CSR Flashcards
What is unlimited abundance ?
The misconception, that fish populations are inexhaustible
What is the concept of overshoot and collapse ?
When human consumption surpasses the carrying capacity of the environment.
Humans consume more than resources, than earth can replenish
What is the maximum sustainable yield ?
Largest amount of fish to be harvested, without depleting the population
What is the tragedy of the commons?
A situation, where every individual has an incentive to consume a resource, but at the expense of every other individuals, with no way to exclude anyone from consuming
What can be done to escape the tragedy of the commons ?
Centrally enforced solutions
Privatisation
Governing of the commons
What are centrally enforced solutions
Authorities regulating the use of the recourse through:
-pricing externalities
-setting limits on quantities
What are problems of centrally enforced solutions ?
Requires:
-knowing payoff function
-non corrupt authorities
-intelligent political decision making
What is privatisation in the context of tragedy of the commons ?
Transfer of ownership, of shared recourse to private entities, giving exclusive rights.
What are problems with privatisation ?
-Might postpone but not fully solve the problem (owners can still exploit)
- some commons can’t be privatised (flowing water/atmosphere)
-holdout problem ( individuals refuse to sell their share of recourse= holdout)
What is governing of the commons in the context of tragedy of the commons?
Creation of an institution, managing the shared recourse.
Creates clear boundaries
Reliable monitoring
Balance of cost an benefits
What is the problem with governing of the commons ?
It’s difficult to implement for commons transcending national boundaries
What is the effect of the tragedy of the commons ?
All major global problems are traced back to it
Welfare of world population, at expense of environment
Benefits only to selected companies-burden to everyone
What is a public policy ?
A plan undertaken by the governments officials to achieve some broad purpose
What are public policy inputs
External pressures:
-economic and foreign concerns
-voter pressure
-Lobbyist
-interest groups
What are public policy goals ?
Can be broad or narrow
Can be high minded or self serving
What are public policy tools ?
-incentives
-penalties
What are public policy effects ?
Outcomes
Indented or unintended
What are the three divisions in need of government interference
Market failure (no incentives to spend)
Negative externalities (greenhouse gases
Natural monopoly (no new competitors)
What environmental regulations are there ?
-Environmental standards
-market based mechanism
-civil and criminal enforcement
-information disclosure
What are environmental standards ?
Setting standard, prescribing allowed levels of pollution, with compliance controlled by the government
What are market based mechanism ?
-taxes
-tradable permits
-subsidies
What is information disclosure ?
-mandating disclosure of emissions and waste
-regulation by embarrassment
What is civil and criminal enforcement ?
Nom compliance connected to financial penalties
Even criminal liability
What is the NFRD
Non financial reporting directive
To which firms does the NFRD apply ?
large companies with more than 500 employees
What do Firms need to report according to the NFRD ?
Environmental protection
Social responsibility & treatment of employees
Human rights
Anti Corruption and bribery
Diversity
Is there third party assurance in the NFRD ?
Not mandatory in most countries
How do files need to report according to NFRD?
As part of the annual report
Online or pdf
What is the CSRD
Corporate social reporting directive
To what companies does the CSRD apply ?
Companies meeting 2/3 criteria:
-250 employees or more
-40m turnover
-20 mio total assets
What do companies need to report according to CSRD ?
Double materiality (impact on/of firm)
Stakeholder topic selection process
Reporting in line with sustainable finance disclosure
Regulation (SFDR) and EU taxonomy regulation
Is there third party assurance in the CSRD ?
Mandatory:
Auditors report
Involvement of key audit partner
Scope to include EU taxonomy
What are the main differences between the NFRD and the CSRD?
- applies to wider range of companies
- more detailed reporting/standards
- required assurance for reports
- stronger enforcement though fines
Which firms are affected by the German supply chain due diligence act ?
Companies with more than 3000 employees (2023) and 1000 (2024)
What do Firma need to comply with according to the German supply chain due diligence act ?
Human rights preservation
Minamata convention on mercury
Stockholm Convention on persistent organic pollutants
Extension to Tier n if necessary
What are consequences of non compliance of the German due Diligence act?
Fines
Exclusion from public tenders
To what firms does the EU supply chain due diligence act apply ?
LLC with over 500 employees
LLC operating in high impact sectors (250 FTE)
What do Firma need to comply to according to the EU supply chain due diligence act ?
Human rights preservation
Pollution prevention
Paris agreement
Across entire supply chain
What are consequences of non compliance with the EU supply chain due diligence act ?
Fines
criminal liability
Exclusion from public tenders
What are the main differences between the German and the EU supply chain due diligence act ?
More companies (250FTE)
More obligations (across hole supply)
Higher sanctions and criminal liability
Stricter reporting (also a plan)
What are advantages of environmental standards ?
Enforceable in courts
Compliance mandatory
What are disadvantages of. environmental standards ?
Large regulatory apparatus required
Old plants may have to close
Can Restes innovation
Fines may be cheaper than compliance
Does not improve above compliance
What are advantages of market based mechanism?
Gives flexibility to buisenesses
Achieves goals at lower costs
Encourage continued improvement
Saves jobs by allowing old plants to stay open
What are disadvantages of market based mechanisms ?
Gives license to pollute
Enforcement is difficult
Permit levels are hard to set
Regional imbalances
What are advantages of government incentives ?
Reward responsibility
Encourages to exceed minimum
What are disadvantages if government incentives ?
Incentives may not be strong enough
What are advantages of information disclosure?
Little cost for government
Companies able to reduce cost efficiently
May deter from wrongdoings
What are disadvantages of information disclosure ?
Does not motivate all companies
What does CSR evolve around ?
Economic Ecological Social factors
What’s is CSR
A management concept, in which companies integrate social and environmental concerns in their buisenss operation
What are the 4 steps of the CSR Pyramid ?
Be a good corporate citizen
Be ethical
Obey the law
Be profitable
What is social washing ?
Appearing as more socially responsible than they actually are
What are the four steps to measure and manage impact
Set strategy
Integrate
Optimise
Reinforce
What are the five dimensions of impact ?
1.what are the outcomes of investment
2.who experiences the outcome
3. How much of what outcome is actually occurring
4.contribution in enterprise/investor level
5.risk: how could the outcome turn worse than expected
Name 3 risk types
External risk, (external disruption)
Efficiency risk (needed?)
Execution risk (not delivered as planned)
What are the five steps to set a SDG strategy ?
1.define purpose
2.identify SDG outcome
3. Prioritise SDG outcomes
4.Set ABC goals
5.define impact thesis
What are ABC goals ?
A-ct to avoid harm
B-enefit the stakeholder
C-ontribute to solutions
What are the three steps to effectively integrate SDG strategies ?
1.develop mindset
2.decide what to measure
3. Get process in place
What are the three questions to optimise SDG integration ?
What happened
Why did it happen
What next
What are the three steps to reinforce SDG strategies
Deepen commitment
Disclose externally
Seek verification
What is the shareholder perspective of buiseness ?
Company has no social responsibility to the public or society only to shareholders
What is the stakeholder perspective
Answer to growing criticism of shareholder perspective
Company has broader responsibility to all stakeholders
What is the state of SDGs today ?
Countries where freedom of speech is denied rise
11% of all children are engaged in Labor
95% of countries violate right of strike
