BUSS1000 Lecture Notes - Lecture 9: Slacktivism, Espn Bottomline, Greenwashing
28 May 2018
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WEEK 9: CLIMATE CHANGE AND SUSTAINABILITY
MEGATRENDS: RESOURCE SECURITY
• See above à W1, W2 CSR, CRV
o Human impact on environment entering public consciousness à role of business in this
§ Global warming mid 20th century
§ Ozone depletion observed in 1970s
§ Exxon Valdez Oil Spill in 1989
o Direct impact of firms:
§ Great Smog of 1952
§ Bhopal Disasters in 1984
• Today, stakeholders are concerned with sustainability
• Business context: not specifically talking about climate change, environmental impact, or social impact à ARE
talking about whether this practice is sustainable
• KEY IDEA: sustainable development à “Development that meets the needs of current generations without
compromising the ability of future generations to meet their needs”
SUSTAINABLE INVESTING
• Statistics:
o 2012: $13.3 trillion USD in sustainable investing à 2016: $22.89 trillion USD in sustainable investing
o Global GDP in 2015 was $74.29 trillion USD
o Sustainable investing = 26-30% of world’s GDP
§ Biennial growth of approx. 26%
• Types of Sustainable Investing:
o Integrated: systematic + explicit inclusion of ESG in investment decision making (drivers of risk + return)
o Screening:
§ Exclusionary/negative: avoiding sectors e.g. gambling, tobacco, alcohol, fossil fuels
§ Positive/best-in-class: positive ESG, sustainability performance
§ Norms-based: minimum standards
o Sustainability themed: clean energy, green tech, sustainability agriculture, green property etc.
o Impact/community investing: targeted investments aimed at solving social and environmental problems
o Corporate advocacy and shareholder action: shareholder power to directly influence corporate
behaviour (corporate engagement, proposals, proxy voting)
Global Sustainable Investments by Strategy and Region 2012 and 2016
• Sustainability and Climate Change: Stakeholders demand orgs consider and implement sustainable mindsets
o Working in organisations:
§ 2014: around 80% of global fuel demands met by fossil fuels
§ 2014: 1.3 billion people without electricity
§ Estimated emissions need to be lowered by 35-70% by 2050
o These shifts will in turn, demand substantial societal and infrastructure shifts
SUSTAINABLE REPORTING
• Efforts and measures around reporting:
o Several bodies that attempt to bring together, standardize, and evaluate reporting measures
o Global Reporting Initiative
§ Economic, environmental and social sustainability à sub categories
§ Comprehensive sustainability reporting framework à global standards
§ Employed by many companies e.g. Ford, Target, McDonalds, Nike, Xerox, Coca Cola
§ 80% of G250 and 69% of N100 companies use GRI
• Why pay? à builds credibility, global standardisation
• Critiques of reporting:
o Milne + Gray 2013: modern disconnect b/w sustainability reporting + what we consider to be urgent
issues of our era = sustaining life supporting ecological systems
o Reporting is something that happens at the end
Document Summary
Human impact on environment entering public consciousness role of business in this. Today, stakeholders are concerned with sustainability: business context: not specifically talking about climate change, environmental impact, or social impact are talking about whether this practice is sustainable. Key idea: sustainable development development that meets the needs of current generations without compromising the ability of future generations to meet their needs . Statistics: 2012: . 3 trillion usd in sustainable investing 2016: . 89 trillion usd in sustainable investing, global gdp in 2015 was . 29 trillion usd, sustainable investing = 26-30% of world"s gdp. Integrated: systematic + explicit inclusion of esg in investment decision making (drivers of risk + return: screening: Exclusionary/negative: avoiding sectors e. g. gambling, tobacco, alcohol, fossil fuels. Norms-based: minimum standards: sustainability themed: clean energy, green tech, sustainability agriculture, green property etc, corporate advocacy and shareholder action: shareholder power to directly influence corporate.
