CSR Flashcards by Anton Plesser

What is unlimited abundance ?

The misconception, that fish populations are inexhaustible

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What is the concept of overshoot and collapse ?

When human consumption surpasses the carrying capacity of the environment.
Humans consume more than resources, than earth can replenish

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What is the maximum sustainable yield ?

Largest amount of fish to be harvested, without depleting the population

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What is the tragedy of the commons?

A situation, where every individual has an incentive to consume a resource, but at the expense of every other individuals, with no way to exclude anyone from consuming

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What can be done to escape the tragedy of the commons ?

Centrally enforced solutions
Privatisation
Governing of the commons

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What are centrally enforced solutions

Authorities regulating the use of the recourse through:
-pricing externalities
-setting limits on quantities

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What are problems of centrally enforced solutions ?

Requires:
-knowing payoff function
-non corrupt authorities
-intelligent political decision making

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What is privatisation in the context of tragedy of the commons ?

Transfer of ownership, of shared recourse to private entities, giving exclusive rights.

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What are problems with privatisation ?

-Might postpone but not fully solve the problem (owners can still exploit)
- some commons can’t be privatised (flowing water/atmosphere)
-holdout problem ( individuals refuse to sell their share of recourse= holdout)

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What is governing of the commons in the context of tragedy of the commons?

Creation of an institution, managing the shared recourse.
Creates clear boundaries
Reliable monitoring
Balance of cost an benefits

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What is the problem with governing of the commons ?

It’s difficult to implement for commons transcending national boundaries

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What is the effect of the tragedy of the commons ?

All major global problems are traced back to it
Welfare of world population, at expense of environment
Benefits only to selected companies-burden to everyone

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What is a public policy ?

A plan undertaken by the governments officials to achieve some broad purpose

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What are public policy inputs

External pressures:
-economic and foreign concerns
-voter pressure
-Lobbyist
-interest groups

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What are public policy goals ?

Can be broad or narrow
Can be high minded or self serving

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What are public policy tools ?

-incentives
-penalties

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What are public policy effects ?

Outcomes
Indented or unintended

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What are the three divisions in need of government interference

Market failure (no incentives to spend)
Negative externalities (greenhouse gases
Natural monopoly (no new competitors)

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What environmental regulations are there ?

-Environmental standards
-market based mechanism
-civil and criminal enforcement
-information disclosure

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What are environmental standards ?

Setting standard, prescribing allowed levels of pollution, with compliance controlled by the government

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What are market based mechanism ?

-taxes
-tradable permits
-subsidies

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What is information disclosure ?

-mandating disclosure of emissions and waste
-regulation by embarrassment

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What is civil and criminal enforcement ?

Nom compliance connected to financial penalties
Even criminal liability

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What is the NFRD

Non financial reporting directive

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To which firms does the NFRD apply ?

large companies with more than 500 employees

What do Firms need to report according to the NFRD ?

Environmental protection Social responsibility & treatment of employees Human rights Anti Corruption and bribery Diversity

Is there third party assurance in the NFRD ?

Not mandatory in most countries

How do files need to report according to NFRD?

As part of the annual report Online or pdf

What is the CSRD

Corporate social reporting directive

To what companies does the CSRD apply ?

Companies meeting 2/3 criteria: -250 employees or more -40m turnover -20 mio total assets

What do companies need to report according to CSRD ?

Double materiality (impact on/of firm) Stakeholder topic selection process Reporting in line with sustainable finance disclosure Regulation (SFDR) and EU taxonomy regulation

Is there third party assurance in the CSRD ?

Mandatory: Auditors report Involvement of key audit partner Scope to include EU taxonomy

What are the main differences between the NFRD and the CSRD?

1. applies to wider range of companies 2. more detailed reporting/standards 3. required assurance for reports 4. stronger enforcement though fines

Which firms are affected by the German supply chain due diligence act ?

Companies with more than 3000 employees (2023) and 1000 (2024)

What do Firma need to comply with according to the German supply chain due diligence act ?

Human rights preservation Minamata convention on mercury Stockholm Convention on persistent organic pollutants Extension to Tier n if necessary

What are consequences of non compliance of the German due Diligence act?

Fines Exclusion from public tenders

To what firms does the EU supply chain due diligence act apply ?

LLC with over 500 employees LLC operating in high impact sectors (250 FTE)

What do Firma need to comply to according to the EU supply chain due diligence act ?

Human rights preservation Pollution prevention Paris agreement Across entire supply chain

What are consequences of non compliance with the EU supply chain due diligence act ?

Fines criminal liability Exclusion from public tenders

What are the main differences between the German and the EU supply chain due diligence act ?

More companies (250FTE) More obligations (across hole supply) Higher sanctions and criminal liability Stricter reporting (also a plan)

What are advantages of environmental standards ?

Enforceable in courts Compliance mandatory

What are disadvantages of. environmental standards ?

Large regulatory apparatus required Old plants may have to close Can Restes innovation Fines may be cheaper than compliance Does not improve above compliance

What are advantages of market based mechanism?

Gives flexibility to buisenesses Achieves goals at lower costs Encourage continued improvement Saves jobs by allowing old plants to stay open

What are disadvantages of market based mechanisms ?

Gives license to pollute Enforcement is difficult Permit levels are hard to set Regional imbalances

What are advantages of government incentives ?

Reward responsibility Encourages to exceed minimum

What are disadvantages if government incentives ?

Incentives may not be strong enough

What are advantages of information disclosure?

Little cost for government Companies able to reduce cost efficiently May deter from wrongdoings

What are disadvantages of information disclosure ?

Does not motivate all companies

What does CSR evolve around ?

Economic Ecological Social factors

What’s is CSR

A management concept, in which companies integrate social and environmental concerns in their buisenss operation

What are the 4 steps of the CSR Pyramid ?

Be a good corporate citizen Be ethical Obey the law Be profitable

What is social washing ?

Appearing as more socially responsible than they actually are

What are the four steps to measure and manage impact

Set strategy Integrate Optimise Reinforce

What are the five dimensions of impact ?

1.what are the outcomes of investment 2.who experiences the outcome 3. How much of what outcome is actually occurring 4.contribution in enterprise/investor level 5.risk: how could the outcome turn worse than expected

Name 3 risk types

External risk, (external disruption) Efficiency risk (needed?) Execution risk (not delivered as planned)

What are the five steps to set a SDG strategy ?

1.define purpose 2.identify SDG outcome 3. Prioritise SDG outcomes 4.Set ABC goals 5.define impact thesis

What are ABC goals ?

A-ct to avoid harm B-enefit the stakeholder C-ontribute to solutions

What are the three steps to effectively integrate SDG strategies ?

1.develop mindset 2.decide what to measure 3. Get process in place

What are the three questions to optimise SDG integration ?

What happened Why did it happen What next

What are the three steps to reinforce SDG strategies

Deepen commitment Disclose externally Seek verification

What is the shareholder perspective of buiseness ?

Company has no social responsibility to the public or society only to shareholders

What is the stakeholder perspective

Answer to growing criticism of shareholder perspective Company has broader responsibility to all stakeholders

What is the state of SDGs today ?

Countries where freedom of speech is denied rise 11% of all children are engaged in Labor 95% of countries violate right of strike