ESG part 2 Flashcards
Identify and describe the high-level shift in management thinking
Shift from Pre to Post industrial revolution
Empty world (abundance of G/S from nature ⇒ Full world (increasing scarcity of resources)
Short term:
Prioritize maximizing short term profits for shareholders
Efficiency at all costs
Reductionists and private decision making
Long term:
Prioritize maximizing long term results for all stakeholders
Resilience and balance
Integrative and transparent decision making
Identify and describe how the role of Indigenous Peoples has changed
- Human systems are a part of and must remain in balance with ecosystems
- Their practices were ignored during/after industrial revolution
- Due to the reconciliation with indigenous peoples and preservation of ecosystems, the science communities started to ‘listen’ to their knowledge
Canadian Example:
Management of parks ⇒ focused on needs of recreationists/government revenue and not health and well being of nature
Indigenous peoples forced to relocate and drop practices critical to biological diversity
4 Principles Managers Need to Use:
- COMMIT to ESG as part of the core business
- COMMERCIALIZE by integrating ESG into profitable business areas (sustainable practices/production)
- GET UNCOMFORTABLE by challenging existing business models/practices
- COOPERATE beyond competition to address broader ESG challenges
Sustainable Procurement:
Collaborating with their suppliers to improve the way supply chain management affects people’s lives and the environment
Committing to a just transition to sustainability
Why do people work?
- Belonging, meaning, purpose, self actualization, support for whole self authenticity
- No longer a transactional model
If they leave → they quiet quit - Physically theorem but mentally don’t want to be
Why the shift? (why)
- Loyalty has decreased both sides
- Significant demographic shift → new demo has different values
- Pandemic increased feelings of isolation and loneliness → which has made people want to belong now more than ever
Where do people work?
- Hybrid model with valuable opportunities to collab and bond
- Must be customized to support each companies areas/needs
Why the shift? (where)
- Provides more flexibility
- People may be more productive or equally as productive at home
- Covid introduced this structure and people got used to it
How do people work?
Leverage tech for communications and productivity while ensuring equitable access
Consider how to foster seamless work alongside AI
Demand improved interpersonal skills
Why the shift? (how)
Nature of work being done
Technology
Demographic shifts
Pandemic
What are the 4 Freedoms?
- Freedom to be
- Freedom to become
- Freedom to fade
- Freedom to fail
Freedom to be
supporting authenticity and belonging at work
Example: an employee wears traditional culture attire or shares aspects of their heritage during team events/presentations, and its embraced/respected by colleagues
Freedom to become
supporting employees growth and career progression
Example: a junior staff member from an underrepresented group is paired with a mentor and offered leadership training as part of a development program aimed as building diverse future leaders
Freedom to fade
letting employees step back or take a break when needed without negative consequences
Example: an employee going through a mental health challenge takes a leave of absence and returns without being penalized from future opportunities
Freedom to fail
encouraging a culture where making mistakes is viewed as a part of learning and growth
Example: a team member experiments with a new strategy that does not work → instead of being blamed, their team holds a learning review to identify takeaways and supports them in trying again with adjustments
Governance:
- G is HOW the other aspects get done, measured, and advanced
- Ineffective corporate governance leads to breaches in companies ability to meet E and S goals
- Corporate governance affects integrity of all ESG disclosures ⇒ determining whether ESG metrics are ethically pursued and reported
- Essential in ensuring ESG strategies translate into concrete action
Social → DEI
- Most individuals in charge of programs are unaware of navigating the world without privilege
- Senior leaders are looking for an easy solution to complex problems (ex. Focus only on talent pipelines when they also need to tackle entry barries)
Governance and social → executive compensation
Incentives to compensate based on financial results leads to the CEO taking actions that boat the short-term stock price at the expense of long term value
