Sustainabilitg Ratings and Rating agencies

Question 1

Sustainability Indices FI Leaders

Answer 1

Dow Jones Sustainability World Index

Dow Jones Sustainability Europe Index

FTSE4Good Index Series

Question 2

Rate the Raters

Answer 2

5 phase study by SustainAbility to assess work done by sustainability rating agencies and services

Question 3

Reputational Risk Management vs. ESRM

Answer 3

Reputational: any environmental, social, or other issue that has the potential to negatively impact public opinion. Whether true or not, will cause a decline in customer base, costly litigation, or revenue reductions

ESRM: any environmental or social impact that has the potential to negatively impact the environment or society

Question 4

Corporate sustainability vs. philanthropy

Answer 4

Same: listen to their stakeholders and respond

Different: for philanthropy, the response results in changes to the stakeholder, while the latter results in changes to the corporation itself

Question 5

Top 10 corporate brands

Answer 5

Apple : 323 billion
Amazon: 200.7 billion
Microsoft: 166 billion
Google: 165.4 billion
Samsung: 62.3 billion
Toyota: 51.2 billion
Mercedes: 49.3 billion
McDonalds: 42.8 billion
Disney: 40.8 billion

Question 6

When looking at how FIs manage their corporate sustainability

Answer 6

1) no direct responsibility for the environmental footprint of the organization
2) no direct responsibility for philanthropic activities
3) directly supporting the development and generation of revenues through “Business Support” function

Question 7

Sustainability Risk Management sector specific policies and guidelines for business transactions

Answer 7

Forestry and Agribusiness Policy:
- no PTMF and HCVF deforestation; FSC certification or equivalent requirement

Oil and Gas Policy:
- scrutiny of oil sands, shale gas, transnational pipelines

Mining Policy:
- no MTR coal mining
- scrutiny of coal, uranium, etc

Policy on cluster-munitions / controversial weapons

Palm oil guidelines:
- RSPO certification

Hydropower guideline

Nuclear power guideline

Question 8

Sustainability risk management combination of nine weighted factors

Answer 8

Transaction:
- type of deal (IPO, advisory, loan, export finance)
- Deal size
- Bank role (lead, joint/syndicate)

Client:
- sector
- Country
- Policies and commitment (internal)
- Capacity and performance (external

Intangibles:
- miscellaneous

Risk assessment: 3- or 5-tier sore (low to high risk)

Question 9

Sustainability risk management key tools

Answer 9

RepRisk and MSCI ESG Research