Chapter 1: Introduction to ESG

Question 1

What is ESG?

Answer 1

Environmental, Social and Governance issues used to assess risk and opportunities in order to create long-term value for shareholders.

Question 2

Environmental criteria

Answer 2

How a company’s operations impact the environment and environmental stewardship

Question 3

Social criteria

Answer 3

How a company manages relationships with and creates value for stakeholders

Question 4

Governance criteria

Answer 4

How a company is led and managed i.e. leadership and management philosophy, practices and policies.

Question 5

History and evolution of ESG

Answer 5

1980s - Environmental health and safety
1990s - Sustainability
2000 - 2010s - Corporate social responsibility
2020+ - Environmental social governance

Question 6

Factors behind growth of ESG into the mainstream

Answer 6

Materiality
Transparency
Regulation

Question 7

Examples of ESG Incidents

Answer 7

1. BP - deepwater oil spill
2. Volkswagen - faked emission tests for vehicles
3. Cambridge Analytica - harvested personal info of Facebook users.

Question 8

Types of Sustainable Investing

Answer 8

1. Socially responsible investing
2. Impact investing
3. Green bonds
4. ESG

Question 9

Why is ESG important?

Answer 9

1. Corporate reputation
2. Risk reduction
3. Opportunity management
4. Culture and intrinsic value

Question 10

Positive impacts of ESG

Answer 10

1. Enhanced customer & investor acquisition
2. Reduced disruptions and losses
3. Greater workforce productivity and organizational resilience
4. Identification of new markets/customers, products/services and revenue streams