THE REACTION: The vote was met with great appeal from large institutional investors and environmentalists who have been petitioning the SEC for several years to require an increase in such transparency. Anne Stausboll, CEO of pension fund CalPERS said:

“Investors have a fundamental right to know which companies are well positioned for the future and which are not.”

Some speculation by DailyFinance’s Zac Bissonnette and The Wall Street Journal’s Kara Scannell and Siobhan Hughes have deemed the SEC’s ruling as political feuding and a terrible waste of time, while Triple Pundit touts the vote as a hard fought victory for investors. Reuters and other news stations have been covering the petitions initiated during the George W. Bush administration.

WHAT’S NEXT? With this new information being published and discussed by corporations, look for a shift of investments towards companies with better environmental performance – and away from those with lesser eco-results. Large institutional investor petitioned for this SEC ruling, so do not be surprised when they shift their portfolios based on increasing disclosure about risks – and opportunities.

What do you think?  Reply below:

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In this series, which you can finish in less than one business quarter, learn from the sustainability experts already realizing Human Impact + Profit in business and industry. 

HIP’s CEO R. Paul Herman will lead the Feb. 5 session on managing your organization to be more HIP – and the dashboards and metrics you can use to create Human Impact + Profit for customers, employees and suppliers – while creating shareholder value for your investors.

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“With carbon cap-and-trade legislation before Congress and increasing pressure from shareholders, US companies know they’ll have to deal with their greenhouse gas emissions, or carbon footprint, and many are jumping the gun to change their carbon liability into an asset.

“The best-managed companies are evaluating their carbon footprint,” says R. Paul Herman, founder and CEO of HIP Investor Inc., a Californian investment advisory firm that has created two sustainability indexes tracking the S&P 100 and S&P 500 constituent companies. “And they’re managing it lower to save energy and costs, reduce their future volatility of materials costs, mitigate potential environmental liabilities, and create new competitive advantages.”

Getting a handle on these emissions, however, takes work. …

CLICK HERE TO READ THE FULL FEATURE

500 venture capitalists, investors and corporate buyers are expected to attend AlwaysON’s Venture Summit in Silicon Valley.  More than 100 private companies will pitch for 6 minutes to connect with investors and partners.

HIP’s CEO R. Paul Herman will join a panel session on the morning of Weds., Dec. 9,  on how to realize more Human Impact + Profit in these ventures, in corporate venture portfolios and in the investment world overall.

Why I Went Social — And How You Can Too
As the VC Sector Enters a Post-Crisis Shakeout, Will Social Venture Investing Offer an Alternate Risk/Return Model (and help save the world)?
Moderator: Arden Pennell, VC Editor, AlwaysOn
Kevin Jones, Founding Principal, Good Capital
Nancy Pfund, Managing Partner, Double Bottom Line Investors
R.  Paul Herman, CEO, HIP Investor

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WHERE IS THE PROFIT IN CARBON-EFFICIENT SUPPLY CHAINS?

By Thera Kalmijn of Sure Ground Consulting & R. Paul Herman of HIP Investor Inc.

Would your CEO or CFO want to know if up to 117% of profits were at risk? In other words, a profitable company would erase all profits? If yes, you may want to make sure you are paying attention to Copenhagen’s meetings on climate change.

The potential regulation and cap and trade systems are important issues, particularly in carbon-intensive industries where TruCost estimates carbon cost earnings (EBITDA) impacts of 2% to 117% for utilities, and 1% to 10% for less carbon-intensive industries1. However, those who are focusing only on strategies that will just meet regulatory requirements are missing the boat. Forward-thinking companies are seizing the opportunity created by the environmental crisis to shake costs not only out of their operations, but also out of supply chains. … 

 READ THE FULL ARTICLE HERE

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 The second installment in our “How to Profit from Sustainability” webinar series will look at the strategic power of supply chain carbon metrics.  Join us for a discussion with Chris Erickson, CEO of Climate Earth, on why carbon accounting is the key to reducing fossil fuel dependency and increasing long-term, stable profits. 

 The new Corporate Webinar Series, co-produced by HIP Investor Inc. and SureGround,  ”How to Profit From Sustainability” can help you satisfy customers, comply with suppliers like Walmart, engage employees and increase profits.

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At the Opportunity Collaboration in mid-October 2009 in Mexico, organized by MicroCredit Enterprises, the topic of measuring impact was a top discussion topic and desire in many conversations. (UPDATE: The Investors’ Circle conference in DC also had an intense workshop on Metrics faciliated by Suzanne Biegel and Shaula Massena.  Additional conferences – Social Capital Markets and Net Impact - have filled the room with interest in human-impact metrics.)

Several attendees requested that HIP Investor synthesize the core insights, tools and methodologies that we have seen so far – and how they might be of use:

1. First, understand the distinctions among Inputs, Process and Results. An input counts how many applications for a micro-loan there are. The process would count how long that process took, and the rate of acceptance. The result of a successful micro-loan would range from re-payment to the benefits of that investment, like educated children or funds for purchasing health or water. Organizations that measure results tend to be the most successful – as they align their select highly targeted strategies and align their resources against them. They might also measure processes and inputs, but only if contributing to maximizing the result.

2. Next, determine what and how aggressively you want to measure. You can go as shallow or deep as you like. Determine how meaningful it is to do so. If you make decisions by intuition, the metrics might be less helpful. Not everything that is measurable is meaningful – at most choose five metrics (the number of fingers on your hand). But if you are deciding among multiple choices with scarce resources, metrics help to identify aspects that best connect with your goals – whether as an organization or an investor (or donor).

3. A range of measurement frameworks exist to learn from, and provide a starting place to build a template:

• Ashoka asks three core questions: How many Ashoka Fellows changed government policy in five years? 50% typically. How many Fellows were replicated by another program in five years? 90% on average. How many people were impacted? This varies by field, and ranges from thousands to millions depending on the topic.
• The Human Development Index by the United Nations covers social, environmental and economic indicators, and rates most of the 200 countries worldwide. These metrics, covering infant mortality, literacy and gender equality, also track year over year performance.
• The Gross National Happiness approach of Bhutan looks at 72 indicators, including how people used the last 24 hours in terms of time. These compile the core “pillars” and go beyond traditional GDP as a measure of success. France is now evaluating how they can do the same with Nobel laureates Joseph Stiglitz and Amartya Sen.
• The Balanced Scorecard is used in business and tracks four categories: customers, operations (including employees), learning and financial metrics. It is used by many large companies as a more comprehensive view.
• The Global Social Venture Competition (GSVC) includes a Social Return on Investment analysis as part of its evaluation for business plans. World of Good won both the GSVC grand prize and SROI prize in 2004. Businesses select the 3 metrics that best drive their venture.
• SVT Group has cataloged more than 30 approaches in a PDF guide, and describes what they are, how they work, how many resources and time commitments are required, and where they have been used.
• Grameen Bank has a set of questions that frame how microfinance families improve their lives.
• The HIP Scorecard. has a comprehensive look at five categories – Health, Wealth, Earth, Equality and Trust – based on Maslow’s hierarchy of needs and the UN Human Development Index. HIP has adapted it to publicly listed companies. The HIP 100 Index (and the HIP 500 Index) tend to beat the S&P by integrating these quantifiable human impact factors – and how they drive profit for corporations.

4. Seek out benchmarks to compare against. The U.N. Human Development Index tracks many categories of metrics at the country level over multiple years. Consider how your organization’s metrics might fit those – and demonstrate how it’s more comprehensive, more efficient or faster momentum of improvement.

5. Start a pilot of metrics that seem right for your mission and goals. Don’t overcomplicate it. Go with one, two, or even five metrics (no more than one hand!) – and track the impact you are creating. Compare it to the investment currency – and calculate a ratio. See how that ratio changes by day, month, quarter or year. Then, evolve your approach to use it as a great management and evaluation tool.

For more information, feel free to contact us (Paul @ HIPinvestor.com) – HIP has helped Walmart develop its Sustainability Index and scorecard, advised NIKE on the development of its Green Exchange (GX) and has applied the HIP Scorecard to the entire S&P 500, resulting in HIP Portfolios for investors.  HIP can help your portfolio, your company and your world.

What’s your experience? What other models or frameworks would you suggest?  Post your ideas and links below: