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Corporate Social Responsibility > Lecture 3 & 4 > Flashcards

Lecture 3 & 4 Flashcards

1
Q

Double Materiality Concept

A

Financial sector impacts ESG, ESG impacts the financial sector.

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2
Q

financial risk

A

the impact of ESG developments on the valuation of financial assets.

If a company faces environmental issues like pollution, or governance problems such a s leadership scandals, it can affect the financial performance of their assets.

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3
Q

Reputational Risk

A

If a financial institution unknowingly supports businesses with a negative impact on the environment or society, it can lead to a tarnished reputation.

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4
Q

why ESG (from a business perspective) (5)

A
  1. streamlined regulatory compliance
  2. reduced operations costs
  3. better shareholder returns
  4. strong customer loyalty
  5. higher employee engagement
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5
Q

why ESG (investors perspective) (6)

A
  1. helping environmental causes
  2. holding companies accountable for their actions
  3. rewarding ethical companies based on their principles
  4. ensuring a positive impact on local communities
  5. obtainint decent returns
  6. managing firm’s risks (more resilient and sustainable portfolio’s ovet the long term)
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6
Q

market risk
credit risk
operational risk

A

market risk is lossess from trading and investements
credit risk is unexpected unpaid loans
operational risk is day-to-day operations (based on income and lending volume)

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7
Q

risk management (4)

A

IAAM
1. identification
2. assessment
3. application
4. monitoring

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8
Q
  1. identification
A

spot potential risks, imagine different scenarios, manage risks collectively

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9
Q
  1. assesment
A

evaluate how much and how likely risks might happen, collect data, and use various approaches to assess risks

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10
Q
  1. application
A

hedging (employ strategies to minimize risks)
exit or divestment if risks are too high

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11
Q
  1. monitoring
A

reporting- keeping an eye on risk status through regular reports
evaluation- continuously assessing and adjusting based on conditions

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12
Q

Risk Appetite guides Identification:

A

The organization’s risk tolerance directs the identification of risks. This ensures focus on risks aligning with what the organization is willing to handle.

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13
Q

Assessment Guides Risk Appetite:

A

The results of risk assessments directly inform and guide the organization’s risk appetite. This ensures that the organization’s willingness to accept or avoid certain risks aligns with the practical evaluation of those risks.

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14
Q

what’s the aim of The EU Sustainable Finance Action Plan? (2)

A
  1. leverage financial markets to support sustainable economic growth in europe
  2. manage risks temming from ESG issues
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15
Q

objectives of The EU Sustainable Finance Action Plan? (3)

A
  1. reorient capital flows to a sustainable economy
  2. mainstream sustainability into risk management (make sustainability a natural part of how org.’s think about risk
  3. foster transparency and long-terminism
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16
Q

approaches towards sustainable investments 5

A
  1. traditional
  2. responsible
  3. sustainable
  4. impact-first
  5. philanthropy
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17
Q

responsible approach

A

consideration, and avoidance of ESG risks

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18
Q

sustainable approach

A

enhence resilience by ading measures to assess the impact of ESG, and add measures to facilitate the transition of potential clients

-> avoid risks, capture opportunities

19
Q

impact-first approach

A

trade off some financial return for the sake of ESG benefits
-> maximize impact

20
Q

philanthropy approach

A

accept zero financial returns, and maximize impact

21
Q

two components of the sustainable approach

A
  1. enhance resilience
  2. drive change
22
Q

Key challenges for both enhancing resilience and driving change

A

1) DATA
2) QUANTIFICATION

23
Q

double-entry bookkeeping

A

for every financial action a company takes, there are two entries – one showing where the money comes from (credit), and the other showing where it goes (debit).

24
Q

financial accounts

A

keeping track of every financial move within a business. The goal is to figure out if the business is making a profit or not.

25
Q

national accounts

A

looking at a whole country’s economy. It involves measuring things like GDP, which shows the total value of all goods and services produced in a country.

26
Q

harmonization

A

the process of making things work together smoothly.

27
Q

institutionalization

A

establishing a standard/ norm within a system

28
Q

Economic Growth Paradigm

A

sustained positive economic growth, measured by metrics like GDP, is essential for societal progress.

29
Q

what’s wrong with GDP?

A
  1. doesn’t capture well-being
  2. doesn’t address distribution
  3. doesn’t indicate well-being of future generations
30
Q

easterlin paradox

A

despite economic growth, there may not be a proportional increase in life satisfaction.

31
Q

compare beyond profit, and beyond gdp

A

Beyond Profit is for businesses. Beyond GDP is for countries.
Beyond Profit looks at how companies are socially responsible.
Beyond GDP looks at how well a whole society is doing, considering more than just money.

32
Q

human development index is based on (CAPABILITY)

A

health
education
standard of living (gni)

33
Q

genuine progress indicator (WELFARE ECONOMICS)

A

social, environmental, economic conditions

34
Q

life evaluation index (SUBJECTIVE WELL BEING)

A

well-being based on self-reported life satisfaction
human centric perspective

35
Q

doughnut economics

A

It introduces the concept of the “doughnut,” where the outer ring represents planetary boundaries, ensuring environmental sustainability, and the inner ring represents a social floor, ensuring essential human needs are met.

36
Q

what theory is genuine progress indicator?

A

welfare economics

37
Q

what theory is human development index?

A

capability

38
Q

(3) how does KPN embed ESG in their strategy

A
  1. responsible
  2. sustainable
  3. inclusive
39
Q

Trias Energetica 2.0 is an approach to minimize the impact of energy use by … (4)

A
  1. reducing demand
  2. utilizing renewable energy sources
  3. optimizing efficiency
  4. ensuring the right timing for energy consumption
40
Q

how does KPN deal with supplier engagement/ value chain?

A
  1. figure out the emissions from bought products
  2. realize that suppliers are different
  3. make the supply chain clear and visible.
  4. collaborative identification of improvement areas
41
Q

how does KPN engage with suppliers (6)

A
  1. collect materials
  2. recycle
  3. sustainable design
  4. code of conduct (outlining expectations)
  5. encourage responsible consumption
  6. optimize distribution
  7. production/ collab with suppliers
42
Q

how to create a life cycle assesment? (4)

A
  1. define goal and scope
  2. material assesment
  3. carbon impact assesment
  4. interpret results
43
Q

possible approach to reporting on sustainability

A
  1. discuss early with auditors
  2. clearly define business strategy
  3. build a diverse team
  4. align product and line management
  5. stay informed through industry memberships
  6. clearly define reporting scope
  7. build a dataset that can be used for multiple purposes
  8. reporting framework can spark discussions

Corporate Social Responsibility (7 decks)

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