“Non‐Financial” Is a Misnomer,but Doesn't Have to Be a Missed Opportunity

With enterprise values now representing increasing multiples of companies' net book assets, investors are clearly looking beyond financial reporting for enhanced insights and understanding of when and how companies are adding value. This shift includes growing attention to environmental, social, and governance (ESG) information. Although ESG data presents its own unique challenges, dismissing it as “non‐financial” can be misleading. When explicitly linked to a company's long‐term value creation strategy, ESG information can serve as a valuable input to more farsighted financial analysis. Market‐driven initiatives, notably that of the Sustainability Accounting Standards Board (SASB), aim to standardize a subset of business‐critical, industry‐specific sustainability data for investors. Research indicates such approaches can generate positive outcomes not only for providers of financial capital, but for their portfolio companies and markets in general. In illustrating these concepts, the authors explore ESG impacts in three sectors and industries, while examining how access to consistent, comparable, reliable sustainability information in those sectors can augment an analysis of traditional business fundamentals. One example focuses on water management in the Oil & Gas Exploration & Production industry, a major environmental issue where geographic considerations can shed light on company‐specific exposures to cost increases, production disruptions, increased CapEx and R&D spending, as well as the potential for asset write‐downs. In the Food & Beverage sector, health and nutrition concerns are shown to be changing consumer preferences, triggering regulatory action, and reshaping companies' product portfolios—with significant implications for the companies' brand values and ability to compete for market share. Finally, in Aerospace & Defense, lapses in business ethics such as bribery of government officials present a governance challenge that comes with the risk of value‐destroying fines and penalties and, even more significant, associated reductions in revenues.     

Impacts of climate change on lower Murray irrigation*

This article evaluates irrigated agriculture sector response and resultant economic impacts of climate change for a part of the Murray Darling Basin in Australia. A water balance model is used to predict reduced basin inflows for mild, moderate and severe climate change scenarios involving 1, 2 and 4°C warming, and predict 13, 38 and 63% reduced inflows. Impact on irrigated agricultural production and profitability are estimated with a mathematical programming model using a two‐stage approach that simultaneously estimates short and long‐run adjustments. The model accounts for a range of adaptive responses including: deficit irrigation, temporarily following of some areas, permanently reducing the irrigated area and changing the mix of crops. The results suggest that relatively low cost adaptation strategies are available for a moderate reduction in water availability and thus costs of such a reduction are likely to be relatively small. In more severe climate change scenarios greater costs are estimated. Adaptations predicted include a reduction in total area irrigated and investments in efficient irrigation. A shift away from perennial to annual crops is also predicted as the latter can be managed more profitably when water allocations in some years are very low.     

Beach safety education for primary school children

Childhood drowning remains a serious public health problem worldwide. The Australian Water Safety Council has set as one of its highest priorities the reduction of drowning deaths in children aged 0–14 years. However, concerns have recently been raised that many students completing primary school still lack the ability to recognize potential aquatic risks, cope with emergencies or assist someone else in danger. In this study, 107 primary school children aged 11–12 completed a one day training programme led by surf lifesaving instructors. Pre, post and eight week follow-up measures showed statistically significant improvements in recognition of the red ‘beach closed’ flag, aquatic safety signs, how to identify a rip current and choosing the safest place to swim at a beach that included a rip current in the picture. Following training students were more willing to provide first aid assistance to family members and friends in an emergency situation. Findings reinforce the value of school-based training that provides a general foundation for aquatic safety, with the caveat that current programmes must be evaluated to ensure their content has a robust prevention focus.     

Estimating the impact of farmer field schools in sub‐Saharan Africa: the case of cocoa

This study measures the economic impact of the first phase of the Cocoa Livelihood Program (CLP‐I), a current World Cocoa Foundation (WCF) project, sponsored by the Bill and Melinda Gates Foundation and aimed at improving the livelihood of over 200,000 small cocoa producers in sub‐Saharan Africa via training, crop diversification, and farmer‐based organizations. Using data collected from 2,048 pre‐ and post‐CLP‐I interviews of cocoa producers in Ghana, Cote d'Ivoire, Nigeria, and Cameroon, the results show that yield enhancements attributable to CLP‐I are 32%, 34%, 50%, and 62% in Ghana, Côte d'Ivoire, Nigeria, and Cameroon, respectively. Using a total program cost of $151–$200 per beneficiary and estimated annual benefits of $109–$322 per beneficiary over 25 years, the benefit‐cost ratios are estimated to range from $18 to $62 for every dollar spent on human capital development. These results suggest the WCF should endeavor to increase the number of farmers who receive all, not some, of the components of the program. This would not only help ensure that each producer obtains as much human capital as possible from each of the training programs but increases the probability of reaching the CLP goal of doubling the income of cocoa‐growing households.     

数字赋能企业商业生态系统跃迁升级的机理及路径研究

数字技术应用融合叠加商业模式创新催生商业生态新业态,实现跃迁升级。本文结合扎根理论与模糊集定性比较分析（fsQCA）方法,阐释数字赋能企业商业生态系统跃迁升级的机理,探究多重组态路径。从生态视角揭示了数字资源通过与传统要素资源融合释放数据价值,并驱动形成价值循环体系、实现价值共创、塑造商业群落,最终实现企业商业生态系统跃迁升级。基于fsQCA的多组态分析发现,数字赋能企业商业生态系统跃迁升级历经两个阶段分别为价值共创和商业群落生成。其中,价值共创实现有两条组态路径,即产品创新与要素融合相组合,技术融合同低产品创新、低数据资产相组合,且产品创新构成了价值共创的核心条件。商业群落生成的组态路径表现出以下特征：价值共创和价值链接协同下分别和网络组织、数据赋能相组合,网络组织和数据赋能互为替代,即在一方缺失时,分别与价值共创或价值链接组合实现商业群落构建。研究结论为企业商业生态系统的结构与功能持续优化,实现数字商业生态资源的充分共享及最优利用,提供了关键方法和思路。     

Audit Market Response to PCAOB Censures of US Big 4 Firms

Abstract

Subsequent to the first-ever Public Company Accounting Oversight Board (PCAOB) censure of a US Big 4 firm (Deloitte) in December 2007, there were two other PCAOB US Big 4 firm censures as of 2016 year-end. We examine whether these two post-2007 PCAOB censures of US Big 4 firms conveyed new information to the audit market. For both censures, we find little or no evidence of any change in the factual audit quality of the censured firm over a three-year window surrounding the censure. Our findings suggest that the quality control deficiencies (identified during inspection of specific audit engagements) that triggered the PCAOB censure were isolated occurrences rather than systemic to the firm at large, i.e., the censures do not imply an impairment in the US Big 4 firm's overall factual audit quality. We also find that the negative response of investors and audit committees documented in prior research for the 2007 Deloitte censure disappeared for the later US Big 4 firm censures. Given that the PCAOB inspects (and can censure) non-US auditors who audit US-listed foreign companies, our findings are of potential interest to regulators, investors and audit committees outside the US.     

‘Post‐Third‐World City' or Neoliberal ‘City of Exception'? Rio de Janeiro in the Olympic Era

This article considers processes of urban development within the context of mega‐event preparations in Rio de Janeiro. We begin with a brief overview of these development processes, highlighting their connections to political and economic change in recent years. Proponents of these mega‐event‐led initiatives argue that Rio is undergoing a period of inclusive growth and integration: a perspective we call here a ‘post‐Third‐World city' narrative of urban renewal. Critics, however, contend that urban officials are harnessing mega‐events (e.g. the 2014 World Cup and the 2016 Olympic Games) to push forward a neoliberal agenda of socially unjust policies benefiting the interests of capital and marginalizing the city's poor and especially its favelas (i.e. the ‘city‐of‐exception' thesis). In this article we explore the insights of these two perspectives and consider why they have grown popular in recent years. Though we side generally with the city‐of‐exception thesis, we argue that important geographic and historical particularities must also be accounted for. Without carefully situating analytical perspectives empirically—in particular, cases in which theoretical models are drawn from European and North American contexts—urban researchers risk concealing more than they reveal in analyses of rapidly developing countries like Brazil.