Lecture 6 - Finance Flashcards
1
Q
Sustainable Finance
A
the process of taking environmental, social & governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities & Projects (European Commission)
2
Q
Negative Externality
A
A cost to an uninvolved party generated by another a party
3
Q
Shareholder view
A
A firm’s objective should only be to maximize shareholder value
4
Q
Stakeholder view
A
Firms needs to pay attention to all agents who are affected by their decisions
5
Q
3 reasons to consider all stakeholders (ESG Profile)
A
- Attract better employees
- Resilience to physical risk and transition risk
- Attract cheaper funding opportunities
6
Q
A
