Calvert: Letter to Stakeholders




Calvert Investments                                                             July 26, 2012

Letter to the Shareholders


Here at Calvert we have been working alongside CERES, IRC, PepsiCo and Two Tomorrows on this stakeholder engagement for quite a few months now.  It has been a journey to say the least, but we believe we have made real progress and look forward to our future relationship with all parties involved.  We are also excited about the collaboration which has taken place over these months in coming to a unified understanding of what is means for PepsiCo to have sustainable operations in India with regards to water use, community involvement, and detailed reporting for their shareholders and stakeholders.

We have agreed that there will be further testing and analysis performed on a site-by-site basis helping us understand the needs of that particular community where PepsiCo is operating.  We have also agreed that PepsiCo will continue with their Positive Water Balance initiative and is even considering incorporating their supply-chain into this definition in the future.

One of the great outcomes of this engagement, is that PepsiCo has agreed to using a different system of analyzing their water use and consumption at each site in India, all 39.  They have agreed to use the Corporate Water Gauge, developed by Mark McElroy Ph.D. of the Center for Sustainable Organizations, as a tool to help them to understand their impact in this region.  This water gauge utilizes GIS mapping systems to fully understand the amount of water in any given location, the amounts of precipitation received at that location, the total population for this location, and the amounts of available water resources.  This tool will help PepsiCo define the thresholds of water available at each site, helping them to better understand their impact on that specific community.  They will also incorporate the CERES Aqua Gauge in conjunction with the Corporate Water Gauge to ensure a complete and detailed report of their impact in their India operations.

Because they will be using a context-based approach, they will be better able to report to their shareholders and stakeholders their impact in this region and develop a better relationship with the local community by understanding their impact.  The information gathered will also help PepsiCo train employees on the importance of water as a resource for the community rather than just for their beverage production.  Information gathered would also help PepsiCo know how much water they will need to re-charge back into the watersheds to ensure they are complying with their Positive Water Balance.   In short, PepsiCo has set the bar for what similar companies should be doing; the need for context-based reporting is imperative as it helps a company fully understand their sustainability impact because they will have established thresholds to compare their results against.

In consideration of these initiatives that PepsiCo is taking, we at Calvert are pleased to present a pilot program or fund project, which will take into account context-based reporting as a criteria for participation in this new fund.  We will be calling the fund our, Context-Based Strategies.  Along with this letter to the shareholders and press release, we will survey our shareholders and various companies we currently do business with to determine how much interest there is in such a fund.

Following along suit with our current strategies, our Context-Based Strategy will have it’s own set of guidelines and criteria required as well as those standards set in the SAGE Strategies funds.  We will be employing other works developed by Dr. McElroy such as the True Sustainability Index and the GHG Emissions Gauge, which will help companies and us as a whole, better understand the impact they are having via ESG metrics.  Keep in mind, that this is just a pilot program, but we are happy to announce that PepsiCo is leading the way for such a fund and feel strong that other’s will soon follow as the importance of context-based reporting is growing to be crucial to our world’s future in the market place.

We look forward to what the future holds and are attempting to be at the head of the pack in discovering how we can impact these sorts of changes.  There is much work to be done yet, but this is a giant step in the right direction.  Through the collective efforts of PepsiCo, IRC, Two Tomorrows, and CERES, we will be impacting change in a great way which will set an example for what needs to happen in the future; that is by working together in a unified manner.  I am optimistic about the changes we can make to pave the way for a bright future for generations to come, ensuring our world’s sustainability!




Cody Durant

Calvert Investments


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