Tuesday, April 1, 2003
New York Hilton Hotel
(prepared for delivery)

Thank you, Norman, for that warm introduction.

I would like to begin my remarks by acknowledging the unique and increasingly important role that CERES plays in the global community. It provides an essential forum in which diverse and, at times, divergent and even adversarial interests can engage in collaborative dialogue and find common ground on critical issues.

The New York City Comptroller's Office has been an active and enthusiastic member of CERES from its inception in 1989. Like each of my predecessors, I am proud to be a member of the CERES board. I am committed to building on this strong legacy of support for the CERES mission.

CERES is a critical tool for institutional investors who seek ways to help stabilize an increasingly volatile world. It does this by showing us how to encourage corporations to acknowledge the myriad effects their behavior has on the social, political and physical environment, and to thus behave in a way that respects that environment. This effort is now more important than ever.

The CERES message is rapidly gaining acceptance. More and more of the players who shape the global business and financial landscape -- large investors and foundations, environmental and public interest organizations, big corporations and small businesses - have endorsed the CERES Principles.

The cascading corporate scandals of the last year or so have illustrated in stark detail what can happen when the mechanisms meant to ensure good corporate citizenship fail. As a fiduciary of and chief investment advisor to the New York City pension funds, I am acutely aware of the damage these failures have inflicted on our investment portfolios.

Thanks to these scandals, however, we have arrived at a turning point in the movement toward crucial reforms in how America's public corporations govern themselves.

With the passage of the Sarbanes/Oxley Act, Congress enacted into law large parts of the corporate governance reform for which shareholder rights activists have long fought. This represents a watershed for shareholder rights, and I applaud the Congress for its good work. The New York City Comptroller's office, along with the trustees of the New York City public pension funds, have long been leaders in the fight for shareholder rights. I will continue the fight for strengthening corporate governance on a variety of different fronts.

In fact, I believe the time has come to take a broader view of what we now call "corporate governance." We must recognize that a company's conduct with regard to areas such as the environment and human rights is just as significant in evaluating overall corporate governance as the independence of board audit committees and executive compensation.
Corporate irresponsibility of any kind poses risks for the health and the stability of public companies and their shareholders.
There is a simple but persuasive logic to this broader approach. Attempting to encourage the companies in which we invest to build long-term shareholder value by including in their business plans responsible economic, environmental and social behavior - the sustainability business model - is a wise and prudent course of action.

Last April, CERES joined forces with the United Nations Environment Program in launching the Global Reporting Initiative. The GRI's core mission is to establish the foundation for "standardized corporate sustainability reporting" worldwide.

Corporate sustainability reporting encourages corporations to disclose to investors a "triple bottom line" that measures economic responsibility, environmental responsibility and social responsibility.

Economic responsibility includes everything from wages and benefits, labor productivity and job creation to financial information. Environmental responsibility includes the impacts of corporate behavior on air, water, land, bio-diversity and human health. Social responsibility includes workplace health and safety, employee retention, labor rights, human rights, and wages, as well as working conditions at out-sourced operations.

Our reasons are as practical as they are idealistic. Simply put, the long-term viability of the companies we own is crucial to our own stability, because we are long-term investors.

Companies that behave in a way that is at odds with the greater good of society do so not at their own risk - they do so at our risk as investors.

Divestiture is simply not a sustainable strategy over the long haul. That is why we must find ways to encourage good corporate citizenship. I am convinced that pushing for sustainability will yield tangible dividends for investors over time.

There is ample evidence to suggest that companies that use this approach are more successful than those that do not. For example, companies that emphasize corporate sustainability saw their shareholder returns outperform those that do not by between 1.8 percent and 4.4 percent, according to a recent report distributed by CERES called Value at Risk: Climate Change and the Future of Governance. If you have not yet read this report, I would urge you to do so.

We are not just talking the talk; we are walking the walk. The New York City Comptroller's office, along with the trustees of the city pension funds, has long been a leader in this area, and this year, we are continuing our efforts.

The GRI Sustainability Reporting Guidelines offer the world the first framework of a generally accepted standard for corporate social responsibility reporting. The New York City pension funds have joined other large investors in submitting shareholder proposals to nine companies that would require the companies to report to shareholders what progress they have made in their sustainable development. Our efforts are already proving fruitful. Dell Computer, IBM, Intel, McDonald's Corp. and Pepsico have each agreed to comply with, to varying extents, the Sustainability Reporting Guidelines.

In particular, the elements of these guidelines that address global warming and climate change are especially important. It is becoming increasingly clear that changes in the earth's climate pose a very real threat to the companies that we own - and therefore pose a threat to those we serve as fiduciaries.

In fact, global warming will likely result in billions and billions of dollars in losses for public companies, according to that same report I cited earlier. In the year 2000, for example, extreme weather events resulting from changes in the climate caused 100 billion dollars worth of damage to the public and private sectors. The risks to our investments are real, and they are growing.

As investors, we have a role to play here. I would urge you, if you have not done so already, to begin educating yourselves on these issues. Assess just how exposed your portfolios are to the some of the risks I have outlined. Demand from the companies in which you invest that they disclose the climate risks to which they remain vulnerable.

As the owners of these companies, we must take the long view, even if - and especially when -- management does not.

By pushing corporations to disclose and measure their progress in each of these areas, I believe we can encourage them to improve their behavior in each category over time, and help to improve both their long-term viability and profitability. This conference will afford you an invaluable opportunity to learn more about some of the topics I have touched on. Later today, we will unveil the next step forward in our fight on these issues.

I am certain that at the close of this conference, you will share our common agenda -- a firm commitment to action.