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ESG and Sustainable Accounting/Finance

The Access to Medicine Index (A): Engaging Stakeholders and Attracting Funding

The Access to Medicine Index (B): Making An Impact

Afshin Mehrpouya, Diane-Laure Arjalies, Ken Mark, 2017

The founder of the Access to Medicine Foundation faces a number of challenges in researching and publishing a biannual, global survey of pharmaceutical companies and their rankings, in terms of their effects in providing needed medicines to people in developing countries. Case A explores challenges of engaging stakeholders—government, pharmaceutical firms, nonprofit organizations, investors, and others—and securing funding to support ongoing research and analyses. Case B examines a three-point focus: to improve engagement with pharmaceutical companies in an effort to increase the effect of the ATMI on companies’ practices; to incorporate the views of patients into the ATMI; and to engage with governments and regulators in the developing countries, where citizens were in need of access to medicines.



Socially Responsible Investment Funds in France: Regulations and Retail (A) and (B)

Diane-Laure Arjalies, Ken Mark, 2016

The case examines the challenge of setting the standards for socially responsible investment funds in France. It focuses on the set of roles and responsibilities that regulators needed to take to ensure the best interest of society and the retail market. The government had to decide how to go about creating standards that could be applied to socially responsible investment funds.



Impak Finance (A): Building the Impact Economy through Systems Change

Diane-Laure Arjalies, Delphine Givassier, Andrew Newton

The founder and chief executive officer of impak Finance Inc. had grown his financial technology start-up, based in Montreal, Canada, into a company with two main business lines: an extensive and comprehensive assessment and rating agency that used advanced social impact measurement and scoring software, and an online marketplace platform that used the cryptocurrency impak Coin and connected like-minded consumers, investors, and businesses to support socially sustainable and responsible firms aligned on their economic and financial principles. In case A, after the outbreak of the COVID-19 pandemic in early 2020, the founder wondered which strategic direction he should take to ensure the long-term sustainability of impak Finance Inc.—invest heavily in developing the rating agency or grow the impak marketplace?



Note on Money and Cryptocurrencies

Diane-Laure Arjalies, Andrew Newton

 This note explains the workings of money and cryptocurrencies and introduces what money is, before briefly reviewing its history. The note       elaborates on the workings of money today (i.e., fiat currencies such as the US dollar and the European euro) and the importance of debt in     the financial system. It then explains what cryptocurrencies consist of, notably the workings of blockchain technologies and the goals that     utopian currencies hope to achieve. The note concludes by describing three major cryptocurrencies: bitcoin, Ğ1, and impak Coin.



Verge Capital: Investing for Social Impact

Diane-Laure Arjlalies, Sandy Chen, Sarangen Sathasivam, Andrew Newton

Verge Capital was a social finance organization in London, Ontario, that connected local aspiring entrepreneurs with funds that would support   initiatives with societal or environmental missions that benefited local communities. In 2019, the social finance manager at Verge Capital had   to recomm end one of two social impact business proposals that the organization should fund a CA$30,000 loan to. The two options were (1)   Sri Lankan Foods, which operated a Sri Lankan restaurant, a catering business, and a granola production facility that provided short-term   employment opportunities for newcomers to Canada, and (2) Material Impact, which collected and resold used textbooks to fund donations of   books and learning materials to South American universities. While both businesses aligned with Verge Capital’s mandate, the social finance   manager needed to choose just one. He wondered how sustainable the businesses were and what criteria Verge Capital should consider before investing.



Magna International and Dual Share Unification

W. Glenn Rowe, Stephen Sapp, Nadine De Gannes, Abbas Khambati

After the management of Magna International Inc. (Magna) tabled a proposal to shareholders in May 2010 to acquire all of Frank Stronach's Class B voting shares for approximately US$1 billion, vociferous opposition emerged, heavily criticizing the process by which the terms had been agreed on and the lack of information provided by the board. The Ontario Securities Commission ruled that Magna needed to provide more information to shareholders. In compliance with that order, Magna released an amendment that included a report from its financial advisor, its advisor’s advice to the Magna board, and PricewaterhouseCooper's evaluation of the deal. In late August 2010, a Magna shareholder needed to decide whether to keep or sell her shares, and wanted to understand what amount, if any, would have been appropriate for Stronach’s Class B voting shares. As a consumer conscious of the environmental, social, and governance aspects of a corporation, she was also concerned whether Magna’s board and special committee had applied good governance principles.



Assessing Corporate Impact: Danby's Response to Syrian Immigration

Diane-Laure Arjalies, Pratima Basal, Bobby Kaloty

In April 2018, more than one year after the chief executive officer (CEO) of Danby Appliances Inc. launched a private sponsorship program to support Syrian refugees in their integration into Canada, the CEO and others were starting to raise some questions. Although the program seemed to have had an overall positive impact on Syrian refugees, Danby's board of directors wondered about the impact of the program on the appliance business. The settlement program continued to take up a considerable amount of the CEO's time and may have even been a drain on other Danby resources, such as staff time. With competition intensifying in the appliance manufacturing industry, the board asked the CEO to assess the impact of the settlement program on Danby, the refugees, and the community, and to recommend whether the program should continue. The CEO knew it would be difficult to collect precise numbers and wondered how he should start to quantify the true impact of the settlement program.



Barrick Gold: Integrating ESG into the (Post-Merger) Executive Performance Scorecard

Nadine De Gannes, Shannon Fernandes

On January 2, 2019, Canada-based Barrick Gold Corporation (Barrick) and Randgold Resources (Randgold) merged to become the largest gold mining company in the world. Following the merger, Barrick’s new executive team communicated a financial strategy that emphasized a long-term focus, particularly on sustainability. Barrick’s executive performance scorecard—a key management tool used to direct executive attention and evaluate performance—had been introduced in 2013, after an overwhelming majority of shareholders voted against a proposed compensation plan at the annual general meeting. No changes had been made to the scorecard since 2015, despite changes in the organization and in the mining industry overall. An external human resources professional who was proposing a new executive scorecard for the company faced several questions: Should she emphasize the short-term or long-term incentive plan? Which metrics and weightings should be changed? Were the existing financial and non-financial measures still appropriate, and did they adequately reflect Barrick’s sustainability goals? Was Barrick doing enough to satisfy regulators, institutional investors, and the many guidelines and standards that had been released in recent years?



Guidelines for Doing an Impact Assessment

Diane-Laure Arjalies, Pratima Bansal

An impact assessment enables organizations to assess the wider impact of their activities on stakeholders, beyond the financial impacts. By assessing all impacts, managers can make better decisions, leading to a more positive impact; reduce their organizations’ negative impacts; and identify creative ways to capture the social and environmental value their organizations create. Organizations can undertake an impact assessment on themselves or on organizations in which they invest or plan to invest. This note explains the fundamentals of impact assessment, including what an impact assessment is, how to assess impact, and the main frameworks used to assess impact.



Norlha: Scaling Up Sustainable Luxury on the Tibetan Plateau

Haitao Yu, Diane-Laure Arjalies

Norlha Textiles was a yak wool enterprise located on the Tibetan Plateau in China. Founded in 2007, the company designed and produced yak wool textiles made by Tibetan nomads and sold globally to customers that included such luxury brands as Hermès, Louis Vuitton, and Yves Saint Laurent. In 2015, the company employed 120 local people, enabling them to adapt to the modern world while preserving their local traditions. Also in 2015, the local government invited the company to expand its model to another nomadic community on the Tibetan Plateau. Although this seemed to be a good opportunity to grow the company’s influence, the chief executive officer hesitated, reflecting on the pros and cons. Was such a partnership the right opportunity to grow the company?



Danone: Adopting Integrated Reporting or Not? (A)

Diane-Laure Arjalies, Michelle Rodrigue, Delphine Gibassier, Ken Mark

Danone SA (Danone), a multinational food company based in Paris, had a history of social and environmental consciousness and a corporate strategy that focused on economic and social objectives. In 2013, the company was trying to ensure that this social and environmental focus was part of its decision-making process, and wanted to communicate its industry-leading efforts to internal and external stakeholders alike. The company had learned that it was not enough just to have internal systems and data prove its environmental consciousness. The company’s carbon accounting initiative, for example, demonstrated the firm’s progress in reducing its carbon footprint; however, because it did not make use of widely accepted carbon accounting standards, Danone’s sustainability efforts were largely discounted or ignored. Now the company had to decide how to report to its various stakeholders going forward.

The A case focuses on Danone’s reporting activity in 2013, when it worked with the International Integrated Reporting Council to pilot that organization’s integrated reporting standard. The B case brings the situation forward to 2018 and discusses Danone’s work to launch its own integrated report, its efforts to become certified as a B Corporation, and its support of the United Nations’ Sustainable Development Goals.



London Water (A)

Vaughan S. Radcliffe, John G. Wilson, Denise Brunsdon

In 2013, London Water, the water system of the City of London, Ontario, has run deficits for eight of the past nine years, leading to significant pressure to pull the organization out of the red. The Water Engineering Division manager knows that something needs to change. Overhauling the rate structure is an attractive option; however, myriad political, economic and environmental issues are at play. Moreover, as steward of one of the city’s most important utilities, the manager needs to determine the best course of action, ideally a solution that will work in both the short run and the long run. See supplement case 9B15B010.



Insolar Solar Umbrella: Democratizing Access to Solar Energy

Mary Gillett, Lena Robinson

In the winter of 2019, the Brazilian entrepreneur and founder of Insolar was proud of what he had accomplished in the five years since the company’s launch. His vision to democratize access to solar energy in Brazil was finally starting to become a reality. Insolar had installed solar panels that were providing a sustainable energy source to 5,000 residents in the favelas of Rio de Janeiro. The company had also founded an institute to train low-income residents on the installation of solar panels and was continuously designing new innovations to increase the institute’s impact. The founder was ready to make an additional investment and expand the Insolar brand. He had just received word from his research and development team that the final version of his most recent project, the solar kit, would be complete within the next year. However, he still had reservations about launching the product and had to make some key decisions before it could be ready for the market. What would be his next steps on the path to democratize solar energy?