Overview
Risks and opportunities related to ESG matters may have an unfavorable, favorable, or neutral effect on financial statements. These matters directly and indirectly impact financial statements, such as through increased compensation expenses for raising women and minorities’ pay or through a reduction in sales due to publicity of a negative environmental event. Businesses will rely on accountants to help with the analysis and measurement.
Directions
Choose one of the ethically responsible companies and review that company’s most recent 10-Q and 10-K financial statements. You may also review the company’s website for any additional ESG data. Prepare a memo to the investment advisor summarizing the results, risks, and rewards of their ESG programs.
Ethically Responsible Companies
- Microsoft
- Caterpillar
- GoodRx
- Sherwin-Williams
- Marriott
Specifically, you must address the following rubric criteria:
- Summarize the primary ESG initiative(s) of the chosen company.
- Explain how these programs may directly or indirectly impact financial statements.
- Discuss measurable program results that might not be reflected in the financial statements.
- Provide evidence for ESG program impact based on the financial statements. Consider the following in your response:
- Outline any related changes in cost of goods sold, sales, legal fees, etc.
- Discuss whether the ESG programs have already had a financial impact on the company. Consider the following in your response:
- Identify whether the company has outlined any changes resulting from their ESG program.
- Explain whether any footnotes discuss ESG programs.
What to Submit
Submit your memo as 1- to 2-page Microsoft Word document with single spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style.
Module Eight Memo Activity Rubric
| Criteria | Exemplary (100%) | Proficient (90%) | Needs Improvement (70%) | Not Evident (0%) | Value |
|---|---|---|---|---|---|
| ESG Initiative(s) | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner | Summarizes the primary ESG initiative(s) of the chosen company | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to the primary ESG initiative(s) of the chosen company | Does not attempt criterion | 15 |
| Impact | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner | Explains how these programs may directly or indirectly impact financial statements | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to how these programs may directly or indirectly impact financial statements | Does not attempt criterion | 15 |
| Measurable Program Results | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner | Discusses measurable program results that might not be reflected in the financial statements | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to measurable program results that might not be reflected in the financial statements | Does not attempt criterion | 15 |
| Financial Statements | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner | Provides evidence for ESG program impact based on the financial statements | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to evidence for ESG program impact based on the financial statements, including related changes in cost of goods sold, sales, legal fees, etc. | Does not attempt criterion | 15 |
| ESG Programs | Exceeds proficiency in an exceptionally clear, insightful, or sophisticated manner | Discusses whether the ESG programs have already had a financial impact on the company | Shows progress toward proficiency, but with errors or omissions; areas for improvement may include adding details related to whether the ESG programs have already had a financial impact on the company, including whether the company has outlined any changes resulting from their ESG program or whether any footnotes discuss ESG programs | Does not attempt criterion | 20 |
| Clear Communication | Exceeds proficiency with an intentional use of language that promotes a thorough understanding | Consistently and effectively communicates in an organized way to a specific audience | Shows progress towards proficiency, but communication is inconsistent or ineffective in a way that negatively impacts understanding | Shows no evidence of consistent, effective, or organized communication | 10 |
| Citations and Attributions | Uses citations for ideas requiring attribution, with few or no minor errors | Uses citations for ideas requiring attribution, with consistent minor errors | Uses citations for ideas requiring attribution, with major errors | Does not use citations for ideas requiring attribution | 10 |
| Total: |