week 4

Question 1

what is upstream/downstream activities

Answer 1

upstream: occurs before production
downstream: occurs after production (when company sells product/service)

Question 2

what is short-termism

Answer 2

when investors trade for immediate financial results rather than long term growth/sustainability

Question 3

what are consequences of short termism

Answer 3

• discourages long term investments (require more time and capital)
• lose out on performing better over time
• ignores long term factors (ignores now but ends up costing more in future)

Question 4

what is short -termism impact on the economy

Answer 4

• promotes financial instability
  -adverse long term consequences: offers immediate rewards but has negative impact on long term

Question 5

how does one address short-termism

Answer 5

-regulators address the effects by putting in regulations

Question 6

what are challenges that happen prior to integrating ESG factors

Answer 6

• the belief that ESG investing harms returns
  -the view that fiduciary duty blocks ESG integration
  -Lack of support from investment consultants and advisers

Question 7

what are challenges that happen after integrating ESG factors

Answer 7

-uncertainty in building an esg-focused investment mandate
-high costs and resource constraints for ESG integration
-gap between ESG marketing, commitment and actual performance