Lecture 3-ESG and Impact Measurement Flashcards
What does the trade-off between CSR and financial performance mean?
Either: maximizing returns for shareholders
Or: creating social value
What are the shared value opportunities?
Combining both CSR and financial performance -> to create social value
Example: profitable activities with positive societal impact such as clean energy
How do we find shared value opportunities?
Through social entrepreneurship
1) A revenue-generating business model such as multi-sided platform
2) A highly innovative approach like AI
What does the ‘Ubiquity of Measurement Framework’ show?
Vertical axis: financial returns versus impact outcomes
Horizontal: type of framework from principles to reporting and benchmarking
What do MSCI ESG Ratings measure?
Financially relevant ESG risks and opportunities
Of what does the ESG rating consist?
1) Environment
2) Social
3) Governance
What is SASB?
It measures the financial impact of sustainability factors on companies -> it’s a standard for companies to disclose ESG issues to investors
How can we ensure that firms with high ESG ratings are not decoupling?
Rating: outside-in approach such as ESG news
Reporting: ESG performance
Certification: B Impact assessment and B corp certification
What are the three main pillars of B lab?
1) Measurement standards
2) B corp certification
3) New legislation
What does the first pillar ‘measurement standards’ mean?
B impact assessment: a tool to measure a company’s overall social and environmental performance
What does the second pillar ‘B corp certification’ mean?
Very high impact companies
What does the third pillar ‘new legislation’ mean?
To enforce ESG standards
What are the five key sections of BIA?
- Governance
- Workers
- Customers
- Community
- Environment
What is rainbow hushing?
When companies support SDGs trough their actions but not make them public
