Corporate sustainability 2025
Inhoudsopgave
Lecture 1: Organization & Introduction .......................................................................................... 3
Lecture 2: Concepts of CSR & Corporate Purpose .......................................................................... 4
Corporate purpose...........................................................................................................................4
CSR and Financial Performance .......................................................................................................6
Creating shared value (CSV) .............................................................................................................6
Lecture 3: Measuring Sustainability ............................................................................................... 8
Impact Weighted Accounts (IWA) .................................................................................................... 10
Accounting for carbon emissions: e-liabilities: e-liabilities ................................................................ 12
(Sustainable) balanced scoreboard ................................................................................................ 14
Lecture 4: Governance of ESG ......................................................................................................15
Part 1 – Define Corporate Governance............................................................................................. 15
Part 2 – Governance of Sustainability: Disclosures required under the European Corporate
Sustainability Reporting Directive (CSRD) since FY 2024 .................................................................. 16
Part 3 – Mini Case study: Ahold-Delhaize 2023 annual report ESG governance ................................... 16
Lecture 5: Internal Regulations on Sustainability Reporting ...........................................................18
Global sustainability standards – IFRS foundation: International Sustainability Standards Board ........ 21
European sustainability standards – European Commission/EFRAG (European Financial Reporting
Advisory Group): European Sustainability Reporting Standards (ESRS) .............................................. 23
United Stated sustainability disclosures – Securities Exchange Commission ..................................... 24
Academic evidence ....................................................................................................................... 25
Lecture 6: CSRD Deep Dive ..........................................................................................................27
Part 1 – CSRD key building blocks ................................................................................................... 27
Part 2 – CSRD implementation Ahold Delhaize case ......................................................................... 31
Part 3 – Your assignment company .................................................................................................. 32
Lecture 7: EU Green Deal and EU taxonomy ..................................................................................33
Part 1 – EU legislation and the Green Deal ....................................................................................... 33
Part 2 – EU Taxonomy ..................................................................................................................... 34
Lecture 8: Guest Lecture – Ageas ..................................................................................................37
Lecture 9: Debt Capital providers .................................................................................................40
Part 1 – The role of ESG information for debt holders ........................................................................ 40
Part 2 – Banks and sustainable lending ............................................................................................ 40
Part 3 – Public debt: Green and Social Bonds ................................................................................... 43
,Lecture 10: ESG and equity capital providers ................................................................................46
ESG and equity valuation ................................................................................................................ 46
Socially Responsible Investing (SRI) ................................................................................................ 47
EU Sustainable Finance Disclosure Regulation (SFDR) ..................................................................... 50
Active ownership ........................................................................................................................... 52
The Role of Institutional Investors ................................................................................................... 53
Lecture 11: Broader stakeholders .................................................................................................55
Part 1 – How do consumers respond to ESG? ................................................................................... 55
Part 2 – Broader stakeholders (Lucìa Celis) ...................................................................................... 58
Lecture 12: guest lecture – KPMG .................................................................................................61
ESG reporting landscape ................................................................................................................ 61
Assurance on ESG information ....................................................................................................... 62
Limited versus reasonable assurance ............................................................................................. 63
Lecture 13: ESG rating ..................................................................................................................64
ESG rating (agencies) ..................................................................................................................... 64
ESG ratings methodologies – LSEG/Refinitiv examples ..................................................................... 66
ESG rating informativeness ............................................................................................................. 68
2
,Lecture 1: Organization & Introduction
Anti profit beliefs → people think most firms that operate sustainable are less profitable
than firms that operate less sustainable. This is being tested by presenting certain firms,
to which a person must indicate how much profit the firm makes (scale 1-10) and of what
value the firm is to society (also scale 1-10). Most people believed that when a firm has a
greater value to society, the firm makes less profit. This is called anti profit beliefs.
Our judgements are sensitive to intentions when we perceive these intentions to be bad.
When people or companies claim to do good, we screen for selfish motives or bad
intentions. We discount the outcome of actors with perceived bad intentions, regardless
of whether the outcome is good or bad. Perceived conflict between profit-making (selfish
motive) and doing good (altruistic motive) → zero-sum game.
Our experience with market exchanges reinforces our belief that transactions are zero-
sum:
- E.g., if a company makes more profit on a sale, it comes at the expense of the
customer.
- When assessing how firms make profit, individuals often assume it is also zero-
sum: the more profit a firm makes, the less value for society.
- Conversely: investing in social responsibility (CSR) must mean a firm makes less
profit.
Anti-profit beliefs can arise because we anchor on this zero-sum game (mental shortcut
or heuristic) when evaluating a company. This is potentially enforced by our new
environment: scandals and negativity sell.
We often fail to see that profit can benefit society in aggregate.
- Long-term/repeated interaction perspective → positive sum view of markets
- E.g., inventives to innovate, provide valuable goods, or increase product/service
quality.
When Bhattacharjee et al. make the respondent in their paper aware of this anti-profit
beliefs (APB), the participants are attenuated. At the same time, tradeoffs between profit
and societal value, and between different stakeholders’ objectives, do exist. How should
firms balance different stakeholders priorities?
Gartenberg et al. find that purpose and profit are not correlated,
but if we distinguish between firms with high purpose-clarity vs.
high purpose-camaraderie, there is a correlation. According to
their study purpose-clarity has a positive correlation with return
on assets, and purpose-camaraderie has a slightly negative
correlation with return on assets.
High purpose companies: employees find their work
meaningful. Motivated staff means they are more productive,
and good reputation attracts more talented employees and
customer loyalty.
3
, Lecture 2: Concepts of CSR & Corporate Purpose
The evolution of corporate sustainability:
Corporate purpose
To understand what corporate purpose is, we need to first understand why we have
corporations (firms). Firms:
- Transform inputs into outputs
- But this can also be done by individuals, interacting in the marketplace where
supply and demand meet each other.
Firms exist to minimize the cost of coordinating economic activity (transaction costs)
(Coase, 1937).
You can also see a firm as efficiently organizing resources to create value. The question
here is to whom the firm creates value. The traditional view on this is value to owners,
however the evolving view is value in a more general sense.
Firms can also play a role in the coordination of socially responsible activities that cannot
easily be achieved through mechanisms alone. This is a different aspect of efficient
allocation of resources. It may also be necessary for the survival of a firm to consider the
wider social and environmental impact of its operations.
To whom a firm is accountable was a topic of debate in the 1930s between Berle
(shareholder primacy) vs. Dodd (stakeholder interests):
- Berle’s shareholder primacy emphasizes managers (legal) fiduciary duty (plight)
towards shareholders
o Investors invest their own funds into a firm
o Investors should get the returns that this money generates
o Important note: back then, the primary shareholders of firms were
employees. Berle was advocating for a stronger accountability (under law)
of directors towards the workers in a firm.
- Dodd views corporation as economic institution with a social service as well as a
profit-making function
o Corporations embedded in society and environment (stakeholder theory)
o Corporations profit from society and environment and need to give
something back
o Corporations receive a license to operate from society (legitimacy theory)
o Corporations’ actions’ impact societies beyond profit generation
(“externalities”)
4
Inhoudsopgave
Lecture 1: Organization & Introduction .......................................................................................... 3
Lecture 2: Concepts of CSR & Corporate Purpose .......................................................................... 4
Corporate purpose...........................................................................................................................4
CSR and Financial Performance .......................................................................................................6
Creating shared value (CSV) .............................................................................................................6
Lecture 3: Measuring Sustainability ............................................................................................... 8
Impact Weighted Accounts (IWA) .................................................................................................... 10
Accounting for carbon emissions: e-liabilities: e-liabilities ................................................................ 12
(Sustainable) balanced scoreboard ................................................................................................ 14
Lecture 4: Governance of ESG ......................................................................................................15
Part 1 – Define Corporate Governance............................................................................................. 15
Part 2 – Governance of Sustainability: Disclosures required under the European Corporate
Sustainability Reporting Directive (CSRD) since FY 2024 .................................................................. 16
Part 3 – Mini Case study: Ahold-Delhaize 2023 annual report ESG governance ................................... 16
Lecture 5: Internal Regulations on Sustainability Reporting ...........................................................18
Global sustainability standards – IFRS foundation: International Sustainability Standards Board ........ 21
European sustainability standards – European Commission/EFRAG (European Financial Reporting
Advisory Group): European Sustainability Reporting Standards (ESRS) .............................................. 23
United Stated sustainability disclosures – Securities Exchange Commission ..................................... 24
Academic evidence ....................................................................................................................... 25
Lecture 6: CSRD Deep Dive ..........................................................................................................27
Part 1 – CSRD key building blocks ................................................................................................... 27
Part 2 – CSRD implementation Ahold Delhaize case ......................................................................... 31
Part 3 – Your assignment company .................................................................................................. 32
Lecture 7: EU Green Deal and EU taxonomy ..................................................................................33
Part 1 – EU legislation and the Green Deal ....................................................................................... 33
Part 2 – EU Taxonomy ..................................................................................................................... 34
Lecture 8: Guest Lecture – Ageas ..................................................................................................37
Lecture 9: Debt Capital providers .................................................................................................40
Part 1 – The role of ESG information for debt holders ........................................................................ 40
Part 2 – Banks and sustainable lending ............................................................................................ 40
Part 3 – Public debt: Green and Social Bonds ................................................................................... 43
,Lecture 10: ESG and equity capital providers ................................................................................46
ESG and equity valuation ................................................................................................................ 46
Socially Responsible Investing (SRI) ................................................................................................ 47
EU Sustainable Finance Disclosure Regulation (SFDR) ..................................................................... 50
Active ownership ........................................................................................................................... 52
The Role of Institutional Investors ................................................................................................... 53
Lecture 11: Broader stakeholders .................................................................................................55
Part 1 – How do consumers respond to ESG? ................................................................................... 55
Part 2 – Broader stakeholders (Lucìa Celis) ...................................................................................... 58
Lecture 12: guest lecture – KPMG .................................................................................................61
ESG reporting landscape ................................................................................................................ 61
Assurance on ESG information ....................................................................................................... 62
Limited versus reasonable assurance ............................................................................................. 63
Lecture 13: ESG rating ..................................................................................................................64
ESG rating (agencies) ..................................................................................................................... 64
ESG ratings methodologies – LSEG/Refinitiv examples ..................................................................... 66
ESG rating informativeness ............................................................................................................. 68
2
,Lecture 1: Organization & Introduction
Anti profit beliefs → people think most firms that operate sustainable are less profitable
than firms that operate less sustainable. This is being tested by presenting certain firms,
to which a person must indicate how much profit the firm makes (scale 1-10) and of what
value the firm is to society (also scale 1-10). Most people believed that when a firm has a
greater value to society, the firm makes less profit. This is called anti profit beliefs.
Our judgements are sensitive to intentions when we perceive these intentions to be bad.
When people or companies claim to do good, we screen for selfish motives or bad
intentions. We discount the outcome of actors with perceived bad intentions, regardless
of whether the outcome is good or bad. Perceived conflict between profit-making (selfish
motive) and doing good (altruistic motive) → zero-sum game.
Our experience with market exchanges reinforces our belief that transactions are zero-
sum:
- E.g., if a company makes more profit on a sale, it comes at the expense of the
customer.
- When assessing how firms make profit, individuals often assume it is also zero-
sum: the more profit a firm makes, the less value for society.
- Conversely: investing in social responsibility (CSR) must mean a firm makes less
profit.
Anti-profit beliefs can arise because we anchor on this zero-sum game (mental shortcut
or heuristic) when evaluating a company. This is potentially enforced by our new
environment: scandals and negativity sell.
We often fail to see that profit can benefit society in aggregate.
- Long-term/repeated interaction perspective → positive sum view of markets
- E.g., inventives to innovate, provide valuable goods, or increase product/service
quality.
When Bhattacharjee et al. make the respondent in their paper aware of this anti-profit
beliefs (APB), the participants are attenuated. At the same time, tradeoffs between profit
and societal value, and between different stakeholders’ objectives, do exist. How should
firms balance different stakeholders priorities?
Gartenberg et al. find that purpose and profit are not correlated,
but if we distinguish between firms with high purpose-clarity vs.
high purpose-camaraderie, there is a correlation. According to
their study purpose-clarity has a positive correlation with return
on assets, and purpose-camaraderie has a slightly negative
correlation with return on assets.
High purpose companies: employees find their work
meaningful. Motivated staff means they are more productive,
and good reputation attracts more talented employees and
customer loyalty.
3
, Lecture 2: Concepts of CSR & Corporate Purpose
The evolution of corporate sustainability:
Corporate purpose
To understand what corporate purpose is, we need to first understand why we have
corporations (firms). Firms:
- Transform inputs into outputs
- But this can also be done by individuals, interacting in the marketplace where
supply and demand meet each other.
Firms exist to minimize the cost of coordinating economic activity (transaction costs)
(Coase, 1937).
You can also see a firm as efficiently organizing resources to create value. The question
here is to whom the firm creates value. The traditional view on this is value to owners,
however the evolving view is value in a more general sense.
Firms can also play a role in the coordination of socially responsible activities that cannot
easily be achieved through mechanisms alone. This is a different aspect of efficient
allocation of resources. It may also be necessary for the survival of a firm to consider the
wider social and environmental impact of its operations.
To whom a firm is accountable was a topic of debate in the 1930s between Berle
(shareholder primacy) vs. Dodd (stakeholder interests):
- Berle’s shareholder primacy emphasizes managers (legal) fiduciary duty (plight)
towards shareholders
o Investors invest their own funds into a firm
o Investors should get the returns that this money generates
o Important note: back then, the primary shareholders of firms were
employees. Berle was advocating for a stronger accountability (under law)
of directors towards the workers in a firm.
- Dodd views corporation as economic institution with a social service as well as a
profit-making function
o Corporations embedded in society and environment (stakeholder theory)
o Corporations profit from society and environment and need to give
something back
o Corporations receive a license to operate from society (legitimacy theory)
o Corporations’ actions’ impact societies beyond profit generation
(“externalities”)
4
