Katrina Business Guidelines for Responsible Rebuilding

We are deeply saddened by the human tragedy caused by Hurricane Katrina.  We understand the need for immediate action to rebuild this devastated area.  We also believe that any rebuilding or new beginning must be based on core values that have long been at the heart of American society: justice, fairness, equal opportunity, and a respect for laws created through the American democratic process. 

The rebuilding of New Orleans, and the broader Gulf Coast region, represents an extraordinary chance to create what should and can be a 'model city' honoring the best of what America can be, drawing on the latest advances in technology, ecological design, and planning for community needs.  With the combined generosity, vision, and dedication of government, corporations, the non-profit community, and individuals working hand in hand, we can make this city an inspiration for the world in this 21st Century. Companies in particular have a vital role to play in the rebuilding effort, harnessing their imagination, creativity, skills, and energy to rebuild in a fair and sustainable manner that creates local jobs for local people.

As investors, we believe it is important to ensure that corporations act responsibly during this challenging time, with commitments to communities, workers, and the environment.  We seek longer-term, sustainable solutions that will last well after the immediate crisis has passed.  Specifically, we ask that companies adhere to the following general principles as they conduct their rebuilding operations in the wake of Katrina:

1. Rebuild on a Foundation of Fairness, Justice, and Opportunity. In response the massive destruction left by Katrina, certain environmental and workplace regulations have been set aside or pushed back, threatening our common societal commitment to fairness, equality, and environmental protection.  For example:
   1. The Department of Labor suspended Executive Order 11246 for new government contractors assisting the rebuilding effort, thus temporarily removing affirmative action requirements.
   2. The Federal Government suspended-for over two months-Davis-Bacon Act requirements for federal contractors involved in the rebuilding to pay workers the prevailing local wage.  Notably, prevailing local wages in the New Orleans area are already below the national average; further suppression could result in deepening poverty in an already beleaguered area.
   3. The Environmental Protection Agency waived fuel refining and emissions standards ostensibly to help avoid fuel shortages, but many of the waivers, originally intended to be short-term, were extended.  If these short-term measures persist into the future, we will see even greater damage from increased emissions of air and water pollutants-in a city where floodwaters were so polluted by fuel and industrial pollutants that residents and rescuers alike were urged to avoid contact with the water.

   These precedents concern us under any circumstance.  We believe that we can't go backwards in order to go forward.  We also need to be particularly sensitive to needs of the most marginalized-the poorest and largely people of color-who were the ones most impacted by the devastation of this storm.

   Whatever the administration and Congress do, we believe that well-governed and responsible corporations will remain dedicated to fair business practices.  Specifically, we seek a commitment from companies involved in the rebuilding to:

   • Respect and embrace environmental regulations and the principles of pollution prevention and low impact in urban planning and design.
   • Uphold the aspiration for inclusion in procurement, employment, and affirmative action.
   • Pay the prevailing local wage.
   • Provide safe and healthy workplaces.
   • Engage in transparent and fair bidding for government reconstruction contracts.
   • Refrain from taking advantage of this tragedy through unfair business practices such as predatory lending and price-gouging.
   • Partner with local nonprofit agencies that represent the interests of the region's most marginalized citizens, to develop visions, strategies, and actions to assure that the folks who were left behind become full participants and beneficiaries in the rebuilding. Consider a focus on education for the future.
     
     
2. Invest in Communities. We have seen a generous outpouring by Americans of money, time, and resources to help address the many needs of Katrina victims.  We applaud these efforts.  We also strongly believe that positive long-term impact in these areas will be predicated on the degree to which there is proactive investment in devastated communities.  As socially responsible investors, many of us already are expanding our investments in credit unions, community development financial institutions (CDFIs), and community investment notes to direct capital to underserved communities.  We urge business to similarly commit to investments for small business loans, home mortgages, and community organizations in the impacted areas.  In addition, we believe businesses must work to create local jobs for local people and that there should be preferences for bidders who provide such opportunities.  We seek a commitment from companies to:
   • Participate in community investment products that provide capital to the region, in addition to philanthropy.
   • Encourage employees to become involved in community development efforts, through volunteering, giving, and investing.
   • Look for opportunities to bring new business to the area.
   • Work to create local jobs that benefit local people, many of whom need help to come home.
   
   
3. Build for Sustainability Much of the Gulf area will be built from scratch. This is as much an opportunity as a challenge. Given time and resource constraints, we urge businesses to incorporate new lessons of sustainable design (including LEED certified buildings) into the rebuilding effort in order to address environmental concerns.  We seek a commitment from companies to:
   • Seize opportunities to minimize waste and pollution.
   • Site new facilities with consideration for the health and safety of surrounding communities, insuring that race or income do not play a factor in increased relative exposure.
   • Incorporate "Design for Environment" elements into any new building, including energy efficient heating and cooling systems, insulation, and building amenities.
   • Support viable alternative public transportation options and renewable energy sources that would reduce dependence on fossil fuels and their attendant air pollutant and greenhouse gas emissions.
   • Encourage long-term planning solutions that balance concerns about vulnerability to flooding with impacts on fragile coastal ecosystems. Support investment in environmental restoration.
     
     
4. Manage Corporate Responsibility Risk No company can be prepared for every contingency. However, we find that companies that attempt to incorporate corporate responsibility into their overall governance structure are better positioned to manage risk over the long term. We support commitments from companies to:
   • Establish board-level responsibility for social and environmental issues.
   • Integrate corporate responsibility policies and practices into everyday business.
   • Tie management compensation to achieving environmental, diversity, and other workplace goals.
   • Assign responsibility at a line level to deal with social and environmental issues.
   • Cooperate in programs that go beyond compliance to address climate change.

Conclusion
We understand that focusing on corporate performance is just one of many issues during this trying time.  But we believe it is our unique responsibility as investors to encourage companies to rebuild based on fair and sustainable business practices.  We are optimistic that business will rise to this challenge, and that by working together as investors, companies, government, non-profits, and citizens we truly can achieve a 'model city' representing the best of what America can be.