ESG#3 Group 3 by NGUYEN HUYNH KHOA[ 학부재학 / 경영학과 ]

Perspectives

mistake3623 — 2024-03-18 03:34:05 UTC

Our team perspective is that ESG activities must be carried out while considering profitability and the stock prices of ABC industry. Corporate products without ESG management activities are ignored by the MZ generation. However, ESG management puts the interest of non-shareholders before the shareholders, which challenges principles of financial management, making it hard to pursue this campaign.

Therefore, the essential condition is satisfying both interest of non-shareholders and shareholders at the same time.

Balancing economic prosperity with environmental protection is key. Actions should align with sustainability goals, regulatory compliance, and societal obligations for long-term success.

Team members' tasks, roles and dealines

mistake3623 — 2024-03-18 03:35:19 UTC

Our main online space to collaborate is through Padlet.

During session 2 discussion, each team members are assigned the task of learning about the following sections:

_Vindra Aditya Pattinasarany: Problem

_Nguyen Huynh Khoa: Perspectives

_심현우: Opinions

_이윤정 YUNJOUNG LEE: View points

_Aisha Ardelia Putri: Solutions

On top of that, everyone will try to at least find out some company's ESG managements examples and we will going to discuss about our findings and do some research together next Wednesday after class (19th March).

All of our team members will participate in this meeting.

Opinions

barry824 — 2024-03-18 03:42:06 UTC

We need to convince the other team with viewpoint from stakeholder capitalism. So, our main value and point should be that we should try to encompass all the stakeholders regarding the actions of our company. In return, this will result in improvement of our company's wealth and overall profit for our shareholders, as ESG management counters the externalities of the market and improves corporate image. However, as some stakeholders have interests that directly counter the motive of the company's business, it is important to give them compensation and incentive to follow the company's decision. Therefore it is essential to invest in ESG operations that are aligned and highly relevant to the company's business goals.

Solutions

vindrapattinasarany — 2024-03-18 03:50:25 UTC

ABC Co. can expand its product line of cooking utensils by considering eco-friendly and sustainable kitchenware options that appeal to environmentally-conscious consumers. To achieve this, the company can invest in research and development to innovate new products that align with consumer preferences while addressing concerns about material costs. However, if they don't have the capital to invest in R&D for new products, ABC Co. can focus on enhancing its flagship product, a multifunctional frying pan, through continuous improvement initiatives. Additionally, the company can explore product extensions based on its existing successful product lines to remain competitive and meet changing market demands.

Problem

aishaardelia — 2024-03-18 04:06:54 UTC

ABC Co. is facing some big problems. The sales and stock price went down, as they sell cooking utensils (pan) but more people are ordering food delivery instead of cooking at home. Plus, the prices of the materials they use, like stainless steel and aluminum, have gone up, cutting into their profits. They also experienced lack of funds because they're not getting as much support from banks because they haven't been focusing on environmental and social responsibility like other companies have. For the last 2 years, ABC Co. have been doing some short term ESG efforts such as delivering lunchboxes, kimchi making, but they haven't seen much benefit yet. And with things like the COVID-19 pandemic and conflicts between countries causing more uncertainty, their finance team is unsure if investing in these projects is a good idea. ABC Co. is now thinking on how to make a long term ESG initiatives so that they can also be more attractive to the MZ generations and acquire funds from the bank.

View points of team

2024-03-18 04:07:05 UTC

Viewpoints

Finance team:

The team is worried about the potential lost in both short term when carrying out ESG projects. The team agree on the fact that ESG investment is needed, but considering the current economic status of the company, the expansion of ESG project is unnecessary. Moreover, the team also feel skeptical about the past few ESG projects as it takes a lot of time to see the results of the investment and it is hard to measure the benefits which negatively effects the stock for raising the capital.

ESG Committee

The team argues that the company’s image has been improved through the ESG projects, which led to increase in sales of the company.

Considering the current situation, our team thinks that ESG projects should be carried out even if the benefits of investing for ESG projects are not directly shown in short term.

Main issue occured during TFT

mistake3623 — 2024-03-20 03:07:37 UTC

Finance team argued that most companies doing ESG activities are mostly perceived as green washing by the consumers. Moreover, the cost of raw materials are increasing significantly during post-pandemic era means that our company's financial situation is very bad at the moment. Therefore 5% profit for ESG operation is too much and we should rather allocate that resource to some other departments that will bring more profit in the short-term.

However our ESG team firmly believe that ESG activities are very important nowadays since the MZ generation are more favorable for products that include ESG activities. Therefore, it is very important to do ESG management in order to improve the company's image by the consumers and as a result sales of the eco-friendly line of products will be increased.

Final proposed solutions that both team reached

mistake3623 — 2024-03-20 03:08:03 UTC

We finally agreed that before developing a new line of product we should conduct Education and Awareness Campaign in order to raise awareness about environmental issues among consumers. Both team believed that previous lines of ESG products are not very effective because our customers did not have sufficient amount of knowledge about our products and therefore see these as green-washing. As a result, conducting a marketing and awareness campaign beforehand is very important. Moreover, as the image of our company improves, investors and businesses can spur demand for sustainable products and practices which will empower stakeholders to make informed decisions and be more willing to fund the ESG operation.

4% of the company's profit can be allocated both to run the campaign and develop the new line of product.

As the remaining 1% will be used for other department to run other activities that will contribute to the short-term benefit of the company.

When we witness the positive effect of this ESG project in the first 3 months, we can expand the budget both for awareness campaign and product development.

On the other hand, if the campaign turns out to be unsuccessful, we will therefore come up with another line of ESG product that is less costly to produce or consider doing an alternative ESG campaign.

Session 4

mistake3623 — 2024-03-25 12:37:12 UTC

mistake3623 — 2024-03-25 12:42:31 UTC

Find examples about other companies' ESG management (remember to cite)
Come up with an alternative solution (another ESG products)
Transfer the researched information into the PPT
Finish the PPT
Divide the presenting parts between those who present

Examples#1

barry824 — 2024-03-25 12:50:14 UTC

Pulmuone(A South Korean food brand): Pulmuone introduced eco-friendly packaging for its products, and it plans to use packaging materials that are 100% recyclable for all its products by this year.
Furthermore, it has been able to achieve good scores by establishing and operating a human rights and fair trade compliance system. The fact that it has been conducting "Children's Proper Eating Education" for over 10 years seems to have contributed to receiving an A+ in the social responsibility sector. Moreover, in the corporate governance sector, it has shown to be in line with corporate governance best practices by enhancing transparency and efficiency through disclosing information about professional management and board evaluations.
With its corporate mission of being a "LOHAS company that loves people and nature together," it seems capable of appealing sufficiently to the MZ generation, who consider ESG management activities as a factor in employment consideration.
Kakao: As of 2021, Kakao received an integrated A grade in the evaluation by KCGS. It received an A+ grade in the social sector and an A grade in the corporate governance sector. Particularly notable is its rise to an A grade in the environmental sector, three grades higher than last year.
Since January of last year, Kakao has established an ESG committee to strengthen ESG management and has published reports containing the company's promises and responsible activities.
opening of an ESG committee at (주)LG, the holding company of the LG Group, which formed an advisory group consisting of the MZ generation, seeking to incorporate the opinions of young people to become a sustainable company.

Source: https://blog.greetinghr.com/esg-management-examples/

Example#2(McDonalds)

barry824 — 2024-03-25 12:53:51 UTC

Since the inception of the "Good to know" campaign in 2015, which addresses issues related to food origins and production, McDonald's has begun addressing issues related to food origins and production. As a result, by 2022, eight out of ten UK consumers knew what McDonald's was doing for the environment, and the response was positive.

Additionally, McDonald's has begun to be perceived as a company that addresses ESG issues among consumers by sourcing sustainable ingredients, supporting local communities, and using suppliers within the UK.

Recently, through the campaign "Change A Little, Change A Lot," McDonald's continues to maintain a humble yet confident tone. This campaign has elicited positive responses from consumers and has had a positive impact on the brand, expanding through various advertisements and media.

McDonald's avoids cliché advertising formats and instead demonstrates what it is doing for sustainability. For example, it recycles McCafe cups, converts waste cooking oil into biodiesel, and invests in UK agriculture to support its employees. McDonald's explains its stance on social responsibility and raises consumer considerations for the brand.

According to Activation Impact Modeling (AIM), those who are aware of this campaign ("Good to know") believe by more than 10% points compared to those who are not aware that McDonald's uses recyclable packaging, reduces food waste, protects the environment, and has a strong sense of social responsibility.

Furthermore, there is a group of "Responsible" consumers who consider ESG more important than others. They are interested not only in recycling but also in purchasing domestic products and ethical management, knowing that sustainable sourcing can bring about change. Therefore, they are most likely to put their beliefs into practice.

Source: https://www.ipsos.com/ko-kr/ESG-%EA%B2%BD%EC%98%81-%EC%82%AC%EB%A1%80-%EB%A7%A5%EB%8F%84%EB%82%A0%EB%93%9C%EB%8A%94-%EC%96%B4%EB%96%BB%EA%B2%8C-ESG-%EB%B8%8C%EB%9E%9C%EB%93%9C-%EC%8B%A0%EB%A2%B0%EB%A5%BC-%EB%90%98%EC%B0%BE%EC%95%98%EC%9D%84%EA%B9%8C

ESG Banks

barry824 — 2024-03-25 12:55:46 UTC

IBK, KB, etc.

IBK: https://spot.wooribank.com/pot/Dream?withyou=BPPCT0001

KB: https://omoney.kbstar.com/quics?page=C101240#loading

Example#3 (Unilever’s Sustainable Living Plan)

mistake3623 — 2024-03-25 13:03:08 UTC

Unilever's Sustainable Living Plan (USLP) is a notable case study in corporate sustainability and social responsibility, initiated in 2010. This ambitious plan was developed with the aim of decoupling the company's growth from its environmental impact while increasing its positive social impact. Here's an overview of its key components, objectives, and outcomes:

Objectives and Goals

The USLP set out three overarching goals to be achieved by 2020:

Improve Health and Well-being: The goal was to improve the health and well-being of more than a billion people by promoting better hygiene and nutrition.
Reduce Environmental Impact: Unilever aimed to halve the environmental footprint of the making and use of its products. This included significant reductions in greenhouse gas emissions, water use, and waste production throughout the lifecycle of its products.
Enhance Livelihoods: The company sought to enhance the livelihoods of millions of people by promoting fair wages, encouraging diversity and inclusion, and developing sustainable sourcing practices.

Strategies and Initiatives

To achieve these goals, Unilever implemented a variety of strategies and initiatives across its global operations:

Sustainable Sourcing: One of the key initiatives was to source 100% of its agricultural raw materials sustainably. This involved working closely with farmers and suppliers to improve practices and ensure sustainability standards.
Product Innovation: Unilever focused on developing products that offered both sustainability benefits and met consumer needs. For instance, it introduced more concentrated versions of its cleaning products to reduce water usage and packaging waste.
Health and Hygiene Programs: Programs like Lifebuoy's handwashing campaign aimed to reduce disease and improve health outcomes in underserved communities.
Carbon Footprint Reduction: The company worked on reducing greenhouse gas emissions across its operations, including investing in renewable energy sources and improving the energy efficiency of its manufacturing processes.

Outcomes and Impact

By the time of its conclusion in 2020, the USLP had made significant strides towards its objectives:

There was substantial progress in sustainable sourcing, with a significant percentage of agricultural raw materials being sourced sustainably.
Unilever reported improvements in the health and well-being of millions of people through various programs and initiatives.
The company made notable reductions in its carbon footprint, water use, and waste production, although it faced challenges in fully achieving some of its environmental targets.
It also contributed to enhancing livelihoods through its focus on sustainable sourcing practices and employment policies.

Challenges and Lessons Learned

Despite its achievements, the USLP faced criticism and challenges:

Meeting Ambitious Targets: Some of the targets were criticized for being overly ambitious, with Unilever admitting to falling short in areas like halving the environmental impact of products.
Transparency and Measurement: Critics also highlighted the need for greater transparency and more rigorous ways of measuring impact, suggesting that some of the reported successes could be more nuanced.
Source: https://www.linkedin.com/pulse/aligning-profit-purpose-case-study-unilevers-living-plan-jayus

aishaardelia — 2024-03-25 13:09:51 UTC

Find examples where ESG initiatives clashed with Financial considerations in real company
// I think it is on the finance team side??? // Oh okay, what should we write on the supporting evidences/logics from our department (esg)?