first page is the background information and questions for the assignment. second pages it from...

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On March 21, 2022, the SEC proposed rules that would require public firms to provide certain climate-related information in their annual reports. Firms will be required to provide climate-related risks such as greenhouse emissions that are reasonably likely to have a material impact on their business, results of operations, or financial condition. Please read the following articles on practitioners' responses to the SEC rules on climate-related information and answer the required questions: article 1 article 2 article 3 Questions: 1. What is ESG reporting? 2. What are the benefits of ESG reporting to the firm? 3. What are the challenges facing ESG reporting? 4. Discuss the proposed SEC rules on climate-related disclosure and provide your opinion on their pros and cons to various stakeholders. 5. Review the annual reports of the two corporations analyzed for Project 1 and summarize its ESG strategy. (attached uploaded file... United Continental Holdings) Question 1 ESG reporting, or environmental, social, and governance reporting, is the practice of providing detailed information about a company's performance in terms of its environmental, social, and governance (ESG) objectives. This information is provided to stakeholders, such as shareholders, employees, and customers, in order to demonstrate the company's commitment to sustainability and ethical business practices. ESG reporting is becoming increasingly important in the business world as companies strive to be better corporate citizens and to demonstrate their commitment to sustainability. The primary goal of ESG reporting is to provide stakeholders with an understanding of how the company is performing in terms of its ESG objectives. Companies that provide detailed ESG reporting can demonstrate their commitment to sustainability and ethical practices, which can in turn help them to attract and retain customers, employees, and investors. Additionally, ESG reporting can help a company to understand its impact on the environment and society, and to identify areas for improvement. ESG reporting typically includes information about the company's environmental performance, such as its greenhouse gas emissions, water use, and waste management practices. It also includes information about the company's social performance, such as its policies related to human rights, labor practices, and diversity. Finally, it includes information about the company's governance practices, such as its corporate governance policies, risk management strategies, and corporate social responsibility initiatives. In recent years, there has been an increasing demand for ESG reporting from investors, customers, and employees. As a result, many companies have begun to provide detailed ESG reporting as part of their annual reports. The Securities and Exchange Commission (SEC) has also proposed rules that would require public companies to provide more detailed ESG information in their annual reports. In conclusion, ESG reporting is an important practice for companies to demonstrate their commitment to sustainability and ethical business practices. By providing detailed information about their environmental, social, and governance objectives, companies can attract and retain customers, employees, and investors. Additionally, ESG reporting can help a company to identify areas for improvement and to understand its impact on the environment and society. Question 2 The benefits of ESG (environmental, social, and governance) reporting to the firm are numerous, ranging from increased investor confidence to improved employee morale. ESG reporting is beneficial to the firm in that it demonstrates the company's commitment to sustainability, ethical business practices, and corporate social responsibility. By providing detailed information about the company's performance in terms of these objectives, firms can gain a competitive advantage and attract and retain customers, employees, and investors. First and foremost, ESG reporting provides a higher level of transparency to stakeholders. By providing detailed information about their performance in terms of their ESG objectives, companies can demonstrate their commitment to sustainability and ethical business practices. This can help to build investor confidence, as investors are more likely to invest in companies that are transparent about their sustainability efforts and ethical standards. Additionally, by providing detailed ESG information, companies can attract and retain customers, employees, and investors, as these stakeholders are increasingly interested in working with companies that demonstrate a commitment to sustainability and ethical business practices. Second, ESG reporting can help companies to identify areas for improvement. By providing detailed information about their performance in terms of their ESG objectives, companies can gain an understanding of their impact on the environment and society, and can identify areas where they can improve. This can help to ensure that companies are taking steps to reduce their environmental impact, improve their social and governance practices, and ultimately become better corporate citizens. Third, ESG reporting can help to attract and retain talent. By providing detailed information about their ESG objectives, companies can demonstrate their commitment to sustainability and ethical business practices, which can help to attract and retain talented employees. Additionally, ESG reporting can help to improve employee morale, as employees are more likely to be motivated by working for a company that is taking steps to reduce their environmental footprint and improve their social and governance practices. Finally, ESG reporting can help to reduce a company's costs. By providing detailed information about their ESG objectives, companies can identify areas for improvement, which can help to reduce their costs by reducing their environmental impact and improving their social and governance practices. In conclusion, ESG reporting is beneficial to the firm in numerous ways. By providing detailed information about their ESG objectives, firms can gain a competitive advantage, attract and retain customers, employees, and investors, identify areas for improvement, improve employee morale, and reduce their costs. Question 3 The challenges facing ESG (environmental, social, and governance) reporting are numerous, ranging from developing meaningful metrics to overcoming cultural resistance. ESG reporting is becoming increasingly important in the business world as companies strive to demonstrate their commitment to sustainability and ethical business practices. However, there are a number of challenges that companies face when attempting to implement ESG reporting. First, companies face the challenge of developing meaningful metrics that accurately reflect their performance in terms of their ESG objectives. ESG reporting typically includes information about the company's environmental performance, such as its greenhouse gas emissions, water use, and waste management practices. It also includes information about the company's social performance, such as its policies related to human rights, labor practices, and diversity. Finally, it includes information about the company's governance practices, such as its corporate governance policies, risk management strategies, and corporate social responsibility initiatives. Developing meaningful metrics to accurately reflect all of these objectives can be a challenge. Second, companies face the challenge of overcoming cultural resistance to ESG reporting. Many companies are still reluctant to engage in ESG reporting, as they may view it as time-consuming, costly, and unnecessary. Additionally, some companies may be hesitant to provide detailed information about their environmental, social, and governance practices for fear of being judged or criticized. Companies must be proactive in overcoming this cultural resistance and demonstrating the importance of ESG reporting. Third, companies face the challenge of ensuring the accuracy and reliability of their ESG reporting. Without reliable metrics and data, ESG reporting can be misleading and can lead to inaccurate conclusions. Companies must ensure that they have reliable metrics and data in order to provide accurate and meaningful information about their performance in terms of their ESG objectives. Fourth, companies face the challenge of developing effective strategies to communicate the results of their ESG reporting. Once the company has developed reliable metrics and data, it must develop an effective strategy for communicating the results of its ESG reporting to stakeholders. This may include developing reports and presentations, hosting webinars, and engaging in other forms of communication. In conclusion, the challenges facing ESG reporting are numerous. Companies must develop meaningful metrics, overcome cultural resistance, ensure the accuracy and reliability of their ESG reporting, and develop effective strategies to communicate their results. By addressing these challenges, companies can demonstrate their commitment to sustainability and ethical business practices and gain a competitive advantage. Question 4 First Part of the Question The proposed SEC rules on climate-related disclosure require public companies to provide investors with specific information about climate-related risks that may have a material impact on their business, financial condition, and results of operations. The SEC's proposed rules, which were announced on March 21, 2022, would require companies to disclose, among other things, their direct and indirect greenhouse gas emissions, the total amount of greenhouse gas emissions related to their operations, and the financial and operational impacts of climate-related risks, such as extreme weather events, sea level rise, and changes in global temperatures. The proposed rules would require companies to provide information about their climate-related policies, goals, and strategies, including those related to reducing their carbon footprint, mitigating climate-related risks, and transitioning to a low-carbon economy. Companies would also be required to disclose how they consider climate-related risks when making long-term investment decisions, such as capital expenditures and acquisitions. The proposed rules would also require companies to disclose how they engage with stakeholders on climate-related issues and how they manage their climate-related risks. Companies would be asked to describe the processes they have in place to identify, assess, and manage climate-related risks, and any changes they have made to their processes in the last three years. The proposed rules would also require companies to disclose the financial and operational impacts of climate-related risks, including those related to extreme weather events, sea level rise, and changes in global temperatures. Companies would have to disclose any actions they have taken to mitigate these risks, such as investments in renewable energy sources, energy efficiency measures, and other sustainability initiatives. The proposed rules would also require companies to provide narrative disclosure about climate-related trends and uncertainties that may have a material impact on their business, financial condition, and results of operations. This narrative disclosure would include, among other things, a description of how climate-related risks could impact their business, how they are responding to climate-related risks, and their plans for future engagement with stakeholders on climate-related issues. The proposed rules would also require companies to provide information about the effect of climate-related risks on their liquidity and capital resources, such as their ability to meet their debt obligations and to access capital markets. Companies would be required to disclose any potential liabilities related to climate-related risks, such as litigation or regulatory proceedings. Overall, the proposed rules are intended to help investors better understand and evaluate a company's climate-related risks, so they can make informed investment decisions. The rules are also intended to improve transparency and accountability around climate-related risks and encourage companies to take action to mitigate such risks. The SEC is currently accepting public comments on the proposed rules and expects to issue a final rule by the end of 2022.' Second Part of the Question The proposed SEC rules on climate-related disclosure offer several potential benefits to various stakeholders. For investors, the proposed rules would provide them with more comprehensive and reliable information about a company's climate-related risks, enabling them to make more informed investment decisions. The proposed rules would also provide investors with greater transparency and accountability around a company's climate-related risks, which could help to protect their investments. For companies, the proposed rules would provide greater clarity around the disclosure requirements and could help them to better manage their climate-related risks. The proposed rules would also encourage companies to take action to mitigate their climate-related risks, which could help to reduce the financial and operational impacts of such risks. For regulators, the proposed rules would provide additional oversight into a company's climate-related risks, which could help to protect investors and ensure that companies are adhering to their disclosure requirements. The proposed rules could also help to create a level playing field for companies, as all companies would be required to provide the same amount and type of disclosure. However, the proposed rules could also have some drawbacks. For companies, the proposed rules could impose additional costs and burdens, as they could be required to hire additional staff to manage the disclosure process and to monitor their climate-related risks. The proposed rules could also result in increased competition, as investors may favor companies that are taking action to mitigate climate-related risks. In conclusion, the proposed SEC rules on climate-related disclosure offer potential benefits to various stakeholders, but they could also have some drawbacks. It remains to be seen whether the proposed rules will result in improved transparency and accountability around climate-related risks and whether they will encourage companies to take action to mitigate such risks. Question 5 The United Continental Holdings, Inc. (UAL) is a global airline holding company, with United Airlines and Continental Airlines as its two major operating airlines. UAL is committed to leading the aviation industry in a sustainable manner, with its corporate mission to "connect people and unify the world". UAL has been a leader in sustainability within its industry, with a commitment to investment in renewable energy, a proactive approach to reducing carbon emissions, and a commitment to reducing its water and landfill usage. UAL's sustainability strategy is rooted in its corporate mission to improve its environmental performance through responsible environmental stewardship and resource management. The company's corporate sustainability strategy focuses on four key areas: investing in renewable energy, reducing carbon emissions, reducing water and landfill usage, and investing in sustainability initiatives. Investing in Renewable Energy: UAL is committed to investing in renewable energy sources to reduce its environmental impact

discussion-2-cyg2e4ov.docx

Mayuri · Accepted Answer

1. What is ESG reporting? 
Across the globe, companies are focusing on making sustainable choices. They're working towards minimizing their operations’ impacts on biodiversity.  “There is a real need to evaluate businesses on parameters that are related to environmental, social, and governance aspects and somewhere this is also happening due to changing societal mindset where various stakeholders including consumers activists investors of them, demand more transparency in businesses.” (Sommer, May 19, 2022) ESG refers to environmental, social, and governance issues which investors use to evaluate themselves and to set standards that the companies need to abide by uh to obtain funding. ESG reporting is the disclosure report by a company covering its operation in three areas environmental social and corporate governance companies worldwide are increasingly orienting themselves according to the popular ESG practices. “It helps them reflect positively on their operation’s direct and indirect effects on the environment and on the well-being of stakeholders ESG reporting by a company, would indicate that they have long-term visions for the three P’s that is people, profit, and the planet.” (Sommer, May 19, 2022) Therefore, such reports suggest that the business will work towards adopting ethical and socially just practices and not just work for financial gains such reporting can help the company to reflect a positive image among the investors too it provides a rundown of the impact of businesses in these three areas for the investors.
2. What are the benefits of ESG reporting to the firm? 
a. It aims to establish a link between the financial results of the business with the ESG performance SEC has mandated.
b. The sustainability reporting requirements by listed companies to enable businesses to engage more meaningfully with their stakeholders.
c.

On March 21, 2022, the SEC proposed rules that would require public firms to provide certain climate-related information in their annual reports. Firms will be required to provide climate-related...

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