Scarica Financial Accounting taxation e più Schemi e mappe concettuali in PDF di Management Theory solo su Docsity! ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) It’s an acronym for environmental, social, and governance performance, captured through sustainability accounting: Environmental focuses at how a company performs as a steward of the natural environment. Social examines how a company manages relationships with its employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s set of rules, principles, systems, and procedures to ensure a company is managed and controlled in the best possible manner. KPMG defines ESG as a framework to integrate environmental, social, and governance risks and opportunities into a firm’s strategy to build long-term financial sustainability and value creation. Environmental issues Climate change; Carbon emissions; Carbon footprint; Climate change vulnerability. Natural Resources; Water stress; Biodiversity and land use; Raw material sourcing; Pollution and Waste; Toxic emissions and waste; Packaging material and waste; Electronics waste. Environmental Opportunities; Clean technology; Green buildings; Renewable energy. Social issues Human Capital; Labor Management; Health and Safety; Human capital development; Supply chain labor standards; Diversity, Equity and Inclusion. Product Safety; Chemical safety; Privacy and data security; Responsible investments; Stakeholder opposition; Sourcing of materials. Social Opportunity; Access to health care and nutrition; Access to financial health. Governance issues Corporate Governance; Board diversity; Executive pay; Ownership. Corporate Behavior; Business ethics; Anti-competitive practices; Corruption and instability; Tax Transparency. How can ESG factors help a company? Considering Governance/Economic, Social, and Environmental, and externalities can help to improve financial performance, inform strategy planning, and increase influence with investors and other stakeholders. Shareholder vs stakeholder A shareholder is a stakeholder of the company while a stakeholder is not necessarily a shareholder. A stakeholder is an interested party in the company’s performance for reasons other than capital appreciation, such as a company’s environmental impact or labor practices. What are externalities? Side effects or consequences to the environment and society as a result of an industrial or commercial activity that affect other parties without being reflected in the cost of the goods or services involved. Externalities often occur when a product or service's price equilibrium cannot reflect the true costs and benefits of that product or service. ESG reporting Investors are urging companies to build ESG considerations into their strategy. Demanding reporting of key ESG efforts, risks and opportunities. ESG data Mainstream investors have begun to look beyond traditional financial statements to gain additional insight into whether and how a company’s past results are likely to be indicative of its future performance. Much of this information falls under the banner of sustainability or ESG information.
