10) ESG Flashcards
what is stakeholder mgmt?
the foundation for ESG – org must manage its relations with stakeholders in an action-oriented way
what is Freeman’s theory on stakeholder mgmt?
it would be impossible to satisfy all stakeholders and it would take over their core processes/aim as a company
what are the key primary stakeholders?
those who are directly affected by the actions of the company
what is stakeholder inclusivity?
- an org considering the needs, interests and expectations of all material stakeholders in the execution of its duties
- focus on value creation not profit creation
how can an org include stakeholder inclusivity into their value creation journey?
- balance their goals w stakeholder expectations
- establish accountability
- develop relationships based on trust and integrity
what is the resource-based theory?
companies are dependent on resources for them to be sustainable and operate in the world to ensure they have a comp adv
what do competitive adv and resources assist with?
creating entry barriers to the industry
what are the attributes of resources which create a comp adv?
- valuable, not substitutable
- rare and specific
- difficult to replicate
what is the overall goal of ESG?
sustainability
what are the ESG focuses for society?
- standard of living
- education
- jobs
what are the ESG focuses for economy?
- growth
- profit
- cost saving
what are the ESG focuses for environment?
- nat resource use
- pollution prevention
- biodiversity
what are the ESG focuses for socio-economics?
- business ethics
- fair trade
- worker benefits
what are the ESG focuses for socio-env?
- env justice
- conservation
what are the ESG focuses for env-economic?
- energy efficiency
- renewable fuels
- green tech
how can ESG help during a financial crisis?
can mitigate financial risk
what are some of the issues with ESG?
1) transparency and measurement issues
2) issues with ranking
3) unsatisfactory balances
what is greenwashing?
when a company claims to be environmentally conscious for marketing purposes but actually isn’t making any notable sustainability efforts
what about ESG can be advantageous to a company?
- cost saving
- energy saving
- reducing pollution
what is circular economy?
where a company minimizes wastage by putting its outputs back into the company or reusing its output
what is social decay?
when a company acts like they have the SHs best interests in mind, but ultimately only focus on making a profit
between whom can agency conflicts occur?
- maj and min SH
- managers and SH
- entity vs other stakeholders
what occurs in an agency relationship?
fiduciary relationship where the agent has dec-mak authority to perform services on behalf of the principal
what can be used to achieve goal congruence between principals and agents?
governance mechanisms
