CORPORATE ENVIRONMENTAL SOCIAL GOVERNANCE ISSUES

Home > Dictionary HomeDictionary Corporation What Does Corporation Mean? A legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses; that is, a corporation has the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. The most important aspect of a corporation is limited liability. That is, shareholders have the right to participate in the profits, through dividends and/or the appreciation of stock, but are not held personally liable for the company's debts. Read more:

Two-tier corporate hierarchy a) Board of directors - elected by shareholders - internal – inside directors (executive) - external – outside directors (non-executive) - monitor managers (report to owners) - make strategic decisions: which markets to enter/pull off how to finance expansion develop new products acquire / take over new products by buying other companies

b) Management - the CEO – the top manager - involved in day-to day operations - departmental managers (Finance, Production, Marketing, Legal, Research & Development, Distribution.....)

STAKEHOLDER Home > Dictionary HomeDictionary Stakeholder What Does Stakeholder Mean? A party that has an interest in an enterprise or project. The primary stakeholders in a typical corporation are its investors, employees, customers and suppliers. However, modern theory goes beyond this conventional notion to embrace additional stakeholders such as the community, government and trade associations. Read more:

STAKEHOLDERS ECONOMIC ENVIRONMENT economic cycles, international competition FINANCIAL ENVIRONMENT banks, investors REGULATORY ENVIRONMENT government, legislation SOCIAL ENVIRONMENT welfare, ecology BUSINESS ORGANISATION

1. GREEN ACCOUNTING (taking action on climate change) CSR = corporate social responsibility the past: company accountants reported just financial issues Times are changing today: link sustainability measures (environmental and social factors) to the main financial report (direct impact on corporate strategy)

GOALS reduce carbon emissions waste of water usage of water energy other finite resources

Financial change If accountants have figures to measure, they can see how environmental issues affect an organisation’s overall strategy. Sustainability fully embedded in the reporting processes

1. Unit 10: p:42,43 2. The Prince of Wales’s Accounting for Sustainability Project Make a summary on the Prince Wales’s project

2. RESPONSIBLE INVESTING (the criteria that investors use to make investment decisions) Increasing interest in ESG factors (environmental, social and governance factors) CSR – environment, human rights, corporate responsibility Financial factors (the current price to the real value)

GOALS Risk management (assess potential risks, increase profit, limit losses) Adding value to projects rather than price speculation Identify ESG factors at listed companies and integrate these factors into traditional financial analysis Sustainable investments: equities, real-estate – saving energy, renewable energy, regeneration targets: local infrastructure

1. Unit 11: p:46,

3. CORPORATE GOVERNANCE (corporate scandals) Scandals: Enron, Parmelat, Worldcom Satyam Computer Services - IT group Fraud - CEO Ramalinga Raju – undermined the confidence Overstated profits and the value of assets on their books The scam had been carried over years – auditor PwC Sensex Index went down by 7.24 per cent RR pledged his family’s 8-per-cent stake in Satyam to lenders, lenders started selling off the shares – the share price collapsed The consequence: the government made corporate disclosure requirements stricter

1. Unit 12: p:50,