Podcast
Questions and Answers
According to the World Bank in 2017, natural disasters cost 520$ billion a year.
According to the World Bank in 2017, natural disasters cost 520$ billion a year.
True
The EU directive has led to more thorough scrutiny and wider stakeholder expectations on corporate responsibility in the last ten years.
The EU directive has led to more thorough scrutiny and wider stakeholder expectations on corporate responsibility in the last ten years.
True
Since 1970, wildlife populations have fallen by 60%.
Since 1970, wildlife populations have fallen by 60%.
True
$21-$32 trillion of global private financial wealth have been invested virtually tax-free through more than 80 offshore secrecy jurisdictions (Henry, 2012).
$21-$32 trillion of global private financial wealth have been invested virtually tax-free through more than 80 offshore secrecy jurisdictions (Henry, 2012).
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Guidance Sustainability reporting by Hemtex is based on the GRI index.
Guidance Sustainability reporting by Hemtex is based on the GRI index.
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The TCFD framework emphasizes the importance of understanding the potential financial impacts of climate change.
The TCFD framework emphasizes the importance of understanding the potential financial impacts of climate change.
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The demand for sustainability reporting is decreasing according to the EY 2017 study.
The demand for sustainability reporting is decreasing according to the EY 2017 study.
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Assurance of sustainability reports is mandatory for all organizations.
Assurance of sustainability reports is mandatory for all organizations.
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The study 'Is your nonfinancial performance revealing the true value of your business to investors' was conducted by EY in 2017.
The study 'Is your nonfinancial performance revealing the true value of your business to investors' was conducted by EY in 2017.
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The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
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The study conducted by Merrill Lynch in 2017 suggests that companies may manipulate their sustainability reporting to conceal negative societal or environmental impacts.
The study conducted by Merrill Lynch in 2017 suggests that companies may manipulate their sustainability reporting to conceal negative societal or environmental impacts.
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The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
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The variable $CEOOWNit$ has a statistically significant negative effect on environmental performance.
The variable $CEOOWNit$ has a statistically significant negative effect on environmental performance.
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The F-statistic of model 1 is 12.05, while the adjusted R-squared is 0.425.
The F-statistic of model 1 is 12.05, while the adjusted R-squared is 0.425.
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The year fixed effects are included in all models.
The year fixed effects are included in all models.
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The study 'What Determines Environmental Performance' was conducted by Hassel, Kallunki and Nilsson in 2015.
The study 'What Determines Environmental Performance' was conducted by Hassel, Kallunki and Nilsson in 2015.
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The World Commission on Environment and Development provided a definition of sustainable development.
The World Commission on Environment and Development provided a definition of sustainable development.
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A4S, Accounting for Sustainability, provided a definition of sustainable business.
A4S, Accounting for Sustainability, provided a definition of sustainable business.
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BHP Billiton's sustainable development strategy only includes a business dimension.
BHP Billiton's sustainable development strategy only includes a business dimension.
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There are three approaches to CSR value creation: cost-concerned, value creation, and sustainability schools.
There are three approaches to CSR value creation: cost-concerned, value creation, and sustainability schools.
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Orlitzky et al., Margolis et al., Malik, and Wang et al. have provided evidence supporting CSR's positive impact on financial performance.
Orlitzky et al., Margolis et al., Malik, and Wang et al. have provided evidence supporting CSR's positive impact on financial performance.
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According to Wang et al., the impact of CSR on financial performance is stronger in developing economies.
According to Wang et al., the impact of CSR on financial performance is stronger in developing economies.
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Flammer and Ioannou found that companies that sustained R&D and CSR post-2008 financial crisis performed worse.
Flammer and Ioannou found that companies that sustained R&D and CSR post-2008 financial crisis performed worse.
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Sustainable Responsible Investing (SRI) does not consider CSR (ESG) factors in the investment process.
Sustainable Responsible Investing (SRI) does not consider CSR (ESG) factors in the investment process.
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One of the motives behind SRI is risk management.
One of the motives behind SRI is risk management.
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There are only two views on CSR as an investment case: reputational benefits and operating efficiency.
There are only two views on CSR as an investment case: reputational benefits and operating efficiency.
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There are three academic hypotheses on ESG factors in the market: Neglect Hypothesis, Errors-in-Expectations Hypothesis, and Irrelevance Hypothesis.
There are three academic hypotheses on ESG factors in the market: Neglect Hypothesis, Errors-in-Expectations Hypothesis, and Irrelevance Hypothesis.
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Investors who go against social norms may face challenges in selling stocks due to less liquidity, heightened litigation, and regulatory risks.
Investors who go against social norms may face challenges in selling stocks due to less liquidity, heightened litigation, and regulatory risks.
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Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
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Information on environmental, social, and governance (ESG) factors is not relevant for stock pricing and valuation.
Information on environmental, social, and governance (ESG) factors is not relevant for stock pricing and valuation.
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Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
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Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
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ESG analysis does not face challenges related to insufficient comparability of ESG metrics, time lags in disclosure, and risks of greenwashing.
ESG analysis does not face challenges related to insufficient comparability of ESG metrics, time lags in disclosure, and risks of greenwashing.
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Theories explaining the level of voluntary sustainability reporting include only stakeholder theory and agency theory.
Theories explaining the level of voluntary sustainability reporting include only stakeholder theory and agency theory.
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Motivations for non-financial reporting do not include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
Motivations for non-financial reporting do not include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
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Corporate Responsibility reporting has not become mainstream due to EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
Corporate Responsibility reporting has not become mainstream due to EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
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The Global Reporting Initiative (GRI) has not developed a comprehensive Sustainability Reporting Framework for measuring and reporting economic, environmental, social, and governance performance.
The Global Reporting Initiative (GRI) has not developed a comprehensive Sustainability Reporting Framework for measuring and reporting economic, environmental, social, and governance performance.
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GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
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Materiality analysis is not a crucial aspect of non-financial reporting.
Materiality analysis is not a crucial aspect of non-financial reporting.
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According to IPCC, we have 12 years to limit climate change catastrophe.
According to IPCC, we have 12 years to limit climate change catastrophe.
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The cost of natural disasters is estimated to be $520 billion a year based on World Bank's data from 2017.
The cost of natural disasters is estimated to be $520 billion a year based on World Bank's data from 2017.
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Air pollution is projected to cause 6-9 million premature deaths by 2060, according to OECD's report from 2016.
Air pollution is projected to cause 6-9 million premature deaths by 2060, according to OECD's report from 2016.
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Since 1970, wildlife populations have declined by 60%, as reported by WWF in 2018.
Since 1970, wildlife populations have declined by 60%, as reported by WWF in 2018.
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Assurance of sustainability reports is mandatory for all organizations.
Assurance of sustainability reports is mandatory for all organizations.
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The TCFD framework emphasizes the importance of understanding the potential financial impacts of climate change.
The TCFD framework emphasizes the importance of understanding the potential financial impacts of climate change.
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The demand for sustainability reporting is decreasing according to the EY 2017 study.
The demand for sustainability reporting is decreasing according to the EY 2017 study.
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The variable $CEOOWNit$ has a statistically significant negative effect on environmental performance.
The variable $CEOOWNit$ has a statistically significant negative effect on environmental performance.
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The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
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The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
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The study conducted by Merrill Lynch in 2017 suggests that companies may manipulate their sustainability reporting to conceal negative societal or environmental impacts.
The study conducted by Merrill Lynch in 2017 suggests that companies may manipulate their sustainability reporting to conceal negative societal or environmental impacts.
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The Global Reporting Initiative (GRI) has not developed a comprehensive Sustainability Reporting Framework for measuring and reporting economic, environmental, social, and governance performance.
The Global Reporting Initiative (GRI) has not developed a comprehensive Sustainability Reporting Framework for measuring and reporting economic, environmental, social, and governance performance.
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The study 'What Determines Environmental Performance' was conducted by Hassel, Kallunki and Nilsson in 2015.
The study 'What Determines Environmental Performance' was conducted by Hassel, Kallunki and Nilsson in 2015.
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The F-statistic of model 1 is 12.05, while the adjusted R-squared is 0.425.
The F-statistic of model 1 is 12.05, while the adjusted R-squared is 0.425.
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The EU directive has led to more thorough scrutiny and wider stakeholder expectations on corporate responsibility in the last ten years.
The EU directive has led to more thorough scrutiny and wider stakeholder expectations on corporate responsibility in the last ten years.
Signup and view all the answers
The World Commission on Environment and Development provided a definition of sustainable development.
The World Commission on Environment and Development provided a definition of sustainable development.
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Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
Signup and view all the answers
Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
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Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
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The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
Signup and view all the answers
Materiality analysis is a crucial aspect of non-financial reporting, as demonstrated by the example of Ericsson's sustainability reporting.
Materiality analysis is a crucial aspect of non-financial reporting, as demonstrated by the example of Ericsson's sustainability reporting.
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Investors who go against social norms face challenges in sharing risk and selling stocks due to less liquidity, heightened litigation, and regulatory risks.
Investors who go against social norms face challenges in sharing risk and selling stocks due to less liquidity, heightened litigation, and regulatory risks.
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Motivations for non-financial reporting include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
Motivations for non-financial reporting include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
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Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
Signup and view all the answers
GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
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Investors who go against social norms may face challenges in selling stocks due to less liquidity, heightened litigation, and regulatory risks.
Investors who go against social norms may face challenges in selling stocks due to less liquidity, heightened litigation, and regulatory risks.
Signup and view all the answers
The demand for sustainability reporting is decreasing according to the EY 2017 study.
The demand for sustainability reporting is decreasing according to the EY 2017 study.
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The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
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Sustainable Responsible Investing (SRI) does not consider CSR (ESG) factors in the investment process.
Sustainable Responsible Investing (SRI) does not consider CSR (ESG) factors in the investment process.
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Various views on CSR as an investment case include reputational benefits, operating efficiency, and cost of capital.
Various views on CSR as an investment case include reputational benefits, operating efficiency, and cost of capital.
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The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
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The World Commission on Environment and Development provided a definition of sustainable development.
The World Commission on Environment and Development provided a definition of sustainable development.
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Companies that sustained R&D and CSR post-2008 financial crisis performed better, according to Flammer and Ioannou.
Companies that sustained R&D and CSR post-2008 financial crisis performed better, according to Flammer and Ioannou.
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The impact of CSR on financial performance is stronger in advanced economies, according to Wang et al.
The impact of CSR on financial performance is stronger in advanced economies, according to Wang et al.
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The study 'Is your nonfinancial performance revealing the true value of your business to investors' was conducted by EY in 2017.
The study 'Is your nonfinancial performance revealing the true value of your business to investors' was conducted by EY in 2017.
Signup and view all the answers
Sustainable Responsible Investing (SRI) considers CSR (ESG) factors in the investment process.
Sustainable Responsible Investing (SRI) considers CSR (ESG) factors in the investment process.
Signup and view all the answers
There are three academic hypotheses on ESG factors in the market: Neglect Hypothesis, Errors-in-Expectations Hypothesis, and Irrelevance Hypothesis.
There are three academic hypotheses on ESG factors in the market: Neglect Hypothesis, Errors-in-Expectations Hypothesis, and Irrelevance Hypothesis.
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Various definitions of Corporate Social Responsibility (CSR) are provided by EU, Carroll, Hopkins, and Friedman.
Various definitions of Corporate Social Responsibility (CSR) are provided by EU, Carroll, Hopkins, and Friedman.
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Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
Signup and view all the answers
A4S, Accounting for Sustainability, provided a definition of sustainable business.
A4S, Accounting for Sustainability, provided a definition of sustainable business.
Signup and view all the answers
Natural disasters cost 520$ billion a year based on World Bank's data from 2017.
Natural disasters cost 520$ billion a year based on World Bank's data from 2017.
Signup and view all the answers
Air pollution is projected to cause 6-9 million premature deaths by 2060, according to OECD's report from 2016.
Air pollution is projected to cause 6-9 million premature deaths by 2060, according to OECD's report from 2016.
Signup and view all the answers
Since 1970, wildlife populations have declined by 60%, as reported by WWF in 2018.
Since 1970, wildlife populations have declined by 60%, as reported by WWF in 2018.
Signup and view all the answers
$21-$32 trillion of global private financial wealth have been invested virtually tax-free through more than 80 'offshore' secrecy jurisdictions, as stated by Henry in 2012.
$21-$32 trillion of global private financial wealth have been invested virtually tax-free through more than 80 'offshore' secrecy jurisdictions, as stated by Henry in 2012.
Signup and view all the answers
Is sustainability reporting by Hemtex based on the GRI index?
Is sustainability reporting by Hemtex based on the GRI index?
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The TCFD framework emphasizes the importance of understanding the potential financial impacts of climate change.
The TCFD framework emphasizes the importance of understanding the potential financial impacts of climate change.
Signup and view all the answers
Assurance of sustainability reports is mandatory for all organizations.
Assurance of sustainability reports is mandatory for all organizations.
Signup and view all the answers
The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
The variable $BCRIMEit$ has a statistically significant negative effect on environmental performance.
Signup and view all the answers
The study 'What Determines Environmental Performance' was conducted by Hassel, Kallunki and Nilsson in 2015.
The study 'What Determines Environmental Performance' was conducted by Hassel, Kallunki and Nilsson in 2015.
Signup and view all the answers
The demand for sustainability reporting is decreasing according to the EY 2017 study.
The demand for sustainability reporting is decreasing according to the EY 2017 study.
Signup and view all the answers
Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
Signup and view all the answers
One of the motives behind SRI is risk management.
One of the motives behind SRI is risk management.
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The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
The independent assurance service involves a three-party relationship between management, users, and the professional accountant.
Signup and view all the answers
GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
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A4S, Accounting for Sustainability, provided a definition of sustainable business.
A4S, Accounting for Sustainability, provided a definition of sustainable business.
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The World Commission on Environment and Development provided a definition of sustainable development.
The World Commission on Environment and Development provided a definition of sustainable development.
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Corporate Social Responsibility (CSR) is a widely accepted concept with a universally agreed-upon definition.
Corporate Social Responsibility (CSR) is a widely accepted concept with a universally agreed-upon definition.
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Sustainable Responsible Investing (SRI) always considers CSR (ESG) factors in the investment process.
Sustainable Responsible Investing (SRI) always considers CSR (ESG) factors in the investment process.
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There are only two approaches to CSR value creation: cost-concerned and value creation schools.
There are only two approaches to CSR value creation: cost-concerned and value creation schools.
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The impact of CSR on financial performance is stronger in developing economies, according to Wang et al.
The impact of CSR on financial performance is stronger in developing economies, according to Wang et al.
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Motives behind SRI do not include risk management as a factor.
Motives behind SRI do not include risk management as a factor.
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The Neglect Hypothesis, Errors-in-Expectations Hypothesis, and Irrelevance Hypothesis are the only academic hypotheses on ESG factors in the market.
The Neglect Hypothesis, Errors-in-Expectations Hypothesis, and Irrelevance Hypothesis are the only academic hypotheses on ESG factors in the market.
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BHP Billiton's sustainable development strategy includes only a business dimension.
BHP Billiton's sustainable development strategy includes only a business dimension.
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The demand for sustainability reporting is decreasing, according to the EY 2017 study.
The demand for sustainability reporting is decreasing, according to the EY 2017 study.
Signup and view all the answers
The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework for measuring and reporting economic, environmental, social, and governance performance.
The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework for measuring and reporting economic, environmental, social, and governance performance.
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Short-term performance focus and fixation on quarterly earnings never lead to the oversight of long-term benefits of ESG projects.
Short-term performance focus and fixation on quarterly earnings never lead to the oversight of long-term benefits of ESG projects.
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The TCFD framework does not emphasize the importance of understanding the potential financial impacts of climate change.
The TCFD framework does not emphasize the importance of understanding the potential financial impacts of climate change.
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Assurance of sustainability reports is mandatory for all organizations.
Assurance of sustainability reports is mandatory for all organizations.
Signup and view all the answers
Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
Signup and view all the answers
The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
Signup and view all the answers
Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
Signup and view all the answers
Motivations for non-financial reporting include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
Motivations for non-financial reporting include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
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Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
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Theories explaining the level of voluntary sustainability reporting include stakeholder theory, legitimacy theory, positive accounting theory, agency theory, and voluntary disclosure theory.
Theories explaining the level of voluntary sustainability reporting include stakeholder theory, legitimacy theory, positive accounting theory, agency theory, and voluntary disclosure theory.
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Information on environmental, social, and governance (ESG) factors is relevant for stock pricing and valuation, but there are challenges in using this information effectively.
Information on environmental, social, and governance (ESG) factors is relevant for stock pricing and valuation, but there are challenges in using this information effectively.
Signup and view all the answers
Investors who go against social norms face challenges in sharing risk and selling stocks due to less liquidity, heightened litigation, and regulatory risks.
Investors who go against social norms face challenges in sharing risk and selling stocks due to less liquidity, heightened litigation, and regulatory risks.
Signup and view all the answers
Challenges in ESG analysis include insufficient comparability of ESG metrics, time lags in disclosure, and risks of greenwashing.
Challenges in ESG analysis include insufficient comparability of ESG metrics, time lags in disclosure, and risks of greenwashing.
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Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
Signup and view all the answers
The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
Signup and view all the answers
Materiality analysis is a crucial aspect of non-financial reporting, as demonstrated by the example of Ericsson's sustainability reporting.
Materiality analysis is a crucial aspect of non-financial reporting, as demonstrated by the example of Ericsson's sustainability reporting.
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Study Notes
Investment Strategies and Non-Financial Reporting
- Investors who go against social norms face challenges in sharing risk and selling stocks due to less liquidity, heightened litigation, and regulatory risks.
- Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
- Information on environmental, social, and governance (ESG) factors is relevant for stock pricing and valuation, but there are challenges in using this information effectively.
- Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
- Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
- Challenges in ESG analysis include insufficient comparability of ESG metrics, time lags in disclosure, and risks of greenwashing.
- Theories explaining the level of voluntary sustainability reporting include stakeholder theory, legitimacy theory, positive accounting theory, agency theory, and voluntary disclosure theory.
- Motivations for non-financial reporting include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
- Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
- The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
- GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
- Materiality analysis is a crucial aspect of non-financial reporting, as demonstrated by the example of Ericsson's sustainability reporting.
Corporate Social Responsibility and Sustainable Responsible Investing
- Definition of sustainable development by The World Commission on Environment and Development
- Definition of sustainable business by A4S, Accounting for Sustainability
- Various definitions of Corporate Social Responsibility (CSR) by EU, Carroll, Hopkins, and Friedman
- BHP Billiton's sustainable development strategy includes a business and sustainability dimension
- Two approaches to CSR value creation: cost-concerned and value creation schools
- Evidence supporting CSR's positive impact on financial performance by Orlitzky et al., Margolis et al., Malik, and Wang et al.
- Impact of CSR on financial performance is stronger in advanced economies, according to Wang et al.
- Companies that sustained R&D and CSR post-2008 financial crisis performed better, Flammer and Ioannou
- Sustainable Responsible Investing (SRI) considers CSR (ESG) factors in the investment process
- Motives behind SRI vary widely, including risk management, personal values, financial outperformance, and social/environmental impact
- Various views on CSR as an investment case, including reputational benefits, operating efficiency, and cost of capital
- Academic hypotheses on ESG factors in the market: Neglect Hypothesis, Errors-in-Expectations Hypothesis, and Irrelevance Hypothesis
Investment Strategies and Non-Financial Reporting
- Investors who go against social norms face challenges in sharing risk and selling stocks due to less liquidity, heightened litigation, and regulatory risks.
- Neglected stocks may have higher returns as compensation for additional risks, as shown in various studies across regions and periods.
- Information on environmental, social, and governance (ESG) factors is relevant for stock pricing and valuation, but there are challenges in using this information effectively.
- Short-term performance focus and fixation on quarterly earnings lead to the oversight of long-term benefits of ESG projects.
- Strong-ESG portfolios may yield relatively higher returns, even after correcting for portfolio risk.
- Challenges in ESG analysis include insufficient comparability of ESG metrics, time lags in disclosure, and risks of greenwashing.
- Theories explaining the level of voluntary sustainability reporting include stakeholder theory, legitimacy theory, positive accounting theory, agency theory, and voluntary disclosure theory.
- Motivations for non-financial reporting include reducing information asymmetry, signaling credibility, and avoiding costly repercussions.
- Corporate Responsibility reporting has become mainstream, driven by EU directives, sustainable finance legislation, and reporting frameworks and initiatives.
- The Global Reporting Initiative (GRI) has developed a comprehensive Sustainability Reporting Framework, widely used for measuring and reporting economic, environmental, social, and governance performance.
- GRI standards emphasize stakeholder focus, reporting principles such as stakeholder inclusiveness, sustainability context, materiality, and quality.
- Materiality analysis is a crucial aspect of non-financial reporting, as demonstrated by the example of Ericsson's sustainability reporting.
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Description
Test your knowledge of Investment Strategies and Non-Financial Reporting with this quiz. Explore the challenges and benefits of ESG factors in stock pricing, theories behind sustainability reporting, motivations for non-financial reporting, and the impact of reporting frameworks and initiatives.
