Q.4 Mr. X is a billionaire businessman who heads a conglomerate engaged in insurance, energy generation and distribution, and manufacturing. Despite being globally known as a great philanthropist, he turned down a shareholder request seeking the disclosure of the conglomerate’s actions on issues related to climate change as well as diversity and inclusion. Because of increased attention to climate and diversity issues, many leading firms have committed themselves to incorporate relevant considerations in their business strategies. Therefore, some industry-observors wonder if Mr. X is out of touch with the industry at large and have warned him that failing to address climate change issues puts his businesses under systemic risk. But, Mr. X maintained his vote against the disclosure proposal, while at the same time acknowledged the importance of both climate change and a diverse and inclusive work force. However, Mr. X believes that such ethical issues take secondary importance to maximising shareholder profit. (a) Discuss the importance of including climate change strategies and diversity and inclusion in a business organisation? (b) In your opinion, what matters more for a business organisation – socio-environmental concerns or shareholder profit? (c) How can the two above-mentioned issues be reconciled? (20 Marks)

Mentor’s Comments-

  • Provide a brief introduction to the case-study and discuss the importance of including climate change strategies, diversity and inclusion in the firm.
  • Provide a balanced discussion of the relevance of share-holder wealth maximisation for firm and socio-environmental concerns.
  • Mention some key measures through which both the issues can be reconciled.
  • Conclude accordingly.
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