Unit 5: Mixed questions

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Questions and Answers

What is an example of a certification that encourages corporate sustainability?

ISO 9001
ISO 26000 (correct)
ISO 14000
ISO 50001

Self-regulation is an ineffective approach for companies to ensure sustainability.

False (B)

Name one challenge in solving the tragedy of the commons.

The lack of a world government

The bankers' oath was created to restore _____ in the financial system.

trust Signup and view all the answers

Match the following terms with their descriptions:

Sustainable standards = Protocols aimed at promoting environmentally responsible practices Social pressure = Collective influence exerted by society to encourage corporate accountability Equator Principles = Risk management framework for financing projects Fridays for Future = Youth-led movement demanding climate action Signup and view all the answers

Which of the following factors contributed to the market pressure on automotive companies to innovate?

All of the above (D) Signup and view all the answers

Consumers have a low bargaining power in the automotive market.

False (B) Signup and view all the answers

What was one of the main criticisms faced by WestLB regarding its operations?

Systemic consequences of their operations. Signup and view all the answers

BMW announced to refurbish batteries due to a shortage of ______.

resources Signup and view all the answers

Match the following stakeholders with their potential influence:

Customers = Demand for ethical products NGOs = Advocacy for environmental accountability Shareholders = Demand for profitability World Bank = Economic influence in funding decisions Signup and view all the answers

What principle did WestLB introduce to address stakeholder pressures?

Equator Principles (D) Signup and view all the answers

Urban millennials are increasingly interested in car ownership.

False (B) Signup and view all the answers

What was one of the outcomes after the Ranaplaza disaster for H&M?

Protests demanding accountability. Signup and view all the answers

What does CSR stand for in the context of business sustainability?

Corporate Social Responsibility (D) Signup and view all the answers

Companies feel no pressure to ensure sustainability in their supply chains.

False (B) Signup and view all the answers

What is a significant asset for a company's social evaluation?

Reputation Signup and view all the answers

Major investment funds have announced to completely divest from __________.

fossil fuel Signup and view all the answers

Match the types of responsibilities with their definitions:

Economic responsibility = Do what capitalism requires Legal responsibility = Do what is required by global stakeholders Ethical responsibility = Do what is expected by global stakeholders Philanthropic responsibility = Do what is desired by global stakeholders Signup and view all the answers

What can negatively impact a firm's reputation when involved in sustainability?

Engaging in greenwashing (A) Signup and view all the answers

Only activists put pressure on companies to be socially responsible.

False (B) Signup and view all the answers

What dramatic event occurred in 2010 that impacted BP's reputation?

The Bluewater Horizon platform explosion Signup and view all the answers

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Study Notes

Economic Responsibility: Compliance with capitalist principles.
Legal Responsibility: Adhering to laws set by global stakeholders.
Ethical Responsibility: Meeting the ethical expectations of stakeholders.
Philanthropic Responsibility: Engaging in activities desired by stakeholders.

Importance of Going Beyond Obligations

Reputation: A valuable asset impacting brand value.
Legitimacy: Essential for operational success; lack of legitimacy discourages investments from shareholders and suppliers.

Pressures on Firms

Increased social demand for accountability in supply chains.
Activist and public mobilization are driving forces for sustainability.
Investment funds are divesting from fossil fuels, influencing broader corporate behaviors.
High demand for transparency and sustainability reporting, especially for companies closer to consumers.
Companies showing commitment to sustainability face scrutiny and potential backlash on social media.
Strategic withholding of sustainability certifications to prevent reputational harm.

Spillover Effects

Case of BP: Reputation damaged after the Bluewater Horizon disaster, with long-term impacts on stock prices.
Negative actions of one firm can affect peers, as seen with BP and Shell.

Self-Governance in Corporate Sustainability

Social Movements: Initiatives like Fridays for Future influence corporate practices.
Regulatory Frameworks: Banks established the bankers' oath and Equator Principles for greater accountability.
Certification Standards: ISO standards (e.g., ISO 26000) promote trust but can also raise questions about potential greenwashing.

Institutional Examples for Sustainability

Certifications: Establish standards that encourage sustainable practices.
Resource Scarcity: Highlights necessity for innovation, such as BMW's battery refurbishment initiative.
Government Regulations: Bans on fossil fuel vehicles push firms toward sustainable alternatives.
Market Dynamics: Consumer preferences shifting towards car-sharing services impact automobile ownership models.

Case Analysis: WestLB

WestLB faced systemic scrutiny and accountability for broader environmental impacts.
Stakeholder reactions influenced the bank's response to sustainability issues.

Stakeholders' Perspectives

Diverse Interests: Customers, NGOs, and shareholders hold varying expectations from firms.
Political Dimensions: Stakeholders, including state entities, can shape corporate sustainability discussions.
NGO influence grows when combined with public pressure, shifting corporate strategies from defensive to collaborative approaches.