Lecture 8

lecture 9 is about CSR (corporate social responsibility)

CSR (Corporate Social Responsibility):

• CSR focuses on a company "doing good" and covers activities such as citizenship, philanthropy, and sustainability initiatives.

• It is often discretionary or in response to external pressure from stakeholders or society at large.

• CSR activities are usually seen as separate from the company's core goal of profit maximization.

• The CSR agenda is often determined by external reporting requirements or the personal preferences of the company's leadership.

• The impact of CSR is typically limited to the scope of the company's set CSR budget or footprint.

CSV (Creating Shared Value):

• CSV is about generating economic value in a way that also produces value for society by addressing its needs and challenges.

• It sees social and community benefits as integral to the company's success and aligns them with the company's core business strategy and operations.

• Instead of being an add-on, CSV is integral to a company's profit-maximizing goals.

• The CSV agenda is specific to the company and is generated internally, often leading to innovation and strategic alignment with social goals.

• CSV approaches aim to realign the entire company budget and resources towards creating shared value, rather than limiting impact to a designated CSR budget.

1. Reactive: Companies with a reactive approach to CSR typically deny responsibility for community or environmental problems and do very little to address CSR concerns. Any actions they do take may be more about appearances than actual impact.

2. Defensive: Defensive companies admit that they have responsibilities in terms of CSR, but they do only the minimum required. Their efforts are often aimed at avoiding negative publicity or complying with regulations rather than proactively contributing to social or environmental causes.

3. Accommodative: Companies that are accommodative recognize their CSR responsibilities and take the necessary steps to meet them. They comply with standards and societal expectations and are generally responsive to societal demands.

4. Proactive: Proactive companies go beyond what is legally required or expected of them in terms of CSR. They anticipate responsibilities and actively engage in actions that will create positive social impact, often leading to long-term benefits for both society and the company.

These approaches range from doing the least possible to exceeding expectations, reflecting a spectrum of how deeply integrated CSR is within a company's operational and strategic framework.

ESG: Environmental, Social, and Governance standards

ESG: Environmental, Social, and Governance standards

A set of standards is typically assessed for investment purposes, measuring a business's impact on society and the environment and its transparency and accountability.

Measuring Environmental, Social, and

Governance standards: Not easy!

Limited convergence among raters

• ESG is vital, but consistency and comparability is a problem

• FESG is relevant for the stakeholders