Lecture2.4

Question 1

Stakeholder Perspective

Answer 1

Stakeholder Perspective:
- Stakeholder views on sustainability vary and may contradict.
- Examples:
- NGOs, consumers, labor unions, employees—different criteria.

Question 2

Investor Perspective

Answer 2

Investor Perspective:
- Investors seek objective, reliable sustainability assessments.
- ESG (Environmental, Social, Governance) is a popular, though non-standardized, approach.

Question 3

ESG Scores

Answer 3

ESG Scores:
- Calculated by aggregating data for E, S, and G pillars.
- Weighted scores for each pillar combined into one score.
- Enable quantitative comparisons between companies.
- The higher the score, the more sustainable the company is.
- Compare within and across sectors.
ESG is done by company itself and/or by third party companies.

Question 4

Limitations of ESG

Answer 4

Limitations of ESG:
- Ratings may not capture all sustainable efforts.
- Depend on commercial data providers—risk of bias.
- Cultural, temporal, and regional factors affect assessment.
- Data accuracy hard to achieve and hard to judge.
Some ESG measures are weak.
-> lack of standardization.

Question 5

Additional Assessment Criteria

Answer 5

Additional Assessment Criteria:
- Investigate key industry-specific sustainability topics.
- Assess the integration of sustainability into core processes.
- Check for absolute vs. relative sustainability targets. -> preferred absolute.
- Look for progress, transparency, and comprehensive data. -> pace of the journey
Achtung: kein richtig/falsch, schwarz/weiss