A novel idea

For almost as long as there have been corporations, there have been aggrieved shareholders who sought to use whatever leverage they had to compel changes in corporate behavior.

Yet by 1991, the concept of harnessing the power of shareholders to nudge corporations into improving their environmental practices was in its infancy. The idea that an American nonprofit could start and run its own mutual fund company was completely new. And the notion that investors could – or would – prioritize their environmental values while saving for the future was untested.

That was the state of play when groups in The Public Interest Network started Green Century Capital Management.°  Since then, Green Century has grown into a leader in the environmentally and socially responsible investing field, providing mutual funds for individuals and institutions to keep their money out of what they believe are the most environmentally irresponsible industries.

Raising the standard

Since its founding in 1991, Green Century has raised the standard for environmentally responsible investing and, in so doing, for corporate behavior on the environment.

In 2014, the Green Century Funds became one of the first families of fossil fuel-free, diversified and environmentally responsible mutual funds, holding no investments in any company with proven carbon reserves; nor any company that explores for, extracts, processes, refines or transmits coal, oil or gas; nor any utility that burns fossil fuels to generate electricity. 

Green Century’s impact also includes its award-winning shareholder advocacy program, which works with more than 100 companies a year and has earned commitments by corporations to lower their carbon emissions, reduce their production of plastic, protect the world’s forests, limit food waste, stop the overuse of antibiotics in our food supply and more.

Putting the environment first, as Green Century does, shouldn’t be a niche investment strategy. Increasingly, it’s not. In 2021, Green Century hit a major milestone, with more than $1 billion in assets under management. And thanks in large part to the growing influence of Green Century’s approach, according to the U.S. Forum for Sustainable and Responsible Investing, the entire industry now has one in four dollars invested in strategies that take into consideration "ESG," or environmental, social and governance ratings. Just two years ago, that ratio was one in five dollars.

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A new forest predator

It’s late evening on the Indonesian island of Sumatra. In the high branches of an old fig tree, an orangutan looks after her slumbering infant, vigilant for the tigers that prowl these rainforests. 

The next morning, the mother and her baby are chased from their home — but it’s not a tiger they’re fleeing; it’s a bulldozer. Before long, their tree is reduced to ash, making way for rows and rows of palms that, one day, the fruit of which will be turned into the most widely used vegetable oil in the world: palm oil.

The palm oil problem

Palm oil is used to make everything from shampoo and lipstick to crackers and cookies. In Indonesia and Malaysia, where 85% of the world’s palm oil is produced, it’s also responsible for deforestation to make way for palm plantations. 

The clearing of their native forests deprives endangered species, such as the Sumatran orangutan and tiger, of critical habitat, and it damages the planet’s long-term health. Forests act as Earth’s lungs, sucking carbon out of the atmosphere, while also holding an estimated 45% of all carbon stored on land. In a one-two punch to the planet, clearing rainforests for palm plantations produces greenhouse gasses in its own right while depriving the planet of a crucial carbon sink.

In light of the ecological toll of palm oil production, advocates and activists have put that industry on notice. In the last several years, major players in the industry have responded by making commitments to sourcing their palm oil in more sustainable ways. This progress came about, in large part, because the shareholders of these companies — organized by Green Century Capital Management — have called for change. 

Explore an interactive timeline of shareholder advocacy milestones.

From Starbucks to Kellogg’s and beyond

In 2012, Green Century filed a shareholder proposal with Starbucks, urging the company to purchase palm oil only from sustainable producers. Coming out of negotiations with Green Century, the company published a commitment to sustainably source 100% of its palm oil by 2015. 

The Starbucks action set the stage for Green Century’s next challenge: to convince Wilmar International, the planet’s largest and most notorious palm oil producer, to change its practices. 

Green Century gained leverage with Wilmar through one of its major partners, Kellogg’s, of which Green Century is a long-term shareholder. In a fall 2013 investor call, Green Century asked Kellogg’s CEO John Bryant about his company’s partnership with Wilmar, which had  twice been ranked by Newsweek as the least sustainable of the world’s largest 500 corporations. A reporter on the call turned the question into a story, and the resulting national attention led Kellogg’s to urge change from Wilmar.

Commitments won across the industry

Growing media coverage earned Wilmar’s attention, but still the company wouldn’t budge. Then, Green Century organized 40 investors, representing over $270 billion in assets under management, to urge Wilmar to act. 

On Jan. 30, 2014, Wilmar, under pressure in the boardroom as well as in the press, committed to ending deforestation in its supply chain. Kellogg’s followed suit two weeks later, as did many others throughout the industry. 

In the words of Glenn Hurowitz of Climate Advisers, who helped negotiate Wilmar’s commitment, “Advocates and activists had been trying for years to get the attention of CEOs to address Wilmar’s ties to deforestation, but Green Century did it in just a few hours. When Green Century speaks for the planet, CEOs listen.”

Green Century has worked with companies to adopt zero-deforestation commitments from growers, suppliers and buyers of palm oil since 2012. During that time the percentage of the industry covered by these agreements rose from 5% to 83%.  

Green Century has also built on this work to protect the forests in Latin America, especially Brazil, where forests are burned to make way for soy plantations and cattle producers. Already, Green Century has won commitments from ADM and Bunge, two of the world’s four largest grain traders to protect these forests and started a campaign that convinced JPMorgan to be the first U.S. bank to require that palm oil companies to which it provides loans adopt best practice no-deforestation policies. 

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Welcome to planet plastic

Imagine you’re thirsty for a soda. The soda you find in almost any store almost certainly comes in a plastic bottle. If you buy a six-pack, the plastic bottles come bound together with plastic rings. Buy in even greater volume, and the plastic bottles come in a plastic-wrapped case. 

One way or another, there’s no small amount of fossil-fuel-based resin between you and your refreshing drink. Welcome to planet plastic.

Plastic, of course, has its advantages. It’s cheaper, lighter and both more malleable and more durable than other materials. One big downside: It sticks around in the environment forever.

Of the 9 billion tons of plastic produced in the world since the 1950s, 7 billion tons of it have ended up as trash. The United States alone throws out enough plastic waste to fill 1.5 football stadiums every day, as evidenced by the plastic that finds its way in increasing volumes into our rivers and oceans and harms wildlife. And it’s not going away. Plastic has existed in such quantities on our planet for only decades. Scientists estimate that, while plastic breaks down into smaller pieces over time, it lasts in the environment for centuries, if not longer.

Turning off the tap

On the shareholder advocacy front, Green Century has taken an approach similar to that of other Public Interest Network groups: When your bathtub is overflowing, the first thing you do is turn off the tap. Now that our planet is being overwhelmed by plastic, the first thing we should do is get corporations — including the world’s largest source of plastic pollution — to stop making so much of the stuff.

For the past several years, teams of volunteers with the non-profit Break Free From Plastic have undertaken an informal audit of plastic pollution. Once a year, they scour beaches around the globe. For four years in a row, with all the trash they could find sorted and tallied, the non-profit singled out one corporation -- the Coca-Cola Company -- as the world’s No. 1 plastic polluter.

Not surprisingly, Coca-Cola is one of the world’s largest users of plastic resin.

The exponential growth of disposable plastic has had a terrible impact on our planet, particularly our oceans and marine wildlife. Experts estimate that approximately 11 million metric tons of plastic pollution entered the ocean in 2016, and this number is expected to grow to 29 million by 2040, unless concerted efforts are made to reduce plastic use and leakage.

Coca-Cola commits to change

But after years of facing public scrutiny for its plastic problem, on Feb. 10, 2021, Coca-Cola committed to change. 

In late 2020, after Coke again was named as the world’s worst plastic polluter and the company was facing growing criticism for its role in the plastic pollution problem, Green Century started to work on plastic pollution. 

Given the public spotlight on Coca-Cola, any change at the company would signal other companies that they too should address this issue. Green Century reached out to Coca-Cola, urging major cuts to its plastic pollution; submitted a shareholder proposal, urging the company to address its use of plastics; and met company executives to explain the potential reputational risks the company faced. 

Not long afterward, the company addressed the problem Green Century raised, agreeing to set a new goal to reduce its use of virgin plastics. In 2019, it reported using about 3 million metric tons of plastic packaging per year, which is the equivalent of making 200,000 plastic bottles per minute.

Green Century President Leslie Samuelrich congratulated the company, but added, “It is vital that Coca-Cola adopt even more transformative measures to reduce its outsized contribution to the world’s plastic pollution epidemic.” 

Exactly a year later, Coca-Cola announced a second initiative, setting a goal of distributing at least 25% of all its beverages sold globally in refillable or returnable containers by 2030 – the first known goal of its kind. Again, the announcement came after Green Century filed a shareholder proposal urging the company to reduce its reliance on single-use plastic. “Refillables are the future, and this is an important step for the company and the planet,” stated Samuelrich.

Coke hasn’t been the only company moving to reduce its plastic in response to shareholder action. Since the fall of 2020, Green Century has secured 12 significant victories on plastics with major corporations. This list includes wins with Target,* Choice Hotels,* Tyson Foods,* Jack in the Box* and Office Depot.* Together, these wins will prevent millions of tons of plastics from entering circulation in the coming years.

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An ‘all hands on deck’ challenge

Each new United Nations report on the growing peril of climate change underlines the challenge humanity faces in transitioning to a zero-carbon world. Advocates, as well as political, business and civic leaders, must use every tool at our disposal to curb climate-changing emissions as swiftly as possible.

Just to add a few degrees of difficulty to this already daunting challenge, climate pollution isn’t limited to the most obvious sources, such as smokestacks and motor vehicle tailpipes. In a global economy still largely powered by the burning of oil, gas and coal, virtually every step in production, distribution, consumption and disposal of goods and many services adds more greenhouse gases to the Earth’s atmosphere.   

A Pepsi challenge

An example of system-wide emissions can be found in the operations of PepsiCo Inc. 

The first and most important thing to remember when tabulating Pepsi’s greenhouse gas footprint is that the pollution doesn’t just come from the factories where Pepsi’s products are made. 

Carbon is emitted when making the corn syrup that flavors the drink, and more carbon is emitted transporting the syrup to the factories. Transporting and distributing sodas to the stores where they’re sold means even more trucks belching even more greenhouse gases to move the cola and keep it cold. At every stage of the production process, at every level of the supply chain, Pepsi products produce climate pollution.

So when Green Century started targeting companies, including PepsiCo, to cut down on their emissions, it took aim at emissions up and down the whole production line. 

On Oct. 31, 2014, after almost a year of discussions, Green Century announced that PepsiCo had agreed to launch new initiatives to curb its climate-changing emissions. The company committed to reduce fuel consumption in its trucking fleet, work with low-carbon suppliers, and cut from its supply chains oil that had been procured using the ultra-destructive method of tar sands extraction.

Leading the way for corporate change

Pepsi isn’t the only company feeling the heat of Green Century’s advocacy. 

On March 4, 2019, Amazon.com, Inc. announced a new carbon-reduction initiative. The action came after Green Century filed a shareholder proposal with the firm. 

On Jan. 20, 2022, nearly 70% of Costco Wholesale Corporation shareholders voted in favor of a Green Century shareholder proposal asking the company to set targets to reduce climate emissions across all its operations and products. 

“With this vote, investors demonstrated they expect Costco to align with its peers by accelerating work to reduce the climate impact of its supply chains and raising the level of ambition of its emissions reduction goals,” said Leslie Samuelrich.

As advocates and activists continue to push for action on climate at all levels, the power of shareholders has opened new fronts in the effort to transition to a zero-carbon global economy.

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