Linking Purpose to Profit: ESG and Corporate Responsibility

These flashcards cover key concepts related to ESG issues, corporate responsibility, and the implications of stakeholder capitalism as discussed in the lecture.

What is the main focus of Larry Fink's call to business leaders regarding ESG issues?

Corporate purpose under environmental, social, and governance considerations.

How do long-term ESG issues impact financial performance according to Larry Fink?

They have real and quantifiable financial impacts.

What is stakeholder capitalism, according to Fink?

It is about profits and not just a political or social agenda.

What are some risks associated with social responsibility targeting for companies?

High opportunity costs, dependence on non-profit partners, and risks of greenwashing.

What characterizes BlackRock's investment approach?

BlackRock is an index investor that supports long-term ESG value creation.

What was Nike's initial response to labor criticisms?

To deny accountability and shift blame to contracted factories and governments.

What are the four labor criticisms against Nike?

Low wages, child labor, poor working conditions, and unfair profit distribution.

What did Phil Knight argue about Nike's outsourcing strategy?

That accountability should lie with the contracted factories, not Nike.

What does greenwashing refer to?

The action gap where ESG claims have more substance than actual ESG actions.

What are the principles of Fair Trade Coffee as per TransFair USA?

Fair Price, Democratic Organization, Direct Trade, Access to Credit, Environmental Protection.

How did Starbucks respond to Global Exchange's demands for fair trade coffee?

By compromising to carry fair trade coffee a few times a year.

What was a significant outcome of Starbucks' collaboration with non-profit partners?

The realization that the market was not willing to pay for fair trade coffee.

What was the aim of Greenpeace's Unfriend Coal campaign targeting Facebook?

To encourage Facebook to use renewable energy sources.

What did Nike do to improve its reputation after labor accusations?

Created a new internal Code of Conduct and monitored labor practices.

What was the outcome of the Rana Plaza collapse for the apparel industry?

It led to the signing of the Accord on Factory & Building Safety by over 200 brands.

What are some key considerations for companies in stakeholder capitalism?

Social, political, and competitive risks have grown among customers and investors.

What did Facebook commit to regarding its operations from 2020 onwards?

Maintain net zero greenhouse gas emissions and be fully supported by renewable energy.