Valdez Principles

In March of 1989, the Exxon Valdez ran aground in Prince William Sound in Alaska, spilling 11 million gal (41 million L) of crude oil. During the international outcry over the environmental consequences of the spill, environmentalists criticized a number of the structural features of the petroleum industry and the operational practices of the super-tanker transport of oil.

In this climate, new approaches were suggested to motivate not only oil companies but all industries to support the protection of the environment . The Valdez Principles are perhaps the most important of the approaches suggested during this period. They were developed by the Coalition for Environmentally Responsible Economics (CERES), which was a consortium of 14 environmental groups and the Social Investment Forum, an organization of 325 socially concerned bankers, investors, and brokers. CERES was founded by Boston money manager Joan Bavaria, and it has the support of several major environmental groups, including the Sierra Club and the National Wildlife Federation .

The Valdez Principles were modelled on the Sullivan Principles, which had been developed to discourage investment in South Africa as a protest against apartheid. Members of CERES controlled $150 billion in both pension and mutual funds. The goal of the Valdez Principles was to reward the behavior that was environmentally sound and punish behavior that was not by investing or withholding funds controlled by CERES members. Corporations were also asked to sign the Valdez Principles in the hopes that the financial incentives provided by CERES would encourage companies to develop environmentally sound practices.

The Valdez Principles support a wide range of environmental issues. Protection of the biosphere is one of its objectives, and it encourages industries to minimize or eliminate the emission of pollutants. The principles are also devoted to protecting biodiversity and insuring the sustainable development of land, water, forests, and other natural resources . The principles advocate the use of recycling whenever possible, support safe disposal methods, and encourage the use of safe and sustainable energy sources. Energy efficiency is also a goal, as well as the marketing of products that have minimal environmental impact. The principles also call for corporations to have at least one board member qualified to represent environmental interests and a senior executive responsible for environmental affairs. Other goals include damage compensation, disclosure of accidents and hazards, and the creation of independent environmental audit procedures. Many major corporations have indicated an interest in these principles, but few have signed them. Some executives have observed that many aspects of the Valdez Principles are already required by government regulations and internal policies.

Perhaps then the most significant feature of the Valdez Principles is not what they have accomplished but the circumstances of their origin. A major disaster often engenders a social and political climate that is, at least temporarily, receptive to reform. In this case it was a rare coalition between financial investors and environmental groups. Many have argued that the principles had unrealistic goals, but some see in their development hope for the future.

[Usha Vedagiri and Douglas Smith ]

RESOURCES

PERIODICALS

Ohnuma, K. "Missed Manners." Sierra 75 (March-April 1990): 24–26.

"The Valdez Principles." Audubon 91 (November 1989): 6.