Project to bring the tool of ecosystem services valuation to influence national overseeing a talented team and regional policies and practices in pursuit of restored and protected coastal working on accelerating the and marine habitats. movement to sustainable Given the impacts of increasing atmospheric concentrations of greenhouse fishing and protecting gases on oceans, we are working hard to ensure that the upcoming December resilient marine ecosystems UN climate conference in Paris finds agreement for the need to dramatically around the world. Brad has reduce greenhouse gas pollution — one of the most critical investments needed worked on a wide range of to help our global ocean begin to recover. conservation and sustainable development By working together we can find the ingenuity and secure the resources needed initiatives across many to advance conservation and sustainable development to safeguard the future geographies, biomes and health and resilience of marine and coastal habitats, and to ultimately balance issues. the global ocean bank account.
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Accelerating Impact The Promise of Blue Finance
By Torsten Thiele, Founder of the Global Ocean Trust
The ocean today resembles a “failed state,” with a lack of rules, monitoring or enforcement, yet it covers 71% of the planet’s surface and delivers the majority of global ecosystem value. Given its scale and relevance for the global climate system, and to address mitigation and adaptation challenges cost- effectively, climate funding pathways need to address ocean health and governance challenges and to include significant ocean and coastal funding components.
The developed countries who are Parties to the UN Framework Convention on Climate Change (UNFCCC) made a commitment to mobilize $100 billion1 per year by 2020 to address climate change needs of developing countries. This commitment requires public ©Global Ocean Trust and private funding, including green bonds.
We highlight some of the significant and promising • Creating climate-compatible cities funding initiatives under way, and highlight potential further developments needed for Blue Finance to • Encouraging low-emission and climate- succeed. resilient agriculture
Green Climate Fund • Scaling up finance for forests and climate change The Green Climate Fund (GCF), established to serve as the vehicle for long-term funding under UNFCCC, • Enhancing resilience in Small Island will finance projects and programs that demonstrate Developing States (SIDS). the shift toward low-carbon and climate-resilient sustainable development in developing countries. To These accredited entities need to be encouraged to date, the GCF has received 35 government pledges for include projects aimed at building resilience of ocean over $10 billion. The GCF will deliver low-cost loans and coastal zones, emphasizing nature-based through “accredited entity” partners, who submit solutions, and integrating conservation measures into funding proposals for specific projects and programs. the delivery of multi-use infrastructure. Coastal communities and SIDS will be on the front lines of The GCF has identified the following investment climate change impact and require sustainable priorities: solutions. Mitigation components, such as enhancing natural carbon sinks via wholesale mangrove, reef • Transforming energy generation and access ecosystem and seagrass protection, should be
1 All amounts in US dollars.
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prioritized. The initial list of eight projects includes a Momentum is growing for setting up a dedicated wetland restoration scheme in Peru. Ocean Sustainability Bank as initially proposed by a group of leaders of environmental organizations Climate Bonds Initiative (including myself) in an open letter issued on World Ocean Day this year. Under this proposal, The Climate Bonds Initiative uses standards to governments and private institutions would commit maximize viable bond issuances with verifiable equity to an institution that would be able to environmental and social outcomes. Agreed proactively develop public-private partnerships to standards and processes allow a broad investor base deliver multi-use ocean infrastructure, act as a to access this market. The latest proposals for touchpoint for corporations to engage with climate agriculture and land use-related investments already solutions at scale, and bring expertise and capacity- include support for wetlands, mangroves and coastal building to the sector. Such an institution could be a and riverine fisheries. Further work will be required lasting commitment to a renewed effort to address the to include the full range of sustainable marine opportunities in the ocean-climate finance nexus infrastructure in such standards. following the Paris meeting. Given the scale of this sector, its relevance to One way to fund the institution would be to redirect a advanced financial markets, and its ability to deliver significant portion of the $30 billion of global new actors and partners rapidly, the initiative holds subsidies annually provided — mainly in fuel support promise as a key tool for ocean finance. Such green — to the fishing industry, which has resulted in bonds raised $36 billion in 2014 and as of late October unsustainable overfishing of the global ocean. $32.15 billion had been raised in 2015. Standards for agriculture, forests and other land-use are presently By harnessing the latest technologies and under consultation. innovations, the private sector can play a crucial role in delivering business approaches through new, More Action Needed: Some Ideas dedicated ocean impact venture funds. Defining and We need to develop further innovative financing delivering projects that are financially and mechanisms to deliver better ocean outcomes, environmentally viable while contributing to overall strengthen ocean resilience and deliver a wide range ocean technology and data solutions will bring a new of opportunities for public and private actors to focus, support cutting-edge science and research, and participate in developing ocean solutions. The help bring to market new products for these tough upcoming Paris Climate Change Conference provides environments. an opportunity to commit to further such efforts.
Torsten Thiele is Founder of the Global Ocean Trust Not only do we need faster development of innovative and was a 2014 Harvard Advanced Leadership solutions, but also deeper engagement. The Fellow. He has over 25 years of experience in project availability of finance is often constrained by finance, lending and investing, which he now applies institutional and procedural limitations. to deliver governance, technology and funding for Crowdfunding and citizen involvement can bring new sustainable ocean solutions. monies as well as support to a wider range of projects.
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Accelerating Impact Offset Your Life the Blue Way
By Mark Spalding, President, The Ocean Foundation
The consensus is in, and has been for years: Climate change is happening and, however large or small our individual carbon footprints may be, we must be held responsible. To reduce your carbon footprint, you must first change your behavior, and then you must look to offset what you can’t change.
Blue carbon is the most effective yet overlooked method for long-term sequestration and storage of carbon from the atmosphere. Of equal importance, investment in blue carbon provides invaluable ecosystem services that contribute to people’s ability to mitigate and adapt to the impacts of climate change.
Seagrass at Channel Islands, Blue carbon is the carbon dioxide captured by the NMS, California. © NOAA world’s ocean and coastal ecosystems. This carbon is stored in the form of biomass and sediments from mangroves, tidal marshes and seagrass meadows. Blue carbon programs, like The Ocean Foundation’s SeaGrass Grow project, are gaining attention as proactive, viable and innovative approaches that should be catalysts for the protection and restoration of our natural coastal and marine environments.
Why Seagrass? The ocean is by far the largest carbon sink in the world, removing 20-35% of atmospheric carbon emissions and storing 93% of the earth’s carbon dioxide. While planting trees is currently the most popular form of voluntary carbon offsets, it is by no means the most effective approach. Coastal seagrass beds store up to 83,000 metric tons of carbon dioxide per square kilometer, nearly three times the amount of terrestrial forests, which store only 30,000 metric tons per square kilometer. There is less oxygen in wet soil, therefore the decaying of organic plant material is slower and the carbon remains trapped and intact far longer, making seagrasses a more reliable carbon storage option. As one of the most effective options, seagrass meadows occupy less than 0.2% of the world’s oceans, yet are responsible for more than 10% of all carbon buried annually in the ocean.
Healthy seagrass meadows also play a role in the everyday health of our coastal waters and are key in the development of sustainable human communities. Along with providing blue carbon storage capabilities, seagrass offers very important ecosystem services. The underwater meadows provide critical buffers to storm surges, filters pollution from the water, stabilize the seafloor, provide protection from rising sea levels, support tourism and mitigate the effects of ocean acidification. As nurseries of the sea, healthy seagrass meadows support food security, and both commercial and recreational
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fishing: one acre of seagrass may support up to 40,000 fish and 50 million small invertebrates. And, in addition to providing nurseries for fish, seagrass meadows offer grazing opportunities for endangered sea turtles, manatees and dugongs. Seagrass meadows are essential to coastal resiliency.
All told, the economic value of seagrass meadows is ten times greater than that of tropical forests, and triple that of coral reefs. Every $1 invested in coastal restoration projects creates $15 in net economic benefits for the surrounding region.
Carbon Storage Ecosystems in Danger The time to restore blue carbon storage ecosystems is now. Coastal and marine ecosystems are under significant threat; 2-7% of the earth’s blue carbon sinks are lost annually, and unless we take more action immediately to resort these vital ecosystems, most may be lost within 20 years. As these ecosystems are destroyed, they release massive amounts of stored carbon that further contributes to ocean acidification.
In 2008, The Ocean Foundation launched the SeaGrass Grow project, one of the first blue carbon offset programs in the world. Through this innovative program, individuals or businesses can calculate the carbon footprint of their home, workplace or travel and choose to offset it through the voluntary purchase of Blue Carbon credits to restore and protect seagrass. We work with partners in coastal communities to restore seagrass meadows damaged by boat groundings and prop scars, dredging and coastal construction, nutrient pollution, and rapid environmental change. Restoring the meadows also restores their ability to take up carbon and store it for thousands of years. We created SeaGrass Grow to provide those who love the ocean a proactive and effective way to support its health, and to provide those looking to offset their carbon the best possible option. Those who choose to offset their carbon the blue way play a Seagrass and a shoal of fish in the Wakatobi National Park, Suwalesi, Indonesia. critical role in climate change mitigation now and in the future.
©Richard Unsworth / Marine Photobank Mark J. Spalding is President of The Ocean Foundation, serves on the Sargasso Sea Commission, and is a Senior Fellow at the Center for Blue Economy at the Middlebury Institute for International Studies.
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Enhanced Analytics Can Financial Innovation Make Oceans a Global Climate Solution?
By Maria Damanaki, Global Managing Director for Oceans, The Nature Conservancy
Aerial view of the Nahtik Marine Protected Area adjacent to the Enipein Mangrove Forest Reserve, Pohnpei, Micronesia. ©Nick Hall / The Nature Conservancy
With the United Nations Climate Change Conference But the longer we wait to act on climate change, the (COP21) in Paris right around the corner, we are at an more severe the impacts and the costs. important crossroads for the global health and sustainability of our oceans. The price tag, specifically, covers both sides of the climate change coin — the potential market impacts of You cannot have a conversation about climate change mitigating carbon pollution as well as the costs of without talking about sea level rise, increasingly protecting against and responding to climate-related severe coastal storms, damaged natural systems and disasters. other impacts to our oceans and coastal communities. In a speech delivered at Lloyds of London recently, What excites me, however, is that the size of this Bank of England Governor Mark Carney issued stark global challenge presents us with an enormous warnings about the potential economic opportunity to create positive change for oceans and destabilization of both sides of the issue: people. And this opportunity has an important first discussing the potential crippling costs of future through-line: transforming our relationship with disasters, then touching on the risk to markets of the nature. ballooning cost of carbon-intensive energy assets if companies don’t begin accurately reflecting their Nature-Based Solutions carbon impact. One area of climate action that is beginning to garner At nearly the same time, SwissRe’s Chief Executive the attention it deserves is nature-based climate Officer Michel Lies called on global leaders to reach solutions. They are cost-effective, flexible, and offer agreement at COP21 in December. SwissRe’s data significant co-benefits to the health and security of shows that natural disasters have cost on average communities and to biodiversity. $180 billion in damage per year over the last decade. The financial sector will play a crucial role in moving Seventy percent of that cost was uninsured. And these us more quickly to implementation of these solutions. costs can affect country credit ratings.
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These concerns reinforce the opportunity presented financing model with potential replicability for other by natural climate solutions – and marine ecosystems nations that are on the front lines of climate change. specifically — to both mitigate and protect us against climate change. Maximizing Natural Carbon Storage And as we look to nature to aid in reducing risk and In just the last year, there are emerging examples of increasing resilience, we are also finding significant innovation and progress. cost-saving mechanisms in nature that reduce carbon A Climate Insurance Premium for Nature pollution and mitigate climate change. Through our Mapping Ocean Wealth initiative, The The Conservancy estimates that conserving and better Nature Conservancy and cross-sector partners are managing the world’s tropical forests and other taking a comprehensive, location-based accounting of natural systems, including wetlands and grasslands, the full value to people of the ocean’s natural systems. has the carbon storage potential of roughly 25 percent of total global carbon emissions per year. And we are focusing on new ways to invest in the protective services of that natural infrastructure — While estimates for carbon capture and storage (CCS) such as coral and oyster reefs, mangroves, at coal plants and other stationary sources typically and salt marshes — to increase the climate and run north of $100 per ton, the cost of improving land disaster resilience of vulnerable coastal communities use is often less than $20 per ton. around the world. And protecting, restoring and sustainably managing One key way we are approaching this work is through these natural places has significant co-benefits for collaboration with SwissRe and other reinsurers to local economies, communities and biodiversity that bring nature’s risk reduction benefits into their risk engineered CCS could never boast. modeling. We are finding potential for natural infrastructure to reduce premium costs as well as the TNC has been working on preserving the carbon in price tag of disaster response. tropical forests for over a decade. More recently, we are applying that knowledge and experience to Together we’re also asking the question: can we bring explore the “blue carbon” potential of wetlands and to market insurance vehicles to conserve the natural mangroves in an effort to maximize the carbon systems themselves for their climate protective value? storage power of all natural systems. If so, this could be a significant financing breakthrough for natural infrastructure solutions. At COP21, and beyond, nature deserves to be at the I believe this will become a reality. table as a key cost-effective strategy for climate action as well as ocean sustainability. The financial sector Innovative Debt Finance for Country Action has a crucial role to play in helping ensure these nature-based solutions reach the scale of their global Another exciting development this year is a first-of- potential. its-kind debt-for-nature swap that the Government of
Seychelles announced with the Conservancy’s impact investing unit NatureVest and the country’s creditors Maria Damanaki is Global Managing Director for — the Paris Club. Oceans at The Nature Conservancy. She leads a global team focused on transforming how the world The deal will allow the country to redirect $30 million manages its oceans, including sustainable fisheries of its debt to invest in a comprehensive approach to management, large-scale protection and restoration ocean conservation and bolster its resilience to of coral reefs and other ecosystems, coastal climate change. resilience, and a first-of-its-kind mapping and quantification of the full value of the world’s oceans This is the first conservation debt swap completed to people. with the support of impact capital — serving as a new
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Enhanced Analytics Giving with Your Heart and Your Head: Using Metrics in Philanthropy
By Mark Spalding, President, The Ocean Foundation
You should give with your head, not with your heart — this is the underlying philosophy written about by Dan Kadlec for TIME.com, in “Philanthropists of the World: You’re Doing It Wrong!” and the book by Eric Friedman, Reinventing Philanthropy: A Framework for More Effective Giving. If a donor is to give money in the most effective way, he or she should identify charities that do the most good in terms of human lives saved for the least amount.
While this is a neat theory, appealing in its simplicity, it does not seem prudent to shun all other charitable action for its sake. There are many nuanced challenges that deserve attention — from human health to environmental degradation and the intersections in between.
Consider the challenges of the marine world. The ocean is the life support of our planet. It is our food, water, oxygen, global temperature balance, and our best carbon sink. One of the most ©The Ocean Foundation pressing threats to the seas, ocean acidification (OA), is not just about the shells of marine snails dissolving — it is about food security. When one in seven people rely on seafood for their main source of protein, but OA is damaging food webs and larval fish development, ocean health directly impacts human health. Sea level rise will not only affect our insurance rates — it will increasingly cause migrations of human populations and add pressure to already volatile refugee situations. When the U.S. Department of State and others recognize the implications of a changing ocean for national security, direct action for ocean conservation becomes a direct action to save lives.
With this in mind and after reading and reflecting on the theories of effective philanthropy, we asked, can we identify strategies that are more effective than others for saving the ocean? This question moves beyond standard metrics of cost effectiveness, overhead ratios, and other financial calculations into the ability to connect results achieved to specific actions.
Measuring the Impact of Non-Profit Initiatives Most not-for-profits adequately manage their funds and track their activities, but often do not have the processes in place to know if their work is advancing positive change. Like other non-profits, we at The Ocean Foundation (TOF) track our activities, the early results of that work (indicators), observable changes attributable to this work (outcomes) and the ultimate long-term positive impact we have (goals). This echoes the Bill and Melinda Gates Foundation’s method, which includes tracking activities and measures of execution as well as impacts and measures of change.
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Our effectiveness initiative, however, was designed to be more data driven: to connect evidence of proven effective conservation actions to positive impact in the marine world. We collect data so we can report real, measurable results towards our mission to support and strengthen those organizations dedicated to reversing the trend of destruction of our world ocean. For example, we track progress towards increasing awareness and understanding of marine issues by the number of peer-reviewed articles published, citations, conferences attended, or audiences reached, among other indicators. To protect habitats and species of concern, we track data such as the number of animals rehabilitated, sea turtle nests protected, or mangroves replanted, as well as more rigorous data such as the population of species or biodiversity of an area designated for protection.
Selection of data collected in annual questionnaire
Indicator FY14 FY15 Quick Trends
Number of tags/tracking devices deployed 58 157
Number of animal rehabilitations or rescues 2 6
Number of sea turtle hatchlings released 178,423 122,153
Number of sea turtle nests protected 3,100 1,556
Number of beach clean-ups 172 366
Total trash removed during beach clean-ups (in pounds) 116,698 124,754
Number of places with new/expanded protections 8 23
Total area of places with new/expanded protections (in sq miles) 34,738 37,37
Number of species with new/expanded protections 4 22
Population of all species with new/expanded protections 1 21
Number of elected officials recruited to support legislation on the 94 128 proposed creation/expansion of a protected area
Favorable actions, reform measures, or changes in policy by an 19 29 intergovernmental entity
Total number of people that have attended presentations 9,174 10,021
Number of peer-reviewed publications 30 51
Number of citations in relevant journals, articles, and other media 160 1,333
Source: The Ocean Foundation
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We support our mission through fiscal sponsorship, grant-making and core projects all directed at saving the ocean. Our goals are defined as our IRS Form 990 program areas — Protecting Species of Concern, Conserving Marine Habitats and Special Places, Building the Capacity of the Marine Conservation Community, and Expanding Ocean Literacy.
In order to ensure the funding directed toward these goals is used as effectively as possible, we created an evaluation system that cuts across our services and projects to address all of our varied work. Recognizing the diversity of programmatic activities, and drawing from extensive research, we identified five strategies that our programs utilize to achieve their missions. These
strategies are 1) research, 2) a model or demonstration project, 3) policy or Mark J. Spalding is advocacy, 4) community engagement, and 5) direct actions or interventions. President of The Ocean Foundation, serves on the TOF is now in its second year of collecting effectiveness data. We use our Sargasso Sea Commission, criteria at three levels: to inform intake of projects and grantees, to evaluate and is a Senior Fellow at the our work on an annual basis, and to think critically about the performance of Center for Blue Economy at our programs. When considering a new project or grantee, our knowledge of the Middlebury Institute for effective strategies helps to inform which we accept. For example, addressing International Studies. sea turtle bycatch is a compelling threat to work on, one that strums the
heartstrings with photos of individual charismatic species being caught, tangled and maimed. However, we know that intervening earlier has much more positive impact for a sea turtle population as a whole. Ensuring more sea turtles make it to the wild by protecting nesting beaches and releasing hatchlings is not only a more cost-effective method, but also a more effective method for rescuing populations and species on the brink of extinction. We can identify activities and life history stages where interventions will have the greatest impact, and follow through by committing resources to proven effective strategies and rejecting those projects that seek to capitalize on charismatic imagery with no data-backed evidence of success.
The monitoring and evaluations process also allows TOF to assess our own work, determining which program areas, strategies, or activities generate positive results and which do not. We generate, therefore, both quantitative and qualitative results that we use in assessments of our work, and to inform our work moving forward. By tracking our results, donors can know they are giving to programs that use proven, effective methods to address important ocean issues. We can give in a smarter way to protect our most critical resource-driver of climate, provider of food, means of transportation, and source of inspiration — our ocean.
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Open Source Excellence Old Man, Nutrition, and the Sea
By Linda Cornish, Executive Director, Seafood Nutrition Partnership
One of the largest public health challenges we face today is chronic disease, which accounts for more than 60% of the world’s preventable deaths1. Chronic disease, an umbrella category for illnesses such as heart disease, obesity, diabetes, and cancer, has grown significantly in the last 20 years and is costing us billions in medical expenses. And to a large extent these diseases can be prevented or mitigated through diet and lifestyle changes.
As part of the effort to shift away from diets that are calorie-dense but are mainly nutrient-poor, the public health sector is undergoing an awakening to the value of increasing seafood consumption. What do the seas have to do with nutrition? In essence, to grow old and healthy we need to take in nutrients from the seas. It really is “The Old Man and The Sea.”
Seafood is a lean protein filled with healthy fats, ©Klenova / Crystal Graphics vitamins, and minerals. It is also more environmentally efficient than other proteins to raising awareness of the critical health benefits that produce, with aquaculture using less feed (and less seafood can provide for all Americans. fresh water) than other proteins. Unfortunately, at present 80-90% of Americans are confused about Education: The Invaluable Health Resource seafood and whether to add it to their diets.2 The main reasons for such low rates of seafood consumption are At the core of SNP is its nutrition intervention program, lack of knowledge in selecting and buying seafood, low Eating Heart Healthy, which aims to increase confidence in knowing how to properly cook seafood, awareness of heart health by helping underserved and a perception that seafood is expensive. Americans, especially women, feed their families nutritious and healthy meals by demonstrating how Seafood Nutrition Partnership (SNP) released a simple and inexpensive it can be to incorporate whitepaper this October titled “Breaking Barriers: seafood into their diets and budgets. Empowering America’s Underserved with Resources and Access to a Healthy Diet.”3 This whitepaper Last year, the Seafood Nutrition Partnership outlines SNP’s campaign to bring seafood nutrition to concluded its Eating Heart Healthy pilot program. The those with the greatest need. Below is an excerpt: program, in partnership with Boston-based Brigham & Women’s Hospital, the teaching hospital of Harvard The Seafood Nutrition Partnership has taken up the Medical School, and Roxbury Tenants of Harvard charge of dispelling the notion that seafood is (RTH), a nonprofit affordable-housing community for expensive and only available to the wealthy, and is low- and moderate-income families, was designed to
1 World Health Organization. 2011. Global status report on 2 USDA AgResearch Magazine, August 2015, “Consumers noncommunicable diseases 2010. Missing Out On Seafood Benefits” http://www.who.int/nmh/publications/ncd_report_full_en.pdf http://agresearchmag.ars.usda.gov/2015/aug/seafood/ 3http://www.seafoodnutrition.org/uploads/1/9/5/0/19505793/snp_w hitepaper-oct2015.pdf
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help women curb their risk of heart disease through a Seven of those target markets, chosen because of seafood-rich diet. their high rates of CVD1, are in the top 14 states with the highest rates of obesity, according to the Robert For four weeks, female RTH residents participated in Wood Johnson Foundation’s new obesity report. heart health talks and cooking demonstrations, sampled omega-3 capsules, and were provided To be sure, education and targeted public health seafood recipes that average $10 to feed a family of campaigns are critical in spreading point-of-purchase four. At the end of the program, it was estimated that information and knowledge about how to select, order 92 percent of participants lowered their risk of sudden and prepare healthy proteins such as fish and cardiac death, and 6 in 10 participants were at a lower shellfish, where consumers are at increased risk of risk for general cardiac problems. making poor choices.
The success of the four-week program led SNP to SNP can only succeed with the growing number of launch pilot public health education campaigns in partners and donors that support this innovative Memphis, TN and Indianapolis, IN. SNP partnered campaign. We invite you to inquire on how you can with local chefs, stakeholders, community leaders and support this campaign by going to health professionals to host cooking demonstrations, www.seafoodnutrition.org. While there begin with the free health screenings for omega-3 levels, week-long first step of taking the Healthy Heart Pledge, which is restaurant events, and distribute free health education to eat seafood at least twice a week. May we all age literature and recipes highlighting the nutritional gracefully and enjoy the seas. benefits of seafood.
Linda Cornish is Executive Director for the Seafood The success of those pilots provided the foundation to Nutrition Partnership. She has held leadership and expand the grassroots, public health education management positions with Arthur Andersen, campaign this October, also National Seafood Month, Hitachi Business Consulting, Harrah’s to a total of nine cities, including: Birmingham, AL; Entertainment, Greater Memphis Chamber of Charleston, WV; Golden Isles, GA; Indianapolis, IN; Commerce, and Bill of Rights Institute. Jacksonville, FL; Lexington, KY; Memphis, TN; Oklahoma City, OK, and Toledo, OH.
4 Cardiovascular Disease
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Open Source Excellence Mega Yachts: Incubators and Economic Engines for Innovation
By Victoria Cerrone, Co-founder and Director of Luxury Brand Partnerships, Ports of Cause
It is no surprise that the concept of The Blue Economy is gaining traction at an accelerated pace as information on the health of our oceans becomes globalized and innovation creates new and improved ways of doing things. Innovation in the marine world is the catalyst for the rise of investment funds and portfolios targeted toward ocean-friendly solutions and investment opportunities that generate predictable income and have positive environmental and social impact. This mobilization of the global investment community is not only evidenced in typical industry sectors, but also in a sector that may not immediately come to mind: the yachting industry.
Behind the Image ©Ports of Cause The overall economic impact of the global yachting industry, yacht shows, and the diverse range of professional services that support them — including hospitality, luxury travel, culinary, and entertainment — is indisputable. The Fort Lauderdale International Boat Show alone has a reported economic impact of more than $500 million per year, trumping what some host cities of the Super Bowl rake in. Hundreds of families in Bridgeport, CT, survived the economic downturn and remained employed during the construction of mega yacht Cakewalk V. The yachts themselves represent a complex floating incubator of technological amazement, futuristic design, engineering and sustainably resourced materials that create enormous opportunity for growth in an industry whose reputation is arguably tarnished by the inequity of the haves and have nots.
The sheer cost of buying and maintaining yachts creates a kind of class envy and leads to criticism of such supposed decadence, waste and pollution, despite the fact that the collective carbon and environmental footprint of private yachts is a fraction of one percent of the global total. The impact of private yachts pales in comparison to that of land-based structures, private aviation or luxury automobiles. Moreover, for many yacht owners, the amount they spend on this indulgence is minimal compared with their net worth and, importantly, their philanthropic endeavors. For example, Google CEO Larry Page’s $45 million yacht pales in comparison with his $33.3 billion net worth – and the $177 million in stock he donated in 2014. Microsoft co-founder Paul Allen’s yacht, “Octopus,” cost more than $200 million, less than his annual charitable outlays.
Not Their Fathers’ Yacht… Another fascinating and little-known aspect of yachting is the rise of a new generation of yacht owners who are demanding higher levels of sustainable innovation, technology and wellness features, in addition to requiring vessels
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that can travel long distances to more remote and protected areas of the world, including Antarctica and the Northern Passage. This certainly triggers a different image in our minds than that of the traditional shiny white yachts sitting in the Mediterranean or the Caribbean. Simply stated, the new generation of yacht owners is driving the industry toward a more sustainable business model. These discerning yet socially conscious buyers are driving an economic and ecological awakening around hybrid engines, solar panels, composite teak-like materials, natural elements and Sustainable Luxury®. Likewise, upon realizing that it doesn’t cost any more to design yachts that have a reduced environmental impact, a race has begun within the industry to develop the most technologically advanced vessels in the history of yachting, attracting new investment in engineering and alternative fuel research. In essence, a yacht can be looked at as an incubator for innovation.
Ocean Zen Lounge To capitalize on the changing demands of the end user in yachting while promoting sustainable luxury, Ports of Cause (POC), a non-profit organization under the umbrella of Clear Yacht International, is launching an initiative called Ocean Zen Lounge. This multi-sensory, very artistic, moveable and scalable pavilion serves as a concentrated venue for the financial community to experience the inventiveness of the yachting industry first-hand through pre-vetted innovative product “pitches” similar to startup presentations. By bringing together the shipyards, manufacturers, brokers and clients at high- visibility yacht, luxury, and financial centers around the world, the Ocean Zen Ocean Zen Lounge. ©Ports of Cause Lounge becomes a knowledge center and point of reference for latest trends and technology.
Ocean Zen Lounge will also serve to showcase the industry’s sustainability
Victoria Cerrone, JD, is the initiatives. In late 2014, POC formally introduced a U.S. Green Building Co-Founder and Director of Council LEED-inspired rating and certification program for the yachting Luxury Brand Partnerships industry. Like LEED, the program encompasses baseline prerequisites for Ports of Cause, securing through “Game Changing/Future Proof” thinking and technologies for collaboration and corporate Sustainability and Occupant Wellness. To date, the program has undergone sponsorships with bespoke “beta testing” on numerous yacht designs and is now ready for full sustainable solutions in the implementation in early 2016. The certification program will be part of POC luxury sector. events and education series within the Ocean Zen Lounge during the 2016 yacht show season.
It is clear that just as “no man is an island,” rescuing and sustaining our oceans will be a group effort, involving corporate, environmental and social stakeholders. An alliance of like-minded people who have the economic ability to support the scientists, industry experts, investors and entrepreneurs who believe in the incredible positive power of the modern economy, the yachting industry has the opportunity to be a leader and influencer of this change.
Special thanks to Joyce Clear, Founder of Ports of Cause and Clear Yacht International, and Natalya Muravchik for their contributions to this article.
November 2015 / Cornerstone Journal of Sustainable Finance & BankingSM / 33
Sustainable Editorial Call to Responsibility: Salvage Our Most Valuable Natural Capital Asset
By Karen Sack, Managing Director, Ocean Unite
The ocean is the largest source of life on our planet. Covering 70% of the Earth’s surface, it provides food, water, employment, goods and services that are worth billions of dollars, relaxation, and even the air we breathe. Yet in return we have been abusing it, stripping it of fish, choking it with pollution and acidifying its waters. We now run the risk of destroying this most valuable natural capital asset – the very thing that makes Earth habitable.
The ocean impacts our lives on a daily basis, even for those of us living far away from its shores:
• ©Wolcott Henry / Ocean Unite The UN estimates that worldwide, fish provides about 3 billion people with almost 20% of their intake of animal protein, and 4.3 billion people with about 15% of such protein.
• Recent research has shown the ocean ecosystem would rate as the world’s 7th largest economy in terms of GDP for “goods and services” such as food, tourism, and shipping.
• The microscopic plants that live in the ocean are responsible for more than half the oxygen we breathe – every second breath that we take. As a natural carbon sink, the ocean absorbs approximately 25% of all the carbon dioxide emitted by human activities.
But we are spending down this natural capital at an alarming rate.
According to a 2014 UN report, 90% of fish stocks are either fully fished or overfished, and this negative trajectory persists. Meanwhile, increased greenhouse gas emissions have boosted ocean acidity by 30% since the beginning of the Industrial Revolution, altering seawater chemistry so that the rate of change is many times faster than anything experienced over the last 250 million years. This means that any living organism with a calcium structure (such as shells and coral reefs), many of which are indispensable to functioning ocean ecosystems worldwide, will have an increasingly hard time surviving. Then consider that the ocean is estimated to have absorbed about 90% of the atmosphere’s excess heat and that coral reefs could be destroyed by 2050, according to current predictions. Add these factors together and the medium- and longer-term outlook for the health of this critical Earth system is grim.
A rising tide of science and greater understanding of the role the ocean plays, both ecologically and economically, point the way towards what needs to be done to restore and protect it. However, there is still an unacceptable level of degradation. Many of these negative impacts take place out of sight, and so out of mind. A combination of individual action, government mandates and business leadership is now needed to reverse this sobering trend.
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We need to stop stripping the ocean of all the fish we can grab, and start thinking about where and how that fishing is being done, and what kinds of fish we take. This means governments adopting and implementing measures to end overfishing by setting catch limits that are based on science, rather than economics. Fishing needs to be practiced sustainably, taking into account impacts on the entire ecosystem rather than just the targeted fish stocks. Governance and accountability measures need to be strengthened. And subsidies that fund economically unviable operations and that promote overfishing or unsustainable fishing practices should be eliminated.
We need retailers to take responsibility for the chain of custody of the fish and seafood they sell, to ensure they are not selling fish that has been caught illegally or unsustainably. That means knowing where their fish is caught, which ports it has been through and ensuring that international labor standards are upheld throughout. The consumer also plays a key role in promoting a healthy ocean by choosing sustainable seafood options and demanding their retailers stock such options.
Responsibility also means not sourcing or selling endangered or vulnerable Karen Sack has over species, or facilitating their trade. Recent studies estimate that at least 100 20 years of experience million sharks are caught and killed each year, mostly for their fins, in leading efforts by major unregulated or illegal fisheries. Several airlines have committed not to ship international non- shark fin as cargo; now we need the big commercial shipping companies who governmental transport more than 80% of shark products to do the same. organizations to conserve and protect ocean We need to stop using as many plastics — particularly the single-use variety — life around the world. She and where it’s unavoidable, ensure they are re-used, recycled well without was one of the initiators of causing toxic emissions, and don’t end up in waterways and seas. We also need the Global Ocean to reduce pollution runoff from agricultural and other activities on land before Commission. life in the ocean suffocates.
Replenishing ocean life by creating the equivalent of national parks at sea (marine reserves or marine parks) will also be critical for a vibrant ocean, poverty alleviation and food security. Today less than 2% of the ocean is fully protected. Emerging science estimates that more than 30% should be safeguarded.
The cost of protecting 30% of the ocean has been estimated at roughly US$223-228 billion. This figure may sound high, but the financial returns are estimated to be far higher with benefits ranging from US$490 billion and 150,000 full-time jobs, to US$920 billion and over 180,000 jobs by 205011.
It is therefore essential that development models promote sustaining marine life, in particular the huge financial and environmental benefits that can be gained from long-term protection, rather than short-term extraction.
We can still restore the health of the ocean. We can rebuild and regenerate it. In fact, the ocean’s ability to replenish itself is amazing. Helping the ocean to
1 http://ivm.vu.nl/en/news-and-agenda/news/2015/Benefits-of-expanding-marine-protected-areas.asp
November 2015 / Cornerstone Journal of Sustainable Finance & BankingSM / 35
regenerate is beneficial for marine life and creates benefits beyond borders and across economies.
We may be able to trade and travel over a dead ocean; but we need a living ocean to drive that trade and to provide food, employment, water, air, tourism and inspiration.
Failure is not an option when there is so much at stake.
©Wolcott Henry / Ocean Unite
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Sustainable Editorial The Ocean and Us
By Kimberly Gladman, PhD, CFA, Managing Director for Research, the JUST Capital Foundation
©De Visu/ Crystal Graphics
In his poem “The Great Ocean,” published in 1950, these problems can seem overwhelming. But there are Chilean poet Pablo Neruda wrote of the “gifts and also inspiring efforts to preserve the marine destructions” of the sea. If just one of these were to be environment, such as oceanographer Sylvia Earle’s given “into my hand,” he went on, he would choose Mission Blue,1 which aims to create a global network “not the final breaker, heavy with brine, that thunders of “Hope Spots,” or protected areas covering 20% of onshore,” but “the inner spaces of force/the naked the world’s oceans by 2020. power of the waters/the immoveable solitude, brimming with lives.” More than half a century later, The ocean is a major economic force. Two- his words can inspire us to consider both the aspects thirds of global GDP is produced in the ocean coastal of Earth’s oceans that are most apparent to us land- zone, and in the US, coastal states account for over for dwellers, and those which, although perhaps equally 80% of GDP2. The risks of climate-change induced sea powerful, are more hidden from our view. level rise and increased storm incidence thus have clear economic and financial implications, which The environmental importance of the oceans many investors, corporations, and policy makers are is unparalleled. Many of us are acutely aware of beginning to address. the role of the ocean in shaping our atmosphere and weather, and alarmed about the ways that role is The ocean is a workplace. Industries directly changing due to human-produced greenhouse gas linked to the ocean itself, including tourism, fishing, emissions. We are aware of ocean acidification and extractives, provided more than 2.7 million US resulting from increased carbon dioxide absorption, jobs in 2010, and millions more around the world.3 as well as the pollution of the seas from our use of Offshore workers, including fishermen and oil rig agricultural chemicals and plastics. The scope of operators, may be exposed to serious safety risks
1 http://mission-blue.org/ 2 For global GDP figure, see the Center for a Blue Economy at http://www.miis.edu/giving/initiatives/center-blue-economy. For US figures, see the 2014 report from the National Ocean Economics Program at http://www.oceaneconomics.org/download/. 3 See http://www.oceaneconomics.org/download/
November 2015 / Cornerstone Journal of Sustainable Finance & BankingSM / 37
beyond the regular oversight of regulators. The both on earth and elsewhere in the universe. And the isolation of offshore work can also facilitate severe oceans are home to the cetaceans that science human rights violations, as recent reporting about increasingly suggests are most similar to us, in their forced labor in the Thai shrimp industry has shown. sophisticated use of language and their highly Increasingly, investors and corporations are exploring developed social organizations. Yet less than 5% of the ocean-based aspects of global supply chains, and the ocean has been explored4; it therefore represents seeking to protect the health, safety, and freedom of an immensely rich frontier for the further expansion workers within them. of human knowledge and imagination.
Oceans are political and military battlefields. In sum, when viewed from these many perspectives, Throughout human history, civilizations have fought the ocean is indeed, as Neruda wrote, “brimming with for control of key sea routes, ports, and fishing lives,” both human and not; and a space full of force grounds; in our own time, control of offshore oil and and power. gas resources has been an added source of conflict. China’s island-building in the disputed Spratly Consider it may even induce the sensation of limitless Islands of the South China Sea is just one dramatic connection that Sigmund Freud famously described recent example of power maneuvers at sea, and as “the oceanic feeling” central to religious experience. political considerations are likely to continue to For Freud, of course, that feeling, like all religion, was complicate global efforts to address the an illusion. But today, the oceanic links among environmental and economic challenges mentioned ecology and economics, society and science, may be above. intensely real.
Oceans hold history and knowledge of Kimberly Gladman, PhD, CFA, is Managing ourselves and the world. Scientists tell us that life Director for Research at the JUST Capital on earth began in the sea, and our own bodies carry Foundation. She serves on the UN-PRI Academic the evolutionary evidence of our aquatic origins. Network Steering Committee, the Research Advisory Discovery of the ecosystems surrounding deep-sea Committee of US-SIF, and the Global Advisory vents has demonstrated that complex food chains can Council of Cornerstone Capital. exist that are not based on photosynthesis, expanding our conception of the conditions necessary for life
4 http://oceanservice.noaa.gov/facts/exploration.html
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The Guardian: “An Entrepreneur without an Exit Strategy” – November 2015 http://www.theguardian.com/dnv-gl-partner-zone/2015/nov/09/an-entrepreneur-without-an-exit-strategy
Forbes: “Managing ‘Stakeholder Interaction’ For Better Business Strategy” – August 2015 http://www.forbes.com/sites/dinamedland/2015/08/16/managing-stakeholder-interaction-for-better-business-strategy/
The Economist: “Revisiting the Wealth of Nations: The Seas” by Erika Karp – March 2015 http://www.economistinsights.com/opinion/revisiting-wealth-nations-seas
Forbes: “The Power to Convene” by Erika Karp – December 2012 http://www.forbes.com/sites/85broads/2012/12/10/the-power-to-convene/
Forbes: “Sustainable Capitalism…If Not Now, Then When?” by Erika Karp – November 2012 http://www.forbes.com/sites/85broads/2012/11/08/sustainable-capitalism-if-not-now-then-when/
Forbes: “Could Sustainability by Unsustainable?” by Erika Karp – September 2012 http://www.forbes.com/sites/85broads/2012/09/26/could-sustainability-be- unsustainable/?utmsource=allactivity&utm_medium=rss&utm_campaign=20120926
Wharton Magazine: “The Clients of my Clients....Sustainable Selling” by Erika Karp – July 2012 whartonmagazine.com/blog/sustaining-selling-success/
Harvard Business Review | HBR Blog Network "Why Go it Alone in Community Development?" by Andrew MacLeod – June 2012 http://blogs.hbr.org/2012/06/why-go-it-alone-in-community-d/
Forbes: “Sustainable Investing and Moments of Truth” by Erika Karp – March 2012 http://www.forbes.com/sites/85broads/2012/03/28/sustainable-investing-and-moments-of-truth/
Forbes: “Superheroes of Capitalism” by Erika Karp – January 2012 http://www.forbes.com/sites/85broads/2012/01/13/superheroes-of-capitalism/
Forbes: “Superheroes of Capitalism: Part II - The Women” by Erika Karp – January 2012 http://www.forbes.com/sites/85broads/2012/02/01/superheroes-of-capitalism-part-ii-the-women/
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