Ch 5 - ESG Flashcards
What is included in Carroll’s CSR pyramid?
economic, legal, ethical, and philanthropic responsibilities.
- Environmental is included in ETHICAL but is not a separate responsibility in this framework.
What is the “triple bottom line?”
Companies should focus on the triple bottom line: profit, people, and the planet
instead of one bottom line: profit/net income
Which of the three components of the triple bottom line are difficult to measure (2)?
- People
- Plant
most difficult to measure and compare between one company and another.
What is a provision?
(will happen)
- a liability with uncertainty about the timing of the amount of future expenditure required.
- If reliable estimates can be made, provisions should be RECORDED as LIABILITIES on the company’s financial statements.
When must a provision be recognized?
- An entity has a present obligation as a result of a past event;
- It is probably the outflow of resources (e.g. cash) will be required to settle the obligation; and
- A reliable estimate can be made to understand the amount of the obligation
What happens if the conditions for a provision are not met?
- no provision is recognized and instead, a contingent liability is disclosed in the NOTES to the financial statement
What are contingent liabilities?
(May or may not happen)
- a possible obligation that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of uncertain future events, outside of management’s control.
What is a decommissioning provision?
present value of future cash outflows that will be incurred to cover the costs of closing the mine and restoring the environment once the mine has finished operating
(1) Is it required to complete ESG reporting in Canada?
(2) What other country is it required in?
(3) Will it become a requirement in the future?
- No
- Europe
- It may become a requirement in the future, given how ISSB is incorporating elements of ESG Reporting, perhaps hinting how it may become a requirement in the future for ISSB.
