BUSINESS IN SOCIETY:

Session 1: Introduc0on

Purpose of business:
- Maximising the profit (using resources to engage in ac0vi0es)
- Delivering values to customers and employees
- Follow socially conscious inves0ng
- Create and keep customers

ESG score:
An ESG score is an objec0ve measurement or evalua0on of a given company, fund, or
security's performance with respect to Environmental, Social, and Governance (ESG) issues.
What interests do/should they serve?

Uniliver video:
- Talk about your purpose -> has to be relevant.
- Be authen0c -> not the 0me to invent purpose but work on something that is in the
DNA of your brand.
- Product -> has to be at the front and centre, communicate the value of your product.
- Be consistent -> when you’re doing things, are they part of your business model?

The purpose of business is to provide a beVer life and a beVer world for everyone. Making
so, it will generate money.

Ar<cle “crea&ng shared values”

How can companies create shared value and contribute to societal progress while achieving
business success?
Companies can create shared value by addressing societal needs and challenges through
their core business ac0vi0es, products, and services. This approach involves iden0fying and
pursuing opportuni0es to generate economic value by crea0ng social value, rather than
trea0ng social and environmental issues as externali0es or costs to be minimized. By doing
so, companies can tap into new markets, enhance their produc0vity and compe00veness,
and build stronger rela0onships with stakeholders. To create shared value, companies need
to adopt a long-term perspec0ve, collaborate with other actors, measure and track their
impact, and integrate social and environmental considera0ons into their strategy and
opera0ons.

In summary, companies can create shared value by integra0ng social and environmental
considera0ons into their core business ac0vi0es, products, and services. This approach
involves iden0fying and pursuing opportuni0es to generate economic value by crea0ng
social value, rather than trea0ng social and environmental issues as externali0es or costs to
be minimized. By doing so, companies can achieve business success while contribu0ng to
societal progress and building stronger rela0onships with stakeholders.

Session 2: Stakeholder analysis

A stakeholder is “any group or individual who can affect or is affected by the achievement of
an organiza0on’s purpose”.
Whatever the shareholders want, the company has to do it. They want to maximise their
profit. The company crate a lot of value for the shareholder. It’s important for the economic
ac0vity to understand that they are opera0ng not only in society, but also in the nature.
What is a stakeholder?
Anyone interested in the company (employees, customers, shareholders, local communi0es,
suppliers, compe0tors, government, distributor, environment, media channels, …). The
company has an impact on the stakeholder. Is any group or individual who are affected by
the company. A company could focus more in one or some of them.

- A primary stakeholder is one without whose con0nuing par0cipa0on the corpora0on

cannot survive as a going concern. e.g., shareholders, investors, employees,
customers, suppliers, governments, communi0es
- Secondary stakeholders are defined as those who influence or affect, or are influenced
or affected by, the corpora0on, but they are not engaged in transac0ons with the
corpora0on and are not essen0al for its survival. e.g., media, NGOs, compe0tors,
academia, industry associa0ons.

✓ Stakeholders are defined by their own interests and not by the interest of the firm.
✓ Stakeholder interests have intrinsic value and merit considera0on for their own
sake.

(( Employees -> Is the company dependent on them or are they dependent on the
company? ))
Stakeholder salience: power, legi0macy, urgency. If you only have 1 you are a latent
stakeholder; if you have 2 you are a expectant stakeholder, if have all 3 you are a defini0ve
stakeholder. Stakeholders are defined by their own interests and have intrinsic value and
merit considera0on for their own sake.

Latent à Demanding stakeholder

Expectant à Dominant, dangerous, dependent
Defini0ve à High power, legi0macy and urgency

Stakeholder Management: The process of iden0fying, priori0zing, engaging, and developing

policies, communica0on and dialogue for stakeholders to align with a firm's objec0ves.

To which degree do managers give priority to compe0ng stakeholder claims? (The more
aVributes apply, the higher the priority of a stakeholder)
- Power of the stakeholder to influence the firm
- Ability of one actor to carry out his/her own will despite resistance
- Coercive, u0litarian, and norma0ve power
- Legi<macy of the stakeholder rela0onship with the firm
- Socially accepted and expected behavior
- Moral, regula0ve, and cogni0ve legi0macy
- Urgency of the stakeholder claim on the firm
- Call for immediate aVen0on
- Time sensi0vity and cri0cality

Latent stakeholders

Expectant stakeholders

Defini0ve stakeholders

Organiza0ons that manage key stakeholders well are expected to be more successful.
The process of stakeholder management:
1. Iden0fica0on of stakeholders and their claims
2. Priori0za0on of stakeholders
3. Stakeholder engagement
4. Stakeholder policies
5. Stakeholder communica0on and dialogue

Stakeholders are defined by their own interests and nor by the interests of the firm. They have
value and merit considera0on.
Stakeholder interest have intrinsic value and merit considera0on for their own sake.

STAKEHOLDER SIMULATION – SHELL IN NIGERIA

• Most populous country in Africa (7 in the world) and one of the most corrupted
countries in the world.
• Oil revenue in Nigeria is high.
• High infan0le mortality.

Session 3: Fishbanks

Fishbanks simula0on:
Goal -> Maximize your Net Worth at the end of the game.
Net worth = Bank balance + Value of ships
Value of ships = Most recent market price for ships

Annual profit = Income – Expenses

• Environmental sustainability challenges oien involve an overuse of common-pool
resources or public goods
• Yet voluntary business ini<a<ves to address these challenges also need to create and
capture a private benefit

Agreements – Industry regula0on → external or internal rules.

Shared Value: Shared Value is a business strategy that aims to create economic value by addressing
societal needs and challenges. It involves iden8fying and pursuing opportuni8es to generate both
business and social benefits, rather than trea8ng social issues as externali8es or philanthropic
ac8vi8es. Shared Value recognizes that social progress and business success are interdependent and
mutually reinforcing, and that companies can leverage their unique resources and exper8se to create
sustainable compe88ve advantages. The concept was introduced by Michael Porter and Mark Kramer
in a Harvard Business Review ar8cle in 2011 and has since gained widespread aLen8on and adop8on
by companies, governments, and civil society organiza8ons around the world.
Weaknessà Ignoring trade-offs of economic and social responsibility , presuming legal
compliance which is difficult across mul8ple geopoli8cal contexts

Industry Fishing Regula0ons and the Role of Firms & Stakeholders: The interplay of
regula0ons, firms, and stakeholders in the context of fishing industries and environmental
sustainability. Fishing regula0ons aim to address overuse of common-pool resources and
public goods, and firms can play a role in ensuring sustainable fishing prac0ces.

Coopera<on:
§ Absence of coopera0ve efforts in addressing overfishing challenges.
§ Lack of collabora0ve ini0a0ves akin to industry regula0ons as a coopera0ve strategy.
§ Reflects real-world challenges in aligning diverse interests for sustainable prac0ces.

Informa<on-sharing:
§ Exchange of data or knowledge crucial for informed decision-making was absent in
the simula0on.
§ Importance highlighted for sharing market insights, trends, and sustainable prac0ces
in the business world.
§ Emphasizes the need for open communica0on to collec0vely address industry
challenges.

Self-regula<on:
§ Opportunity for voluntary adherence to sustainable prac0ces within the simula0on.
§ Contrast between short-term gains pursuit and poten0al for semng internal
guidelines for responsible behavior.
§ Reflects the role of self-regula0on in corporate responsibility, mi0ga0ng shortsighted
profit pursuits.
Integra<on with Business in Society:
§ Mirrors real-world dilemmas where responsible ac0ons compete with immediate
profit pursuit.
§ Emphasizes compa0bility between socially responsible prac0ces and profitability.
§ Advocacy for responsible consump0on aligns with driving posi0ve change while
achieving financial success.

Industry Regula<ons:
§ Simula0on underscores the cri0cal importance of balancing rules with compe00ve
business interests.
§ Challenges in fostering regula0ons that incen0vize compliance while promo0ng
overall industry development.
§ Aligns with the course's explora0on of interconnectedness between businesses and
societal and environmental concerns.

Club goods → Spo0fy: if I sell it to one person,

anther one can use I too
Public goods → air, weather → everyone ca
use them at the same 0me.
Common – pool are objects of sustainable
issues. If everyone focuses on its own interest.

1. Private Goods: Private goods are both rivalrous and excludable. Rivalrous means that
one person's consumption of the good prevents or limits another person's consumption.
Excludable means that it is possible to selectively allow or deny access to the good.

Ex: Most tangible goods, such as a car, a smartphone, or a piece of clothing. If you own a
car, for instance, someone else

cannot use it at the same time, and you can exclude others from using it.

2. Public Goods: non-rivalrous and non-excludable. Non-rivalrous means that one person's
consumption does not diminish the ability of others to consume the good. Non-excludable
means that it is difficult or impossible to exclude someone from enjoying the benefits of the
good. (everyone can use it at the same time).

Ex: National defense, public parks, and street lighting are examples of public goods. (air,
weather) If a country invests in national defense, all citizens benefit, and it's challenging to
exclude any individual from the protection provided.

3. Common-Pool Resources: rivalrous but non-excludable. Multiple individuals can use the
resource simultaneously, but one person's use may reduce its availability to others.
Ex: Fish in the open ocean, clean air, and groundwater are common-pool resources. If too
many people use a common-pool resource without regulation, it can be depleted or
degraded.

4. Club Goods (or Toll Goods): excludable but non-rivalrous. Multiple individuals can
consume the good simultaneously, and it is possible to exclude others from using it.
Ex: Spotify, private parks, and toll roads are examples of club goods. If you subscribe to a
cable TV service, for instance, your consumption of the service doesn't reduce its
availability to others, and the provider can exclude non- subscribers.

Environmental sustainability challenges often involve an overuse of common-pool

resources or public goods. Yet voluntary business initiatives to address these challenges
also need to create and capture a private benefit.

How do we approach these ‘market failures’?

We have to transition from the Tragedy of the Commons to GOVERNING THE COMMONS

TRAGEDY OF THE COMMONS: situation in which individuals, acting in their self- interest,
deplete shared resources leading to the detriment of the whole group. The tragedy unfolds
when each individual, pursuing their own benefit, has an incentive to exploit the resource as
much as possible. However, since the resource is shared, overuse and depletion can occur,
leading to a situation where everyone loses in the long run. It's a classic example of the
conflict between individual and collective interests.

Captures that individually rational actions can lead to collectively undesirable outcomes
(challenging the “invisible hand”)
- “Prisoner’s dilemma”
- The benefit to the individual is larger than the damage, which is shared among the group
and with future generations.

GOVERNING THE COMMONS: response to the tragedy of the commons. It tries to explain
how communities can successfully manage common-pool resources without falling into the
tragedy.

Different types of resources:

Environmental sustainability challenges oien involve an overuse of common-pool resources
or public goods.
Yet voluntary business ini0a0ves to address these challenges also need to create and
capture a private benefit.
How do we approach these ‘market failures’?
 o From the Tragedy of the Commons:
- Captures that individually ra0onal ac0ons can lead to collec0vely undesirable outcomes
(challenging the “invisible hand”)
- “Prisoner’s dilemma”
- The benefit to the individual is larger than the damage, which is shared among the group
and with future genera0ons.
o To Governing the Commons

1 condi<ons that favor effec<ve commons governance.

1) Provide Information (à LP: information) - Define the boundaries of the common- pool
resource and who has the right to use it. Include the people affected by the rules in the
decision-making process to ensure fairness and representation.

2) Deal with Conflict (à LP: rules) - Establish rules for how the resource is used, shared,
and replenished.

3) Induce Rule Compliance and self-regulation (à LP: rules) - Implement systems to

monitor resource usage and enforce the rules. Establish a system of graduated sanctions
for those who violate the rules, starting with warnings and escalating to more serious
consequences.

4) Provide infrastructure - Have mechanisms in place for resolving disputes and conflicts
among users.

5) Be prepared for change (à LP: goals and mindsets)

Limits to growth
Predic<on: Collapse of several resources also popula0on will collapse because of lack of
food and other elements and increasing of pollu0on.
Deposit → fossil and minerals that cannot be regenerated. Funds have a regenera0on rate.
2009 → 9 planet boundaries → we know what we can consume and how much we can
pollute. Helpful to know the resources we can consume.

System thinking tools:

System analysis = Understanding the problem and the system → different forces and actors
and how they’re related.

1. Iceberg model
2. Stakeholder matrix
3. Impact Gaps Canvas
4. Feedback loops – Systems map
5. Leverage points
 1. Iceberg model

i The iceberg model serves as a valuable tool for comprehending the intricate and often
concealed relationships within a business and the myriad external and internal factors
influencing its operations. This model effectively illustrates that the conspicuous and easily
observable facets of a business, such as products, profits, and market presence (referred
to as the "tip of the ceberg"), are underpinned and influenced by deeper layers of impact
that may not be immediately apparent to external observers or even those within the
organization.

1.1 Events – At the surface level are events, which are specific, one-time occurrences
readily visible and reportable. In the business context, this encompasses activities like
quarterly earnings reports, product launches, marketing campaigns, PR crises, mergers,
layoffs, or other noteworthy incidents. Events represent the 'symptoms' of the system and
often elicit immediate reactions.

1.2 Patterns - Beneath the events lie patterns, denoting trends or sequences of events that
unfold over time. In business, patterns may include consistent growth or decline in sales,
regular market fluctuations, recurring customer complaints, or identifiable patterns of
employee turnover. Recognizing patterns enables businesses and observers to anticipate
future events and comprehend the trajectory of the company's activities in society.

1.3 Structures - Further below are structures that mold or influence patterns and events.
Business structures encompass organizational hierarchies, internal processes, corporate
policies, reward systems, and market regulations. These structures dictate how a business
operates and responds to both internal and external pressures, serving as the systems
within which patterns emerge and events transpire.
1.4 Mental Models - At the deepest level are mental models, representing ingrained beliefs,
values, assumptions, and 'worldviews' held by individuals and organizations. In the
business realm, these could be collective assumptions about market behavior, theories of
management, beliefs about the role of business in society, or convictions

The iceberg model serves as a valuable tool for comprehending the intricate and often
concealed relationships within a business and the myriad external and internal factors
influencing its operations. This model effectively illustrates that the conspicuous and easily
observable facets of a business, such as products, profits, and market presence (referred
to as the "tip of the

regarding environmental responsibility. Mental models profoundly influence how we

interpret and respond to the world around us.

2. Stakeholder Matrix
The Stakeholder Matrix serves as a tool for visually mapping the interest and influence of
diverse stakeholders concerning a business or a specific issue it confronts. This matrix aids
in prioritizing stakeholder concerns and devising engagement strategies tailored to their
level of interest in the business's activities and their capacity to influence it.Here's a basic
outline of how the stakeholder matrix works:

Axes of the Stakeholder Matrix

- X-Axis (Horizontal): Incentive/Interest. Represents the level of interest or the extent to
which stakeholders are likely to be affected by or care about the company's actions,
decisions, or success.
- Y-Axis (Vertical): Power/Influence. Represents the level of power or influence the
stakeholder has over the company's operations or strategic decisions.

The intersection of these axes creates four quadrants, each representing a different type of
stakeholder:

High Power, High Interest: This category encompasses pivotal stakeholders who wield
significant influence and possess a profound interest in decision-making processes.

Active engagement with these stakeholders is crucial due to their potential impact on
outcomes; examples include major investors, regulatory agencies, or essential customers.
 High Power, Low Interest: Stakeholders falling into this quadrant possess substantial
influence over the company but may lack a strong interest in utilizing it. Maintaining their
satisfaction is essential to prevent the development of negative perceptions toward the
company. Examples could include large banks or specific government entities.

Low Power, High Interest: This group consists of stakeholders with substantial interest in
the company's actions but limited direct influence. Keeping them informed is essential, as
their input may offer valuable insights into public perception. Examples may include the
local community or non-governmental organizations (NGOs).

Low Power, Low Interest: Stakeholders in this quadrant exhibit minimal interest and
influence, requiring comparatively less attention. However, ongoing monitoring is advisable
in case their levels of interest or influence undergo changes. This category might
encompass small shareholders or distant communities.

3. Impact Gaps Canvas

Local situa6on (what are different
Describe the challenge (from the
organiza6ons doing, what resources are
point of view of those affected, in
available)
rela6on to other challenges)

Global situa6on (what is being done in

Provide data and sta3s3cs (who is different countries, what can be learned)
impacted, how many)

Describe the main causes (why is the Sucesses and failures (what is working
challenge persis6ng, who benefits and what is not, and why)
from the persistence)

Future (what is being ignored, future

scenarios)
Timeline (describe the history and
projected evolu6on of the
challenge)

Session 4: Social entrepreneurship

Social problems are complex and hard to tackle, and solu0ons some0mes do not work as
expected. It’s necessary to understand the link between:
Status quo -> our approach -> Impact

Why?
• Social problems are complex and had to tackle.
• Solu0ons some0mes do not work as expected.
• Need to understand the link between: Status Quo → Our approach → Impact.

5 streps → linear way (from right to lei)

• Mission
• Problem or need are we addressing.
• What solu0on are we offering.
• What we need to do
• What resources will we employ.

INPUT → ACTIVITY → OUTPUT → OUTCOME (change) → IMPACT

Social Entrepreneurship spectrum:

• From Financial returns (for profit) -> tradi0onal businesses (most for profit),
corporate social responsibility. PROS: more funds, freedom of funds alloca0on, no
limit in commercial ac0vity.
• to Social impact (not for profit) -> philanthropic NGO (dona0ons & subsidies, most
non profit) and entrepreneurial NGO (revenue stream). PROS: more credibility in the
cause, liVle to no taxes.
• In the middle we have the social enterprise – note that each country has a different
law structure regarding.
The impact can be in the inputs, outputs or in the clients.

La Fageda:
LA FAGEDA CASE - The pursuit of innova9ve solu9ons to complex social problems through
entrepreneurial strategies. Social enterprises addressing issues like poverty, educa9on, and
healthcare by crea9ng sustainable business models.
Theory of Change: A theory of change is a method that explains how a given interven9on, or set of
interven9ons, is expected to lead to specific development change, drawing on a causal analysis
based on available evidence.
- MISSION: increase social inclusivity and integra0on
- OUTCOME: making them feel part of a community and improve skills; beVer health of the
employees.
- OUTPUTS (what it is needed to get to the outcome): numbers of jibs posi0ons; visits to the
farm; number of yogurts.
- ACTIVITIES: selling yogurts, gardening, manufacturing of products; logis0c and distribu0on -
- INPUT: subsidies; trainers, phycologists, mentally hill people; land, facili0es, animals.

What assump0on are we making?

By providing jobs we will improve mental hill people quality of life. How to measure them?
- Turnover
- Surveys
- Health reports

It posi0ons itself as a local company with premium price products thanks to:
- Brand name
- Region, they work in, language.
- Logo (cow)
- Good quality

Generic compe00ve strategies (Porter)

Social enterprises:

Or:
- Social business
- Impact business
- Impact venture
- Social business hybrid
 4. Feedback Loops

• VICIOUS → element reinforce each other (ex: poverty, unemployment, and educa0on →
things get worse and worse)
• VIRTUOUS → Parent’s trust and child freedom → reinforcing (things get beVer and beVer).
• STABILIZING → market prices (Keeps things from gemng worse)
• STAGNATING → student performance un class – teacher expecta0ons → not reinforcing
(keep things from gemng beVer).
To build them we need to start with research. How to build them?

5. LEVERAGE POINTS:

They are places within a complex system where a small shii in one thing can produce a big
change in the whole system.
To discover your leverage points, you can ask the following ques0ons:
• Where is the system frozen? Look for places where system behavior is deeply entrenched
and unlikely to change in the near future.
• Where is there pent-up energy for change? Look for places where energy is disrup0ng the
status quo or trying to reorganize and cause new paVerns to emerge.
• Where are there places that seem like bright spots? Look for places where posi0ve change
is happening already.
• Where are you seeing ripple effects? Look for strong factors and dynamics which have the
poten0al to affect many other factors or dynamics downstream.

Session 5: The impact economy

1. Impact Economy: An emerging economic system where businesses aim to create a posi9ve social
and environmental impact while genera9ng profits.
• Companies adop9ng circular economy prac9ces to reduce waste and promote resource
efficiency.
5 R’s: Resources, Rules, Roles, Rela9onships & Results

2. Impact Inves9ng: Inves9ng in projects, companies, or funds with the inten9on of genera9ng both
financial returns and measurable posi9ve societal or environmental impacts.
Investor – organiza9on
Impact inves9ng spectrum decided through Return, Risk and Impact

Types of Investment
• Exclusion: excluding certain sectors or companies that fail to meet predetermined moral or
ethical standards and/or environmental, social and governance criteria “sin” industry (gambling,
tobacco, animal tes9ng etc.)
• Norms Based screening: Norms-based screening is the process of screening investments against
minimum standards of business prac9ce, based on interna9onal norms. UN Compact align with
certain ESG requirements
 • Best in Class: Best-in-class screening is the process of inves9ng in sectors or companies for their
posi9ve ESG performance, rela9ve to their industry peers.
• ESG Integra9on(Most popular): Rely on ESG ra9ng agencies and what their ra9ng indicates.
selec9ng investments and screening sectors or assets based on their contribu9on to social or
environmental sustainability
• Engagement and Vo9ng: Push the management of the company to go in one way or another
• Thema9c Investments: Invest in Renewable energy and devest in fossil fuels
• Impact Investment: Is this company specifically interested in these issues, money has more
cri9cal impact addi9onality , make accept lower returns if you’re inves9ng for impact but
inves9ng with impact has more sensi9vity to returns in this area of interest
Grant making Inves3ng for Impact Inves3ng with Impact Sus. & Responsible inves3ng
OR Tradi3onal Inves3ng
Fundap: Promo3ng Koolboks: Seed start Heura: plant based Danone:
Guatemala’s rural up in west Africa meat successors Medium return
development Medium risk High return Medium risk
Low Risk High Risk High Risk Low impact
Low Return High impact Low impact
High Impact

Leverage points: Leverage points are places within a complex system where a small shii in
one thing can produce big changes in the whole system.
Iden<fying leverage problems:
To discover your leverage points, you can ask the following ques0ons:
● Where is the system frozen? Look for places where system behavior is deeply entrenched
and unlikely to change in the near future.
● Where is there pent-up energy for change? Look for places where energy is disrup0ng the
status quo or trying to reorganize and cause new paVerns to emerge.
● Where are there places that seem like bright spots? Look for places where posi0ve change
is happening already.
● Where are you seeing ripple effects? Look for strong factors and dynamics which have the
poten0al to affect many other factors or dynamics downstream.

Session 6: Impact inves0ng

As an investor, I care about the environment: What can I do with fossil fuels?
➢ Exclude this industry from the investment universe
➢ Invest in those with best prac0ces in transi0on to renewable energies within the industry
➢ Pressure “from within” (as shareholders) so that companies reduce their emissions
➢ Invest in green bonds issued to finance renewable energy (either from companies in the
fossil fuel industry or not)

Why?
➢Ethically sound investment (even if associated with some financial loss)
➢Higher financial performance through good environmental and social performance

Investment Spectrum:
Sustainable and Responsible Investment
Sustainable and responsible investment (”SRI”) is a long-term oriented investment approach
which integrates ESG factors in the research, analysis and selec0on process of securi0es
within an investment poryolio. It combines fundamental analysis and engagement with an
evalua0on of ESG factors in order to beVer capture long-term returns for investors, and to
benefit society by influencing the behaviour of companies.
1) Exclusion
2) Norms-based screening
3) Best-in-Class.
4) ESG integra0on

5) Engagement & Vo0ng

6) Thema0c investments
7) Impact investment

SRI - Global growth

SRI – Long-term growth

SRI – Investment strategies

SRI – Type of investor and Asset class

Year period, slightly overperforming highly dependent on industry performance.

But is ESG really working?

Cri5que from neoliberalism:
- “The only responsibility of companies is to maximize financial return to their shareholders”
(Milton Friedman)
- ESG issues are the responsibility of democra0cally elected governments
- “ESG ra0ngs are a scam” (Elon Musk)

Cri5que from the impact economy:

- ESG ra0ngs are not transparent or strict enough (greenwashing)
- Do we care about the rela0on between ESG and financial performance and flows towards
ESG funds, or do we care about the impact of these companies?
- There is a need for systemic change, not jut the behavior of individual companies

Impact inves<ng approaches:

• Financial instrument (equity, debt, other)
• Financial return expecta0ons
• Impact expecta0ons
• Investment size
• Stage (seed, growth, mature)
• Private vs Public markets
• Developed vs developing countries
• Impact sector
• Financial incen0ves

Impact Inves0ng trends:

1. Blended Finance
2. Linking financial returns and social impact
3. Impact Measurement and Management

1. Blended Finance
“Blended finance is the use of cataly0c capital from public or philanthropic sources to
increase private sector investment in sustainable development.”

Blended finance features:

➢ Impact inten0onality
➢ Asymmetry
➢ Cataly0c
Blended finance instruments:
➢ First loss / Junior equity
➢ Junior debt
➢ Guarantees
➢ Technical assistance
➢ Grants
2. Linking financial returns and social impact
“Introducing impact metrics in investment decisions is the key”

3. Impact Measurement and Management

Ar3cle 1: "Could A Ban On Fishing In Interna3onal Waters Become A Reality"
This ar9cle explores the possibility of establishing a massive marine reserve in interna9onal waters,
prohibi9ng fishing to address environmental concerns. The concept aims to protect marine life,
promote sustainable fishing prac9ces, and faces challenges in its implementa9on.
• Stakeholder Theory: The fishing industry involves various stakeholders, including primary
stakeholders (fishermen) and secondary stakeholders (environmental ac9vists). Balancing
their interests is crucial for achieving sustainable outcomes. The discussion of a fishing ban
gains momentum as UN member states nego9ate a treaty on protec9ng high-seas
biodiversity.
• Environmental Impact: Industrial fishing prac9ces in interna9onal waters have significant
environmental impacts, such as habitat destruc9on and bycatch. Well-enforced fishing bans
in marine reserves lead to increased fish popula9ons and benefits for fishers in surrounding
waters.
• Challenges: Implemen9ng a fishing ban faces poli9cal and logis9cal challenges, raising
doubts about its feasibility.

Ar3cle 2: "The U.N. Goal That Doesn't Get A Lot Of Respect"

The ar9cle discusses the underapprecia9on of UN Sustainable Development Goal #14, which focuses
on marine conserva9on and sustainable ocean use. Despite its poten9al economic benefits, Goal #14
is ocen overlooked in favor of other goals, reflec9ng challenges in priori9zing environmental
conserva9on.
• UN Sustainable Development Goals (SDGs): Goal #14 aims to conserve oceans and marine
resources for sustainable development but is considered less important compared to other
SDGs. Environmental protec9on contributes to economic development, crea9ng jobs and
food.
• The Role of Development Experts: Development experts advocate for recognizing the
economic poten9al of marine conserva9on, emphasizing its value.
• Interconnectedness of Goals: Achieving sustainable development requires understanding the
interconnectedness of environmental and development goals. This ar9cle underscores the
importance of recognizing the economic implica9ons of environmental protec9on and
understanding the rela9onships between various sustainable development goals.
Ar3cle 3: "The Hidden Leverage of Investors"
The ar9cle explores the role of investors in driving social impact through divestment movements. It
emphasizes the power of consumers and other stakeholders in shaping a company's behavior, with a
focus on their influence on sustainability.
• Stakeholder Theory: Investors, consumers, employees, and regulators influence a company's
behavior. Recognizing the power of these stakeholders is essen9al for understanding
corporate social responsibility. Need private money and for consumers to become more
aware to push companies and investors into this direc9on
• Signaling Effect: Investment decisions have a signaling effect and may ins9ll fear in corporate
managers, providing support for stakeholder efforts, including ESG ini9a9ves.
• Effect of Consumer Behaviour: Changes in consumer behavior and regulatory measures can
significantly influence a company's ac9ons and environmental impact.
• It highlights the evolving landscape of corporate social responsibility, driven by various
stakeholders, focused on the complex interac9ons between businesses and society.

Ar3cle 4: "Impact Inves3ng and Sustainability Repor3ng"

The ar9cle delves into the significance of ESG ra9ngs in impact inves9ng, focusing on MSCI as a key
ESG ra9ng provider. It raises concerns about the transparency and effec9veness of ESG ra9ngs in
promo9ng genuine sustainability. (Value align or value crea9on) Differen9ate between impact
investment and social responsibility investment.
• Stakeholder Theory: Investors rely on ESG ra9ngs to evaluate a company's environmental and
social impact. This reflects the importance of considering various stakeholders' interests in
impact inves9ng.
• ESG Ra9ngs and Their Significance: ESG ra9ngs inform investors about a company's
environmental and social prac9ces. ESG ra9ngs may priori9ze financial considera9ons over
environmental and social goals, poten9ally leading to discrepancies between a company's
actual impact and its ra9ng. The challenges and concerns related to ESG ra9ngs in promo9ng
genuine sustainability and ethical inves9ng, emphasizing the importance of transparency and
stakeholder interests.