Social Factors

Question 1

Social Megatrends

Answer 1

long-term social changes that affect governments, societies and economies permanently over a long period of time.

globalization
automation and artificial intelligence AI
Inequality and wealth creation
digital disruption, social media and access to electronic devices
changes to work, leisure time and education
changes to individual rights and responsibilities and family structures
changing demographics, including health and longevity
urbanization
religion

Question 2

Environmental megatrends have several social impact:

Answer 2

climate change and transition risks
water scarcity
mass migration

Question 3

Globalization

Answer 3

growth in global interactions has increased international trade and the exchange of ideas and culture.

caused by rapid increase in cross-border movement of goods, services, tech, people and capital.

Question 4

implication of globailization:

Answer 4

• offshoring
  cheap clothes made in asian countries, disappearance of textile industry in western countries
• dependency
  US-based and Asian companies dominate the industry for mobile phones, computers and other IT products, European countries are more dependent on these suppliers.

Question 5

Automation and artificial intelligence AI

Answer 5

biggest advantages of automation in industry:

a. associated with faster production and lower labour cost
b. replaces hard, physical or monotonous work

disasdv: displaces workers due to job replacement

AI significant effect on sectors such as:
health
automotive
financial services and auditing
security 
creative ads and video games

Question 6

Inequality and wealth creation

Answer 6

limits total economic growth as
educational opp. and social mobility maybe reduced resulting in a less skilled and less healthy society with lower ppp among the lower and middle classes.

Question 7

digital disruption

Answer 7

change that occurs when new digital technologies and business models affect the value proposition of existing goods and services

Question 8

Urbanization increase implication for societies

Answer 8

economic: increase in costs, often pricing the local working class out of the market
environmental: existence of urban heat islands, where urban areas produce and retain heat, becomes a growing concern
social: increased mortality from non-communicable diseases associated with lifestyle

Question 9

starting point when implementing social factors in investment decision:

Answer 9

1. to determine which social factors are most controversial or financially material in each industry
2. can assess how exposed certain companies are to these sector-specific social factors and if and how the company manages these risks
3. investors should assess critical social factors in the supply chain

Question 10

social factos impact internal stakeholders

Answer 10

human capital development

working conditions, health and safety

human rights

employment standards and labor rights

Question 11

social factors that impact external stakeholders

Answer 11

stakeholder opposition and controversial sourcing

product liability and consumer protection

social opportunities

animal welfare and antimicrobial resisitance

Question 12

human capital development

internal social factors

Answer 12

ensures that workforce:

1. well equipped for performing its tasks and responsibilities
2. operates under the latest standards and regulations
3. remains motivated

Question 13

human rights

Answer 13

apply to all 
race
sex
nationality
ethnicity
language
religion or any other status

Question 14

Human rights include include

Answer 14

1. the right to life and liberty
2. freedom from slavery and torture
3. freedom of opinion and expression
4. the right to work and education

Question 15

Universal Declaration of human rights UDHRR

Answer 15

Most important foundation for international human rights

Question 16

UN Guiding Principles and OECD Guidelines for Multinational Enterprises

Answer 16

direct effect on companies and investors:

• the United Nations Guiding Principles on Business and Human Rights (UNGPs)
• the OECD Guidelines for Multinational Enterprises (MNEs)

Question 17

UNGPs

the United Nations Guiding Principles on Business and Human Rights

Answer 17

are a set of guidelines implementing the United Nations’ Protect, Respect and Remedy framework on the issue of human rights and transnational corporations and other business enterprises.

these guiding principles provided the first global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity.

Question 18

UNGPs encompass three pillars outlining how states and businesses should implement the framework:

the United Nations Guiding Principles on Business and Human Rights

Answer 18

1. the state duty to protect human rights
2. the corporate responsibility to respect human rights
3. access to remedy for victims of business-related abuses

Question 19

OECD Guidelines for Multinational Enterprises

Answer 19

are a comprehensive set of government-backed recommendations on responsible business conduct.

gov’t adhering to the Guidelines aim to encourage and maximise the positive impact MNEs can make to sustainable development and enduring social progress.

voluntary principles and standards:

employment and industrial relations
human rights
environment
information disclosure
combating bribery
consumer interests
 science and technology
competition
taxation

Question 20

Responsible Business Conduct for Institutional Investors

Answer 20

helps institutional investors implement the due diligence recommendation of the OECD Guidelines for MNEs in order to prevent or address adverse impacts related to human and labor rights, the environment and corruption in their investment portfolios.

Question 21

Responsible investment agreement Netherlands

Answer 21

investors agree to adopt this double materiality approach, follow the OECD guidelines and take responsibility to try to mitigate the negative impact of their investments.

Question 22

Corporate Human Right Benchmark CHRB

Answer 22

is a collaboration led by investors and civil society organization dedicated to creating the 1st open and public benchmark of corporate human rights performance.

provides a comparative snapshot year-on-year of the largest companies on the planet, looking at the policies, processes and practices they have in place to systematize their human rights approach and how they respond the serious allegations.

Question 23

CHRB measurement themes and indicators, themes consist of multiple questions:

Answer 23

1. governance and policy commitment
2. embedding respect and human rights due diligence
3. remedies and grievance mechanisms
4. performance - company human rights practices
5. performance - responses to serious allegations
6. transparency

Question 24

the most important labor rights have been summarized in

Answer 24

International Labour Standards

aimed at promoting opportunities for women and men to obtain decent and productive work, in terms of freedom, equity, security and dignity, and are included in the fundamental conventions of the International Labour Ogranization ILO, include:

1. freedom of association and protection of the right to organize
2. right to organize and collective bargaining
3. forced labour and abolition of forced labour
4. minimum age
5. worst forms of child labour
6. equal remuneration
7. discrimination (employment and occupation)

Question 25

forced balour is defined by the ILO | International Labour Ogranization

Answer 25

All work or service which is exacted from any person under the menace 威胁 of any penalty and for which the said person has not offered himself voluntarily.

Question 26

Platform living wage financials PLWF

Answer 26

coalition of financial institutions that encourage and monitor investee companies to address the non-payment of a living wage in their global supply chains - measure their performance on living wage - discuss the assessment result - support innovative pilots

Question 27

A way to establish bottom-up participation is to

Answer 27

Free Prior Informed Consent FPIC developments on ancestral land or the use of resources of a territory owned by indigenous people. Free - no manipulation or coercion 强迫 of the indigenous people原住民 and that the process is self-directed by those affected by the project 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 Informed- suggests that the relevant indigenous people receive satisfactory information on the key points of the project such as: its nature, size, pace, reversibility, the scope of the project, the reason for it, and its duration. Consent- a process in which participation and consultation are the central pillars

Question 28

Consumer protection

Answer 28

refers to laws and other forms of government regulation designed to protect the rights of consumers. safeguarded by: - enforcing product safety - distributing consumer-related information - preventing deceptive marketing

Question 29

product liability

Answer 29

legal responsibility imposed on a business for the manufacturing or selling of defective goods 3 main types: 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 30

Sustainable Development Goals SDGs

Answer 30

focus on lack of social opportunities, especially in developing countries, is an important social issue,

Question 31

Access to Medicine Index

Answer 31

analyze how 20 of the world's largest pharmaceutical companies are addressing access to medicine in 106 low-to-middle-income countries for 82 diseases.

Question 32

Farm Animal Investment Risk and Return FAIRR

Answer 32

focus on the increased prevalence of antimicrobial resistance due to intensive farming practices and poor antibiotic stewardship.

Question 33

EU taxonomy for sustainable activities complying with minimum safeguards

Answer 33

it sets performance thresholds for economic activities that make a substantive contribution to one of six environmental objective: 1. climate change mitigation 2. climate change adaptation 3. sustainable 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 34

different elements of the EU taxonomy screening

Answer 34

sustaintially contribute ( to at least 1/6 environmental objectives as defined in the Regulation) + Do no significant harm (to any of the other five environmental objective as defined in the proposed Regulation) + Comply with minimum safeguards

Question 35

The International Organization of Securities Commissions IOSCO

Answer 35

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

Question 36

Most social issues on a company level:

Answer 36

1. impact a company's bottom line 2. increase workforce issues 3. decrease the corporate responsibility and its consumer expectations

Question 37

materiality or risk assessment

Answer 37

1 step: | determine the impact of social factors and trends could be on the investee companies in the diff. sectors,

Question 38

Qualify potential social factor impact using ratio analysis and financial modelling:

Answer 38

scenarios: 1. occupational health and safety issues, 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 of factories 5. poor working conditions, which can result in issues with product safety.

Question 39

sex equality clause has the following effect:

Answer 39

- 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. - 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 included such a term.

Question 40

social factors for a particular company compare to its peers for:

Answer 40

1. corp. strategy 2. policies in place 3. process and measures implemented 4. performance indicators 5. public disclosure process involves looking at 1. current performance 2. progress over time 3. how that progress compares to industry averages and key competitors

Question 41

income inequality over the last few decades

Answer 41

has been growing, negative effect on the economy