Lecture 6, 7
The CSRD is an ... of the existing Non-Financial Reporting Directive (NFRD), aimed at ...
extension and enhancement, improving and standardizing the sustainability information companies disclose
Key components of CSRD (4)
1. Materiality Analysis
2. Sustainability KPI's
3. Value Chain Information
4. European Sustainability Reporting Standards
Challanges of CSRD (3)
1. Complexity and integration
2. Data availability and quality
3. Gap Analysis
The EU Taxonomy is a ... It aims to
classification system establishing a list of environmentally sustainable economic activities, direct investments towards projects and activities that are truly sustainable
Five ways in which ESG creates value
1. TOP-Line growth
2. Cost reductions
3. Regulatory and legal interventions
4. Productivity uplift
5. Investment and asset optimalization
Measuring impact materiality
1. Engagement of stakeholders
2. Scoping of impacts
3. Assessment of individual impacts
4. Calibration of material impacts
5. Stakeholder and management review
Stakeholder Dialogue Depends on ...
ESG Philosophy of the Company
Stakeholder dialogue definition
The approach a company takes towards ESG issues heavily influences its stakeholder dialogue.
Key points of stakeholder dialogue
1. Compliance
2. Risk mitigation
3. Value creation
Stakeholder dialogue & compliance ...
Ensuring adherence to regulations and avoiding negative repurcussions like litigation, reputation damage, investor backlash, product recalls, labor union disputes, and talent loss.
Stakeholder dialogue and risk mitigation
Involves strategic thinking to avoid regulatory surprises and lack of innovation.
Stakeholder dialogue and value creation
includes proactive measures such as seeking opportunities, improving competitiveness, driving innovation, redefining markets and products, and enhancing efficiens.
Stakeholder and engagement strategies (5)
1. Investors
2. Policiticians and government
3. Employees
4. Customers
5. NGO's and media
Stakeholder and engagement strategie & investors:
Information dissemenation through mandatory and voluntary disclosures, proxy meetings, conference calls, investors connferences, and analyst days.
Stakeholder and engagement strategie & investors example
General Motors focuses on an all-electric, carbon-neutral future, engaging investors by showcasing growth opportunities
Stakeholder and engagement strategies & Policiticians / government
Political influence through lobbying and promoting tax transparancy
Stakeholder and engagement strategies & Policiticians / government example
Boeing's extensive lobbying activities and transparancy about policitical connections
Stakeholder and engagement strategies & employees
Ensuring effective communication and engagement through HR activities, addressing labor concerns, and promoting a safe and inclusive workplace.
Stakeholder and engagement activities & employees example
Ahold Delhaize's commitment to human rights and labor conditions, reflected in its tax transparancy and handling of labor disputes and wage increases
Stakeholder and engagement activities & customers
Engaging customers through marketing, social media, surveys, product recalls, and innovations to enhance satisfaction and loyalty.
Stakeholder and engagement activities & customers example
Ford's proactive customer engagement in recalling cars for safety issues, leveraging social media to communicate
Stakeholder and engagement strategies & NGO's and media
Building partnerships, being transparent, and ensuring accountability in corporate actions
Stakeholder and engagement strategies & NGO's / media example
Various companies engage NGOs and media to enhance their ESG performance and public perception.
Example and case studies: investors
General Motors: Engages investors by focusing on sustainability initiatives, especially the transition to electric vehicles
Example and case studies: Politicians / governments
Boeing: (regulatory lobbying) Uses lobbying to influence regulatory policies, ensuring that their business practices align with legal standards and shareholder expectations.
Example and case studies: Employees
Ahold Delhaize (tax transparancy) Demonstrates tax transparency and addresses labor issues through open dialogues with employees and unions.
Example and case studies: Customers
Manages customer relationships by addressing product safety concerns through recalls and leveraging social media for communication, enhancing trust and brand loyalty.
Example and case studies: clients
Rabobank: Engages with clients by incorporating sustainability into their business model, promoting sustainable finance, and supporting clients in adopting sustainable practices.
Definition of CSDDD
Emphasizing the need for companies to focus on their global value chains and address adverse human rights and environmental impacts.
CSDDD mandates companies to ...
conduct due diligence on their operations and supply chains to identify, prevent, mitigate, and account for their impact on human rights and the environment.
Key take aways from the CSDDD (3)
1. Companies must integrate these due dillegence processes into their corporate strategies
2. Enhanced transparancy and accountability in global operations
3. Increased engagement with stakeholders to ensure compliance and foster sustainable business practices