Class 6 & 7 Flashcards
ESG INVESTING- A framework for analyzing how companies perform in comparison with their peers according to ESG criteria. what does esg means
Environmental performance (E): water management, waste management, resource management, environmental preservation, carbon footprint, use of toxic products, etc.
Social impact (S): ways of treating stakeholders (customers, employees, suppliers, communities), promotion of equity, diversity and inclusion, etc.
Governance issues (G): governance structure, board composition, respect for stakeholders, etc.
Difference between ESQ investing, Socially responsible investment, impact investing
SRI focuses more on matching investments to the values of an individual investor. ESG looks at company performance, while SRI focuses more on the values of the investor.
Impact investing is less about return and more about intent. With impact investing, investors invest in market segments that are dedicated to solving pressing problems in the world. (ex: renewable energy) Compared to ESG, impact investing can generate lower returns depending on the sector invested in, due to the concessions investors make to support early-stage companies in
LAWRENCE KOLHBERG’S MODEL (1927-1987) 3 levels
Level 1
Immature moral judgment / pre-conventional level
Level 2
Mature moral judgment / conventional level
Level 3
Existential moral development / post-conventional level
What does level 1 of lawrence theory represents?
Obedience out of fear of punishment
(little or no integration of social norms)
What does level 2 of lawrence theory represents?
Compliance with social standards
(partial integration of the standards)
What does level 3 of lawrence theory represents?
Understanding and recognition. Consciousness
and moral responsibility. (Integration and even
promotion of social standards, following
thorough reflection)
Stages of level 1
STAGE 1
Centered on the self
STAGE 2
Centered on
contractual exchanges
Stages of level 2
STAGE 3
Mutuality within a
community
STAGE 4
Harmony in a society
Stages of level 3
STAGE 5
Generally
indescribable
- Extremely rare
- Sense of responsibility to the world as a whole
- Responsibility to future generations
- Interconnection between humans and nature
- Integration of material, psychosocial, and spiritual realities
ALBERT BANDURA (1925-2021)
What are the 8 MORAL DISENGAGEMENT MECHANISMS
- Social and moral justification
- Advantageous comparison
- Euphemistic language
- Displacement of responsibility
- Diffusion of responsibility (outsourcing)
- Minimizing or distorting harmful effects
- Attribution of blame to victims
- Dehumanization of victims (ex: impoverished status of indians made them easy to dehumanize)
- Euphemistic language moral disensgagement meaning
References to a corruption scheme: “We have taken the necessary measures to recover from
damages suffered as a result of the improper payments scheme” (organization involved in the
scheme); “Difficulties faced in the past, or even in the present, by companies […] with respect to
integrity” (regulator).
Creative accounting: techniques used in accounting by a company to modify, legally or not, the
presentation of its financial statements in a way that is more favorable to stakeholders’ expectations
NORMALIZATION OF CORRUPTION IN ORGANIZATIONS normalization is equal to … + … + ….
Normalization = rationalization + socialization + institutionalization
Definition of Rationalization:
- Denial of responsibility, of victim, of injury
- Social weighting
- Appeal to higher loyalties
- Metaphor of the ledger
Definition of Socialization
Socialization:
* Cooptation: awards, promotion, working conditions, status
* Incrementalism: little by little advances
* Compromise: loyalty, reciprocity, “I owe you one”
