Lecture 1
- Anti profit beliefs (participants made aware -> attenuated)
- Zero sum game (enforced by news environment)
- High purpose clarity (employees find work meaningful) -> higher
return on assets
Lecture 2
- Firm exists when it minimizes transaction costs compared to market
exchanges
- Berle shareholder primacy: managers fiduciary duty towards
shareholders (directors towards workers); those shareholders then
were employees
- Dodd: stakeholder theory (corporations embedded in society and
environment); legitimacy theory (license to operate from society –
need to give something back); externalities
- Shareholder primacy view: profit maximalization (shareholders
should decide what to do with their share of profits); principle-agent
view (manager= agent; principal= shareholders)
o Company has no competitive advantage in socially responsible
actions?
o Governments are well-functioning?
o Impact of socially responsible investment is calculable?
- Stakeholder view: corporate strategy should be aligned with
stakeholders’ interests; capitalism with interconnected relationships
(take responsibility for externalities of the business); stakeholder
interests viewed as an end.
- Align them: actions in favor of stakeholders resonate with higher
profitability and/or actions against stakeholders are punished by
decreases
- CSR can increase CFP by:
o Saving on resources/streamlining processes
o Binding customers/ avoid punishment critical consumers
o Attracting certain employees
o Preventing stricter governmental intervention
o Decreasing risks catastrophic events
o Lower costs of equity and debt
- Mechanisms for link CSP and CFP:
o Cost and risk reduction
o Competitive advantage
o Reputation and legitimacy
o Win-win outcomes
- Porter and Kramer: How CSV can be done (creating shared value):
, o Reconceiving of markets and products (identifying societal
needs + innovating)
o Redefining productivity (reduce packaging/rethinking logistics -
> cost savings)
o Local cluster development (investing in infrastructure and
firms that surround a firm)
- Involves creating economic value that also creates value for society;
competitiveness and health of communities are mutually dependent;
capitalizing these connections economic/societal progress -> power
global growth/redefine capitalism
Lecture 3
- Externalities= cost/benefit caused by economic actor not enjoyed
by that actor
- Sustainability accounting= monetary value on externalities and
accounting for it in firms’ strategy/firm value creation
- Stakeholder value = market capitalization – value of
externalities (net)
o 1: shareholder value (market capitalization)
o 2: negative externalities (environment, people, lobbying)
o 3: positive externalities
o 4: shareholder value net of externalities
o Can these positive externalities be redistributed to address
negatives?
- Impact-weighted accounts (IWAs): assess impact quantitatively
with common denominator; managing impact instead of reporting;
relevant for investors and companies
- Integrated profit & loss: adds value created for all stakeholders in
form of 6 capitals (financial, manufactured, intellectual (intangibles),
social, human and natural) (how do these correspond to ESG?)
- Integrated balance sheet: adds stakeholder value created over a
longer term
- Identification, measurement, comparability, aggregation,
presentation
- Monetization of externalities:
o Judgement and practical challenges
o Fictitious counterfactual quantities
o Selection of reference scenario
- Measurement ESG:
o Environmental easier to quantify -> objective physical
measures
o Social -> heterogenous, moral consensus
o Governance -> process not an outcome
- GHG protocol: scope 1, 2 and 3; issues:
o Measurement error (lack reporting emissions scope 3)
- Anti profit beliefs (participants made aware -> attenuated)
- Zero sum game (enforced by news environment)
- High purpose clarity (employees find work meaningful) -> higher
return on assets
Lecture 2
- Firm exists when it minimizes transaction costs compared to market
exchanges
- Berle shareholder primacy: managers fiduciary duty towards
shareholders (directors towards workers); those shareholders then
were employees
- Dodd: stakeholder theory (corporations embedded in society and
environment); legitimacy theory (license to operate from society –
need to give something back); externalities
- Shareholder primacy view: profit maximalization (shareholders
should decide what to do with their share of profits); principle-agent
view (manager= agent; principal= shareholders)
o Company has no competitive advantage in socially responsible
actions?
o Governments are well-functioning?
o Impact of socially responsible investment is calculable?
- Stakeholder view: corporate strategy should be aligned with
stakeholders’ interests; capitalism with interconnected relationships
(take responsibility for externalities of the business); stakeholder
interests viewed as an end.
- Align them: actions in favor of stakeholders resonate with higher
profitability and/or actions against stakeholders are punished by
decreases
- CSR can increase CFP by:
o Saving on resources/streamlining processes
o Binding customers/ avoid punishment critical consumers
o Attracting certain employees
o Preventing stricter governmental intervention
o Decreasing risks catastrophic events
o Lower costs of equity and debt
- Mechanisms for link CSP and CFP:
o Cost and risk reduction
o Competitive advantage
o Reputation and legitimacy
o Win-win outcomes
- Porter and Kramer: How CSV can be done (creating shared value):
, o Reconceiving of markets and products (identifying societal
needs + innovating)
o Redefining productivity (reduce packaging/rethinking logistics -
> cost savings)
o Local cluster development (investing in infrastructure and
firms that surround a firm)
- Involves creating economic value that also creates value for society;
competitiveness and health of communities are mutually dependent;
capitalizing these connections economic/societal progress -> power
global growth/redefine capitalism
Lecture 3
- Externalities= cost/benefit caused by economic actor not enjoyed
by that actor
- Sustainability accounting= monetary value on externalities and
accounting for it in firms’ strategy/firm value creation
- Stakeholder value = market capitalization – value of
externalities (net)
o 1: shareholder value (market capitalization)
o 2: negative externalities (environment, people, lobbying)
o 3: positive externalities
o 4: shareholder value net of externalities
o Can these positive externalities be redistributed to address
negatives?
- Impact-weighted accounts (IWAs): assess impact quantitatively
with common denominator; managing impact instead of reporting;
relevant for investors and companies
- Integrated profit & loss: adds value created for all stakeholders in
form of 6 capitals (financial, manufactured, intellectual (intangibles),
social, human and natural) (how do these correspond to ESG?)
- Integrated balance sheet: adds stakeholder value created over a
longer term
- Identification, measurement, comparability, aggregation,
presentation
- Monetization of externalities:
o Judgement and practical challenges
o Fictitious counterfactual quantities
o Selection of reference scenario
- Measurement ESG:
o Environmental easier to quantify -> objective physical
measures
o Social -> heterogenous, moral consensus
o Governance -> process not an outcome
- GHG protocol: scope 1, 2 and 3; issues:
o Measurement error (lack reporting emissions scope 3)
