Advertisement

Finding the Value in Environmental, Social and Governance Performance

Chapter
Part of the FOM-Edition book series (FOMEDITION)

Abstract

To date, managers of approximately $ 30 trillion in financial assets—all signatories to the United Nations Principles for Responsible Investment (UN PRI)—are seeking to identify companies with higher levels of Environmental, Social and Governance (ESG) performance and strong returns. CFOs increasingly find ESG management on their agenda. However, based on insights from Deloitte Sustainability and the CFO study, in 2012, the management of ESG via the financial department varies enormously between industries and countries. This chapter aims to provide insights into four key areas which could be considered key links with respect to finding the value in ESG performance. First, the role of the CFOs in managing ESG performance, second, the market value of the respective information, third, the development over time towards a future outlook, and fourth the utility of transparent ESG information (in the form of internal and external reporting) going forward.

Keywords

Supply Chain Corporate Reputation Global Reporting Initiative United Nations Global Compact Chief Financial Officer 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. Baumeister, R. F., Bratslavsky, E., Finkenauer, C., & Vohs, K. D. (2001). Bad is stronger than good. Review of General Psychology, 5(4), 323–370.CrossRefGoogle Scholar
  2. Commerzbank Study. (2011). Frauen und Männer an der Spitze. So führt der deutsche Mittelstand (Women and men at the top. So leads the German Mittelstand). https://www.unternehmerperspektiven.de/media/up/studien/10studie/FL_UP_10_studie_final_Ansicht.pdf. Accessed 12 Jan 2014.
  3. Davidson, W., Worrell, D., & El-Jelly, A. (1995). Influencing managers to change unpopular corporate behavior through boycotts and divestitures. Business and Society, 34(2), 171–196.CrossRefGoogle Scholar
  4. Deloitte. (2012). Nachhaltigkeit: Warum CFOs auf Einsparungen und Strategie setzen (Sustainability: Why CFOs focus on savings and strategy). http://www.deloitte.com/view/de_DE/de/focus_on/cfo_connect/d195c8ddc364b310VgnVCM3000003456f70aRCRD.htm. Accessed 12 Jan 2014.
  5. Deloitte Consulting LLP, ASQ. (2012). Institute for supply management, & corporate responsibility officer association. Resilience and growth through supply chain collaboration. http://www.deloitte.com/assets/Dcom-UnitedStates/Local percent20Assets/Documents/IMOs/Corporate percent20Responsibility percent20and percent20Sustainability/us_ds_supplier_collaboration_050613.pdf. Accessed 12 Jan 2014.
  6. Dhaliwal, D., Zhen Li, O., & Tsang, A. (2011). Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting. The Accounting Review, 86(1), 59–100.CrossRefGoogle Scholar
  7. Flammer, C. (2013). Corporate social responsibility and shareholder reaction: The environmental awareness of investors. Academy of Management Journal, 56(3), 758–781.CrossRefGoogle Scholar
  8. Hendricks, K. B., & Singhal, V. R. (2005). The effect of supply chain disruptions on long-term shareholder value, profitability, and share price volatility. http://www.supplychainmagazine.fr/TOUTE-INFO/ETUDES/singhal-scm-report.pdf. Accessed 12 Jan 2014.
  9. Kappel, V., Schmidt, P., & Ziegler, A. (2009). Human rights abuse and corporate stock performance—An event study analysis. http://www.feemdeveloper.net/attach/Peter percent20Schmidt.pdf. Accessed 20 Jan 2014.
  10. King, B. G., & Soule, S. A. (2007). Social movements as extra-institutional entrepreneurs: The effect of protests on stock price returns. Administrative Science Quarterly, 52(3), 413–442.Google Scholar
  11. Koehler, D. A., & Hespenheide, E. J. (2012). Disclosure of long-term business value: What matters? http://dupress.com/articles/disclosure-of-long-term-business-value. Accessed 20 Jan 2014.
  12. Koehler, D. A., & Hespenheide, E. J. (2013). Finding the value in environmental, social, and governance performance. Deloitte Review, 2, 97–110.Google Scholar
  13. KPMG. (2011). International survey of corporate responsibility reporting. http://www.kpmg.com/global/en/issuesandinsights/articlespublications/corporate-responsibility/pages/2011-survey.aspx. Accessed 19 Oct 2013.
  14. Lenckus, D. (2012). Huge business interruption losses spur new “information age”. Property Casualty 360. http://www.propertycasualty360.com/2012/07/09/huge-business-interruption-losses-spur-new-informa. Accessed 19 Oct 2013.
  15. Lenox, M., & Eesley, C. (2009). Private environmental activism and the selection and response of firm targets. Journal of Economics Management and Strategy, 18(1), 45–73.CrossRefGoogle Scholar
  16. Leskovec, J., Backstrom, L., & Kleinberg, J. (2009). Meme-tracking and the dynamics of the news cycle. KDD ’09 Proceedings of the 15th ACM SIGKDD international conference on knowledge discovery and data mining, pp. 497–506.Google Scholar
  17. Meyer, M., & Waßmann, J. (2011). Strategische Corporate Social Responsibility. Konzeptionelle Entwicklung und Implementierung in der Praxis am Beispiel “dm-drogerie markt” (Strategic corporate social responsibility. Conceptual development and implementation in practice the example of “dm-drogerie markt”). Research Papers on Marketing Strategy, No. 3/2011. http://www.bwl.uni-wuerzburg.de/fileadmin/12020100/Research_Papers/Meyer_Wassmann_2011_RP3_Strategische_CSR.pdf. Accessed 12 Jan 2014.
  18. Miller, G., Burke, J., McComas, C., & Dick, K. (2008). Advancing pollution prevention and cleaner production—USA’s contribution. Journal of Cleaner Production, 16(6), 665–672.CrossRefGoogle Scholar
  19. Rozin, P., & Royzman, E. D. (2001). Negativity bias, negativity dominance, and contagion. Personality and Social Psychology Review, 5(4), 296–320.CrossRefGoogle Scholar
  20. Steinhardt, R., & Stubenrauch, I. (2012). Nachhaltige Unternehmensführung und Reporting (Sustainable corporate management and reporting). Deloitte Finance & Accounting Forum, 2, 10–12.Google Scholar
  21. Verdantix. (5 Dec 2012). Global sustainability leaders survey: Budgets and priorities. http://www.verdantix.com/index.cfm/papers/Products.Details/product_id/467/global-sustainability-leaders-survey –2013–budgets-and-priorities/-. Accessed 12 Jan 2014.
  22. Voigt, B. (2013). Wirtschaftsmacht China: Die Konjunktur springt wieder an (Economic power of China: The economy starts up again). http://www.tagesspiegel.de/wirtschaft/wirtschaftsmacht-china-die-konjunktur-springt-wieder-an/7592014.html. Accessed 6 Jan 2013.

Copyright information

© Springer Fachmedien Wiesbaden 2015

Authors and Affiliations

  • Viola Möller
    • 1
  • Dinah A. Koehler
    • 2
  • Ina Stubenrauch
    • 3
  1. 1.Deloitte & Touch GmbHDüsseldorfGermany
  2. 2.LarchmontUSA
  3. 3.Deloitte & Touch GmbHBerlinGermany

Personalised recommendations