Corporate Value Creation, Sustainability and Social Welfare

Introduction

The issues of Corporate Social Responsibility (CSR), Environmental, Social and Governance (ESG) performance, Socially Responsible Investment (SRI), and the United Nations Sustainable Development Goals (SDGs) are at the forefront of the challenges corporations, investors and government are facing. To a large extent, the need for CSR arises from the existence of externalities to firms, organizations and individual productive and consumption activities. We first examine these problems of externalities and review how market, non-market, and ethics based solutions can be used under different conditions. We investigate the practical steps firms and organizations need to undertake to incorporate sustainability in the management of their operations and their investment decisions. We discuss in detail the alternative institutional mechanisms open to shareholders and institutional investors to effect CSR and sustainability focused management practices. We examine alternative ways through which finance innovations can help achieve individual returns and benefits, economic development and social impact or for social enterprises to gain financial sustainability. We analyze the role of fiduciary duty in helping align board and manager behavior to shareholders priorities.

Course content

Topics:

• The basics of economic and financial valuation, and the extent and limits to which sustainability concerns can affect values.
• Which levers are available to investors, stakeholders, and civil society to ensure that sustainability concerns are significant drivers of values.
• Sustainability focused corporate investment and operating management
  • Identification of the firms’ and organizations’ activities and operations that create or destroy value, in financial, environmental and social terms, using of the main sustainability frameworks to measure impact.
  • Materiality analysis: which social and environmental dimension really matter for the firm’s operations
  • Investment and operation action plan.
• How to develop financial sustainability plans for social enterprises with significant positive impact.
• Tools for engagement: institutional mechanisms for shareholder actions to enhance corporate sustainability focus
  • UN Principles of Responsible Investing (UNPRI) and UN Sustainable Development Goals.
  • Institutional Investors and Socially Responsible Investing
• Ethics, Fiduciary duty and social responsibility
• Alternative finance mechanism to sustain for profit economic activity with benefits to the individuals and social impact.