Environmental, social and governance disclosures in Europe

Purpose – The purpose of this paper is to shed light on the European Union’s (EU) latest regulatory principles for environmental, social and governance (ESG) disclosures. It explains how some of the EU’s member states are ratifying the EU Commission’s directives on ESG reporting by introducing intelligent, substantive and reflexive regulations. Design/methodology/approach – Following a review of EU publications and relevant theoretical underpinnings, this paper reports on the EU member states’ national policies for ESG reporting and disclosures. Findings – The EU has recently revised a number of tools and instruments for the reporting of financial and non-financial information, including the EU’s modernisation directive, the EU’s directive on the disclosure of non-financial and diversity information, the EU Energy Efficiency Directive, the European pollutant release and transfer register, the EU emission trading scheme, the integrated pollution prevention and control directive, among others. Practical implications – Although all member states are transposing these new EU directives, to date, there are no specific requirements in relation to the type of non-financial indicators that can be included in annual reports. Moreover, there is a need for further empirical evidence that analyse how these regulations may (or may not) affect government entities and big corporations. Social implications – Several EU countries are integrating reporting frameworks that require the engagement of relevant stakeholders (including shareholders) to foster a constructive environment that may lead to continuous improvements in ESG disclosures. Originality/value – EU countries are opting for a mix of voluntary and mandatory measures that improve ESG disclosures in their respective jurisdictions. This contribution indicates that there is scope for national governments to give further guidance to civil society and corporate business to comply with the latest EU developments in ESG reporting. When European entities respond to regulatory pressures, they are also addressing ESG and economic deficits for the benefit of all stakeholders.peer-reviewe

The market for socially responsible investing : a review of the developments

This contribution explains how socially responsible investing (SRI) has evolved in the last few decades and sheds light on its latest developments. It describes different forms of SRI in the financial markets; and deliberates on the rationale for the utilization of positive and negative screenings of listed businesses and public organizations. A comprehensive literature review suggests that the providers of financial capital are increasingly allocating funds toward positive impact and sustainable investments. Therefore, this descriptive paper provides a factual summary of the proliferation of SRI products in financial markets. Afterwards it presents the opportunities and challenges facing the stakeholders of SRI. This research presents a historic overview on the growth of SRI products in the financial services industry. It clarifies that the market for responsible investing has recently led to an increase in a number of stakeholders, including; contractors, non governmental organizations (NGOs) and research firms who are involved in the scrutinization of the businesses’ environmental, social and governance (ESG) behaviors. This discursive contribution raises awareness on the screenings of positive impact and sustainable investments. The researcher contends that today’s socially responsible investors are increasingly analyzing the businesses’ non-financial performance, including their ESG credentials. In conclusion this paper puts forward future research avenues in this promising field of study.peer-reviewe

Carbon assessment for cocoa cropping systems in Lampung, Indonesia

Cocoa (Theobroma cacao L.) production plays a key role in the economics of Indonesia, the world’s fourth largest cocoa bean producing country. With more than 1.6 million hectares of land planted with cocoa, small improvements in emissions efficiencies or carbon sequestration opportunities can have a relatively large mitigating effect on emissions from agroforestry and land use. The carbon assessment in Lampung, Sumatra was done to evaluate environmental impacts of cocoa as a commodity through estimation of carbon stock and carbon footprint, GHG emissions during the cultivation of cocoa in different cropping systems. Segmentation of cropping systems along density of intercropping, inputs use intensity and residue management practices identify opportunities for climate smart practices tailored to each segment

Bankruptcy in the Administrative State

A national interacting metasystem of national education and fostering developed in the Finnish speaking region Tornedalen in northern Sweden from the late 19th century to the 1950s. It was not formally agreed as a deliberate education system, but was more of a tacit understanding of a common nationalistic goal within different educational institutions such as primary schools, the residential industrial schools [arbetsstugor], the folk high-schools and the different forms of explicit military education. The aim was to help the poor region economically, to spread the Swedish language and culture in the area, to break the isolation of the region through education and to integrate this geopolitically sensitive border region into the nation. The integrative phase of Swedish nationalism was a common denominator. Leading persons in the educational and fostering activities were many times the same persons. There was a consensus over party lines about the need of acculturation and assimilation of the Tornedalians. The school, the nation and the family was regarded as central concepts in the fostering of the minority into Swedish citizens. By regarding the educations in Tornealen as a metasystem of ideological influences you get an imagination of the ideological power single educations gets when interconnected as a system

Barriers to energy efficiency improvement: Empirical evidence from small-and-medium sized enterprises in China

This paper analyzes barriers for energy efficiency investments for small-and medium-sized enterprises (SMEs) in China. Based on a survey of 480 SMEs in Zhejiang Province, this study assesses financial, informational, and organizational barriers for energy efficiency investments in the SME sector. The conventional view has been that the lack of appropriate financing mechanisms particularly hinders SMEs to adopt cost-effective energy efficiency measures. As such, closing the financing gap for SMEs is seen as a prerequisite in order to promote energy efficiency in the sector. The econometric estimates of this study, however, suggest that access to information is an important determinant of investment outcomes, while this is less clear with respect to financial and organizational factors. More than 40 percent of enterprises in the sample declared that that they are not aware of energy saving equipments or practices in their respective business area, indicating that there are high transaction costs for SMEs to gather, assess, and apply information about energy saving potentials and relevant technologies. One implication is that the Chinese government may assume an active role in fostering the dissemination of energy-efficiency related information in the SME sector. --energy efficiency,SMEs,China,energy policies,information access

A Banker’s Perspective on the Financial Crisis

During the last several years Robert Amzallag as Senior Fellow at CIRANO has taken an active interest in the research and transfer activities undertaken by the Finance Group. He has suggested initiatives that would be relevant to the financial industry in Montreal, particularly in derivative products and concerning practical issues in governance at the director’s level. As the former President and CEO at BNP Paribas (Canada), Mr. Amzallag is certainly well placed to offer insightful commentary on the financial crisis that has preoccupied us over the last several months. Mr. Amzallag’s presentation combines a retrospective analysis of root causes of the crisis followed by some thoughts on what’s to come. As to causes, he isolates three trends that have been gathering force over several decades. These include the erosion of certain stabilizing factors, particularly in the credit market, that has lead to extreme concentrations of risk. Looking to the future, Mr. Amzallag cautiously explores the consequences of several scenarios or responses to the crisis. The first two represent the pursuit of policies reflecting established political sensibilities involving different degrees of government intervention. The third represents a more thoughtful re-appraisal of the different functions that the key players—governments, central banks, regulators and financial institutions —should pursue and should be left to pursue. We have also invited CIRANO Fellow Michel Magnan, Professor of Accounting at Concordia’s John Molson School of Business to present an overview of the controversy surrounding marking to market, an issue highlighted by Mr. Amzallag as an important aspect of the crisis. Professor Michel Magnan takes up the technical but crucial issue of whether fair-value accounting [FVA] was an inadvertent messenger of the financial crisis or was an actual contributor to the crisis. The point is far from academic. By way of appendices to these presentations, the Finance Group has prepared a graphic tool that permits the time-series presentation of key financial indicators against the historical background of the crisis. As well, we have prepared a primer on structured products, including synthetic CDOs, that have played a lead role in the current crisis. This presentation leads naturally to the software module developed at CIRANO that explores the risk management dimensions of these products.

The Evolution of Enterprise Reform in Africa: From State-owned Enterprises to Private Participation in Infrastructure — and Back?

Many African state-owned enterprises (SOEs), particularly those in infrastructure, have a long history of poor performance. From the outset, SOE financial and economic performance generally failed to meet the expectations of their creators and funders. By the late 1970s, the situation was alarming, and by early 1980s, critical. The poor financial performance of SOEs became so burdensome to government budgets that it attracted the attention of the international financial institutions, or IFIs. In response, in the 1980s, the World Bank approved SOE reforms that could be summed up in the term “commercialization”. By the mid-1990s, however, the idea of making SOEs function efficiently and effectively under government management was largely abandoned by the IFIs and privatization and private participation in infrastructure, or PPI became the order of the day. Once more, however, the results were disappointing. PPI has not been as widely adopted as anticipated, nor has it generated the massive resources and changes hoped for, nor has it been widely accepted as beneficial by the African public. The findings of recent studies in Africa suggest that PPI should not be jettisoned, and that the more productive path is to recognize the limitations of the approach, and to work harder at creating the conditions needed to make it function effectively. This will entail, as many have recognized, an end to the view that public and private infrastructure provision is a dichotomy – a case of either-or, one or the other – and a better appreciation of the extent to which the performance of each is dependent on the competence of the other. In other words, for the private sector to perform well, public sector capacity must be enhanced. Moreover, proposed tactics of reform should fit more closely with the expectations and sentiments of the affected government, consumer base, and general population. This broader approach implies, probably, a reduction in the scope and, certainly, a reduction in the planned speed of operations. Improving infrastructure performance is a long-term matter.Africa, Enterprise reform, State-owned enterprises, Privatization