HC5

Question 1

Overselling Sustainability Reporting We’re confusing output with impact. by Kenneth P. Pucker (HBR, Jun 2021) The problems with current sustainability reporting according to Pucker?

Answer 1

No mandatory standards/audits
E-goals are aspirations (not targets)
Opaque supply chains
Complexity of measurement (eg scope 3 emissions)
Reference points for ESG info?
Inattention to developing countries

Question 2

EU Taxonomy:
Why do we need this regulation which applies to large listed
companies and public interest companies (banks, insurance)?

Answer 2

1. It creates a frame of reference for investors and companies;
2. It supports companies in their efforts to plan and finance their transition;
3. It protects against greenwashing practices;
4. It helps accelerate financing of those projects that are already sustainable and those needed in the transition.

Question 3

Taxonomy for sustainable objectives

Answer 3

6 environmental objectives (green deal)

1. Substantially contribute to
   at least 1 environmental objective
2. Do not significantly harm
   the other environmental objectives
3. Comply with minimum social
   and governance safeguards (eg OECD guidelines)
4. Comply with technical screening criteria to determine whether an activity is aligned for the EU taxonomy

Question 4

3 KPIs that are reported to be eligible and aligned:

Answer 4

1. REVENUES
   Taken from the financial report as “net turnover” (deduct rabates and value added tax or other taxes)
2. OPEX
   Operational expenditures: salaries, rent, lease payments, maintenance, repairs, materials and supplies, insurance, advertising and marketing, R&D
3. CAPEX
   Total of investments in tangible and intangible assets