Chapter 4 pt 2

Question 1

What is a key method for ensuring bottom-up participation in community engagement?

Answer 1

1. Free, Prior, and Informed Consent (FPIC).

Question 2

hat does FPIC mean?

Answer 2

1. Free simply means that there is no manipulation or coercion of the indigenous people and that the process is self-directed by those affected by the project.
2. Prior implies that consent is sought sufficiently in advance of any activities being either commenced or authorized, and time for the consultation process to occur must be guaranteed by the relative agents.
3. Informed suggests that the relevant indigenous people receive satisfactory information on the key points of the project
4. consent means a process in which participation and consultation are the central pillars

Question 3

What are the key points of the project that indigenous people should be informed on?

Answer 3

1. its nature,
2. its size,
3. its pace,
4. its reversibility,
5. the scope of the project,
6. the reason for it, and
7. its duration.

Question 4

Why is informed more difficult part of FPIC?

Answer 4

1. as different groups may find certain information more relevant.
   
   2. The indigenous people should also have access to the primary reports on the economic, environmental, and cultural impact that the project will have.
2. The language used must be able to be understood by the indigenous peopl

Question 5

What is an example of controversial sourcing?

Answer 5

1. case of conflict minerals and blood diamonds, which are natural resources extracted in a conflict zone and sold to perpetuate the fighting.
   
   2. The most prominent contemporary example has been in the eastern provinces of the Democratic Republic of Congo, where various armies, rebel groups, and outside organizations have profited from mining while contributing to violence and exploitation during wars in the region.

Question 6

What is consumer protection?

Answer 6

1. refers to laws and other forms of government regulation designed to protect the rights of consumers.
   
   2. It is based on consumer rights, or the idea that consumers have an inherent right to basic health and safety.

Question 7

How are consumer rights protected?

Answer 7

1. enforcing product safety,
2. distributing consumer-related information, and
3. preventing deceptive marketing.

Question 8

What is product liability

Answer 8

1. the legal responsibility imposed on a business for the manufacturing or selling of defective goods.
2. The laws are built on the principle that manufacturers and vendors have more knowledge about the products than the consumers do.
3. Therefore, these businesses bear the responsibility when things go wrong (even when consumers are somewhat at fault).

Question 9

What are the three main types of product liability?

Answer 9

1. businesses being found liable to consumers when a court finds design flaws,
2. manufacturing defects,
3. a failure to warn consumers of a possible danger

Question 10

What is an example of an index looking at social opportunities?

Answer 10

1. Access to Medicine Index
2. Tool analyses how 20 of world’s largest pharmaceutical companies are addressing access to medicine in 108 low- to middle-income countries for 81 diseases
3. Evaluates in areas such as R&D and pricing

Question 11

What is an investor initiative looking at risks and opps of intensive livestock production?

Answer 11

1. Farm Animal Investment Risk and Return (FAIRR).
2. FAIRR focuses particularly on the increased prevalence of antimicrobial resistance due to intensive farming practices and poor antibiotic stewardship.
3. Companies operating in these ways are more likely to face lawsuits and pressures to change their practices.

Question 12

How should you analyse if a social topic is material?

Answer 12

1. Start with an understanding of materiality at both the geographical and industry level.
2. Once this is established, the company-level exposure can be determined by looking at the sector it operates in and which countries/regions it mostly operates in as well as by considering locations of key suppliers, plants, customers, and main tax jurisdictions.

Question 13

What are two examples of local regulatory frameworks?

Answer 13

1. EU taxonomy for sustainable Activities
2. UK modern slavery act

Question 14

What are the enivornmental objectives that the EU taxonomy set performance thresholds for?

Answer 14

1. climate change mitigation,
2. climate change adaptation,
3. sustainable use and protection of water and marine resources,
4. transition to a circular economy,
5. pollution prevention and control,
6. protection and restoration of biodiversity and ecosystems.

Question 15

What should an activity do to comply with EU taxonomy?

Answer 15

1. should substantially contribute to one of the objectives to become taxonomy-aligned
2. (while doing no significant harm to the other five, where relevant)
3. and should comply with minimum safeguards (e.g., OECD Guidelines on MNEs and the UN Guiding Principles on Business and Human Rights).

Question 16

What does teh UK Modern Slavery Act require?

Answer 16

1. The Modern Slavery Act requires both medium- and large-sized companies to provide a slavery and human trafficking statement each year
2. This sets out the steps taken to ensure modern slavery is not taking place in their business or supply chains.
3. Many of these statements provide not only general information but also specific numerical data, such as the number of audits initiated for suppliers at high risk or the number of suppliers that have established corrective action plans, which can help investors assess materiality.

Question 17

What does the International Organization of Securities Commissions (IOSCO) do?

Answer 17

1. Connects regulators over the world and provides global frameworks to support worldwide standardization, which regulators in each country can use as a basis for their own regulations.

Question 18

what impact could most social issues have on a company?

Answer 18

1. impact a company’s bottom line;
2. increase workforce issues (including supply chain);
3. decrease the corporate responsibility (human rights) and its consumer expectations (e.g., animal welfare

Question 19

Describe concept of double materiality

Answer 19

1. a company should report both on sustainability matters that are
2. (1) financially material in influencing business value
3. (2) “impact material,” which is the impact of the company on the environment and people

Question 20

What can be used assessment of material negative impact?

Answer 20

1. the OECD Due Diligence Guidance for Responsible Business Conduct
2. the UN Guiding Principles on Business and Human Rights

Question 21

What can be used for assessment of positive impacts?

Answer 21

1. reference to the United Nations Sustainable Development Goals are often made.

Question 22

What are examples of poor working conditions at Amazon?

Answer 22

1. Carry out tasks in 38°C heat (100°F) at a warehouse in Pennsylvania, suffered from dehydration and employees collapsed - loading bay doors not opened as concerns over theft
2. Pickers can walk up to 15 miles a day, reprimanded if fall behind their targets- handheld scanners gives real-time info to employees about pace of work
3. 189 suicidal employees from 46 wharehouses between 2013-2018 - employer-imposed social isolation adn aggressive surveillance
4. Announced livable wage in 2018

Question 23

Give examples of poor working conditions at Apple’s suppliers Foxconn and Investec

Answer 23

1. Complex of factories had over 200,000 workers living and working within it, worked more than 60 hour weeks and made $100 per month. Half was required for rent and food from company.
2. 18 contract Foxconn employees attempted suicide- 14 deaths
3. Excessive hours persisted and labor violations reported
4. Stock price dropped linked to Foxconn riots
5. COVID-19 outbreaks and lockdowns coupled with delayed wage and bonus payments caused hundreds of workers to leave the factory on foot: delays in shipments and significant disruptions

Question 24

Describe poor working conditions at Thai Union

Answer 24

Greenpeace accused Thai Union of being “seriously implicated in horrendous human rights and environmental abuses” and warned shareholders and investors “of the financial risks associated with these destructive and harmful practices”.

Question 25

What was the result of Greenpeaces statement about Thai union?

Answer 25

1. led to a loss of revenue as consumers and supermarkets boycotted the products. 2. This led to a required termination of sub-contractors and, in turn, increased transition and future costs 3. Thai Union released new codes of conduct and stated that it had terminated the relationships with 17 suppliers as a result of forced labor or human trafficking violations since the start of 2015 4. Thai Union declared that it would cease working with all shrimp processing sub-contractors by the end of 2015 and bring all shrimp processing operations in-house to enable full oversight. 5. Thai Union and the World Tuna Purse Seine Organization signed a memorandum of understanding to establish a framework to ensure fair labor practices. 6. Thai Union announced it had made an agreement with Greenpeace in which both parties stated that it had made substantial, positive progress on its commitment to implement measures that tackle illegal fishing and overfishing and had also improved the livelihoods of hundreds of thousands of workers throughout its supply chains. 7. Thai Union released its Vessel Code of Conduct, developed in collaboration with Greenpeace and the International Transport Workers’ Federation.

Question 26

What should an investor do once the social factors relevant for the company have been identified?

Answer 26

1. Assess the way the company manages the risks and opportunities associated with these social factors 2. This includes looking at the corporate strategy, policies in place, the processes and measures implemented, performance indicators, and public disclosure.

Question 27

What social factor scenarios can be included in ratio analysis/financial modelling?

Answer 27

1. occupational health and safety issues (accident and fatalities), which can result in huge fines and liabilities; 2. human capital management issues, which can lead to greater operating costs if new employees need to be trained due to high employee turnover; 3. supply chain issues, which can impact brand reputation and revenues if consumers choose to boycott certain products; 4. local protests that lead to business disruptions at plants or factories; and poor working conditions, which can result in issues with product safety.

Question 28

Describe the Goldman Sachs Gender Discrimination Case

Answer 28

1. Goldman Sachs paid over USD200 million to settle a class-action lawsuit relating to lower pay, biased employee performance evaluations and promotions, and gender discrimination. 2. Covered thousands of female employees in US

Question 29

What does section 66 of the UK Equality Act state?

Answer 29

If the terms of A’s work do not (by whatever means) include a sex equality clause, they are to be treated as including one.

Question 30

What effect does a sex equality cause have?

Answer 30

1. If a term of A’s is less favorable to A than a corresponding term of B’s is to B, A’s term is modified so as not to be less favorable. 2. If A does not have a term that corresponds to a term of B’s that benefits B, A’s terms are modified so as to include such a term.

Question 31

What is the Tesco Equal Pay Claim?

Answer 31

1. the company is facing a demand for up to GBP4 billion in back pay from thousands of mainly female shopworkers in what could become the United Kingdom’s largest ever equal pay claim. 2. The retailer is claimed to have breached its duty under Section 66 of the Equality Act 2010 by paying staff in its distribution centers more than those on the shop floor, despite the roles being of “comparable value.”

Question 32

What is tail risk

Answer 32

1. Tail risk refers to the chance of a rare, extreme event happening that lies at the far ends (or “tails”) of a probability distribution. These events are unlikely but can have severe consequences—think financial crashes, natural disasters, or unexpected geopolitical events.