Chapter 2: ESG Factors

Question 1

Main environmental issues

Answer 1

1. Climate change
2. Natural resource scarcity
3. Pollution and waste

Question 2

Impact of environmental factors on corporations

Answer 2

Physical risks
Transition risks
Human risks

Question 3

Main social issues

Answer 3

1. Human capital management and welfare
2. Product/service safety
3. Human rights/labour management

Question 4

Impact of social factors on corporations

Answer 4

Employees
Customers
Communities

Question 5

Main governance issues

Answer 5

1. Board quality, diversity and effectiveness
2. Reporting, transparency, business ethics
3. Executive compensation

Question 6

Impact of governance factors on corporations

Answer 6

Stakeholder trust & license to operate
Enhanced risk management
Long-term value creation

Question 7

Materiality

Answer 7

A materiality analysis needs to be done to determine which ESG issues are most important to the long-term success of the business, as well as to the stakeholders