Business - Ethics, Governance & Risk

June 2023 Examination

Note: This assignment is application based, you have to apply what you have learnt in
this subject into real life scenario. You will find most of the information through
internet search and the remaining from your common sense. None of the answers
appear directly in the textbook chapters but are based on the content in the chapters,
directly or indirectly.

1. What is the ethical principle that underpins risk management concept and how does
a listed company’s board manage enterprise risk? Explain with the help of an example
from the annual report of any ONE listed co (from NSE top 500 companies by market
capitalization) the key initiative taken by the selected company in FY2021-22 to manage
ONE financial risk and ONE non-financial risk. (10 Marks)

Ans 1.

Introduction

Reliance Industries

Ethical standards are part of normative theory that clears, justifies, and defends moral
judgments/regulations. They may be impartial and aren't dependent on one's subjective
viewpoints.

The ethical principle that underpins the risk management concept is accountability.

Accountability is crucial for employees and people to be held to a firm's righteous

requirements. If the wide variety of group contributors supports a business' moral code, it
could help the company minimize threats. This creates a lifestyle of excessive ethical
expectancies that motivate all crew individuals to act ethically in inclusive areas.

Managing time

Producing an appropriate quality and quantity of work

Using company resources

Enterprise risk management at Reliance

The risk landscape in the current business environment is volatile and changing dynamically.
The company's danger management framework helps the control to-

a) Identify certain risks and evaluate the overall potential exposure.

b) Decide how effectively to deal with those uncertainties to manage overall exposure.

c) Divide and allocate resources and manage those uncertainties.

d) Obtain assurance over the efficiency of the man.

Concepts and applications

Despite the take the place of the pandemic and its consequences of a challenging and
unpredictable environment, virtual offerings have, in addition, consolidated their rank as one
of the world's most extensive and quickest-growing cord line facts networks and cell and
featured the country's most enormous subscriber base.

The Virtual business has adopted various measures for sustained patron revel concerning
advanced usage and billing experience throughout all contact factors, anywhere, anytime,
mobile and wire line broadband networks get admission to the maximum efficient elegance
customer support subsidized by AI Bots and application-based QRC procedure, agile model
and tariff pricing even as growing its platforms and systems. Customer engagement remains
strong with gross company additions of subscribers, the considerable increase in net MNP
subscribers, and Inc.

Reliance danger management framework builds agreement with and safety and allows the
achievement of the firm's strategic goals by managing uncertainties. Their care is a
commonplace, unifying thread that runs through the whole lot they do for the company. At
Reliance, they are continually operating to deliver a sustainable future together with their
stakeholders. Reliance's integrated hazard control makes a specialty of robust threat control
and grabbing opportunities.

One non-financial risk that is managed by Reliance industries-

Climatic dangers- risk reaction addressing climate variation through electricity transition is a
strategic objective of Reliance Industries' business continuity plans. They believe if antique
strength is formed and creates weather exchange risk, new or latest power is poised to offer a
dependable approach to weather change. Reliance has introduced internet carbon 0 goals for
2035, above compliance needs and business imperatives. Their purpose is to invest 75,000
crores by 2024 to-.

a) Enable at least 100 giga watts of solar energy by 2030

b) Create four giga factories to create an integrated, end-to-end renewable energy ecosystem.

c) Invest in an increase in efficiency of the value chain, future technologies and partnerships
involving downstream and upstream industries.

d) Remodel Reliance industries' business to net carbon-0 operations. They have a 15-year
imagination and are prescient to recreate Reliance as one of the global's top new energy and
new substances employers. The roadmap includes building sustainable energy materials and
sources for the country's destiny requirements, creating international-class assets that
manufacture pure substances and fuels of the future, and developing subsequent-generation
storage technologies and carbon capture to transform carbon dioxide into use.

Financial risks mitigated by the company are-

Insurance – Risk Mitigation

Reliance workings might also contain the situation of numerous situations which are entirely
within the company's management and could actively affect its operations. Reliance
maintains a sturdy threat management exercise to cover such cases by moving the insurable
uncertainty to the insurer. Mostly safety is on a threat basis which involves cover against
explosions, fire, natural catastrophes, terrorism, breakdown, and so on. an entire coverage
application is created to maintain good enough protection for all property belonging to
Reliance industries against the legal responsibility arising from business activities. Protective
design is excellent in class and guarantees the company's operations are handled.

Leading side technology -Governance, chance, Compliance, and Audit (GRCA 2.0) Platform

The GRCA second model program, an inbuilt platform on open-source technology, has
enabled actual-time actionable dashboards and real-time monitoring of risks and mitigating
them across three traces of defense. The platform allows control assessing through automated
actual-time monitoring of time decisions, exception signals, and scalable and agility. The
venue, statistics analytics capabilities, and a robust ERP system are used for risk
management.
Conclusion

Reliance Industries has also invested in cutting-edge technology startups, which include
Block chain, AI/ML, Bot, NLP/speech, mobility and 5g network, metaverse, cloud and edge
computing, and robotics. Those technologies will further increase the efficiency of the value
proposition and client experience.

Reliance retail is a consumer-centric organization that adapts to variations in customer

desires, options, and shopping conduct through marketplace assessment to stay abreast of
emerging funds. Entering new categories, adapting products to suit changing consumer needs,
and launching new store designs are a few initiatives undertaken to cope with modernization.

2. From the Sustainability Report (FY2021-22 or 2022-23) OR Business Responsibility

& Sustainability Report (FY2021-22 or 2022-23 Annual report) of any one listed
company from across the globe, select any ONE Carbon Emission reduction initiative
adopted and practiced by the company. Explain the initiative in your own words and
analyse if it is effective/outcome driven or not, if yes provide quantitative proof for the
same. (No diagram/graphic or table required). (10 Marks)

Ans 2.

Introduction

Microsoft

The consequences of weather change are increasingly apparent, from devastating flooding to
wildfires. The absolute truth of weather exchange is more extraordinary than ever- to change
the worst effects of the consistently changing weather, the world must transition to a net zero
carbon emissions economy by using 2050. However, climate trade still requires more
strategies to avoid catastrophic environmental hazards. The sector requires agreement on the
meaning of worldwide internet 0 emissions, mature markets for carbon reduction, the size of
track the progress toward net zero, and removal, which are needed to get us there. Microsoft
addresses these three regions through our operations, advocacy, and technology to power the
exchange society needs.
Microsoft's approach to attain the goal of Carbon negative by using 2030 is simple- they will
reduce their scope 1 and 2 emissions to near zero by enhancing efficiency, buying 0-carbon
power, and adopting new solutions. They are engaging vendors and their businesses to cut
their scope three emissions by more than 40 percent, and they will rely on carbon removal to
attain Carbon terrible.

Concepts and applications

Let’s discuss the techniques followed and applied with the aid of Microsoft to reduce net
carbon emissions-

a) Lowering scope 1 and 2 emissions throughout the company's operations- In each

building at each statistics Centre and campus, sustainability is the number one priority for the
company throughout all phases of a challenge- from operations and decommissioning to site
selection to design and creation. by 2025, we are deemed to reduce our scope 1 and 2 carbon
emissions to nil.

b) Decreasing carbon emissions with performance solutions- ensuring the employer's facts
centers and campuses are electricity-green is a number one step in reducing our emissions.
We are constantly changing how we perform and build facilities, using all-electric green
gadget designs like thermal strength and geothermal electricity discovery and improving the
efficiency of our cloud.

c) Building for LEED can provide 0 carbon certifications- we are pursuing zero carbon
emission for our Redmond and Silicon Valley campus modernization initiatives, including
international dwelling Futures Institute. We have committed to certifying our significant
offices and facts centers to LEED platinum or gold, with an objective on the kinds of
atmosphere and electricity, materials and waste, water performance, transportation and
region, sustainable websites, and indoor environmental conditions. Four data centers are
LEED gold, and 74 are going through the certification process.

d) Using and deploying AI to enhance energy efficiency- Microsoft is the usage of Bonsai,
a low-code AI platform that is a part of the self-sufficient structures suite from the
organization, to increase the performance of its Redmond campus chiller flowers. Those
chiller plants provide air conditioning through an HVAC device and typically constitute a
considerable part of the energy footprints of homes. Based on strength predictions, we have
located a 12 percent increase in median effectiveness and plan to execute Bonsai within the
12 remaining chiller plants this accounting year. In the past, strength conservation techniques
projects took extra than one year. Bonsai enabled us to create a version and test
recommendations with comparable results in four or more weeks.

e) Designing and running enormously efficient information centers- All future facts
centers will be LEED Gold certified, specializing in energy and water conservation. All
lighting is high-effective LED with the motion to detection to lessen using space light.
Cooling systems are included with the servers, cooling when the server needs it.

f) Increasing carbon awareness and reducing Carbon in cloud operations- We, as a

company, are piloting new strategies that reduce the carbon footprint of our code and large-
scale workloads for Microsoft and its customer benefit. We drove the present-day
characteristic, star/stop VMs, which can flip off VMs all through idle hours. Our engineers
have also shaped more transparency inner Azure machine learning, showing resource metrics
to assist records practitioners in assessing and eliminating the hidden costs in their machine
learning workloads. They partnered with the Allen Institute for AI to develop the most
efficient tools and practices in this space.

We formed the Carbon aware middle, which assists schedule workloads in regions and
instances with the lowest carbon footprint, piloted by Microsoft 365, a Microsoft studies and
development and may be provided as an open-source toolkit thru the green software
foundation. Engineers are also evaluating and deploying novel techniques like Kubernetes to
take advantage of grid-stage functions in carbon depth to lessen Carbon.

In step with my research, Microsoft has achieved a high-quality process in decreasing internet
carbon emissions till now. It has formulated loads of policies and strategies to achieve the
goal.

Quantitative proof

This year, the corporation's most exciting movement has been its work to remove Carbon
from the environment. We are pronouncing that we've bought the elimination of 1.3 million
metric heaps of Carbon from sixteen providers throughout 25 tasks.

That is a massive soar and a practical step. Moreover, this is the most extensive annual
carbon elimination buy any employer has ever made. It's miles growing a new and dynamic
financial market that the sector requires. However, it's handiest a primary step compared to
what we must reap by 2030. using the company's moons hot analogy, we think of it this way,
if our objective is to reach the moon by the cease of 2030, that is much like sending an
astronaut into orbit around the earth.

Conclusion

The company's goal is to empower each character and company on the globe to achieve more.
This is inclined to the belief that business ambitions to make good answers to the planet's and
people's issues.

3. a. ‘Professionals such as doctors, accountants and lawyers have a charter/framework

of code of conduct, duties and obligations that other people do not.’ Why is that so?
Present your point of view with its supporting arguments/reasons. (Two points of
view/reasons with explanation is good enough) (5 Marks)

Ans 3a.

Introduction

A professional code of conduct is a set of principles that assist a company in governing its
selection-making and choosing between proper and wrong. Usually known as a moral code,
these standards design the project and values of an organization, how the professionals in the
organization are supposed to technical problems, and the requirements to which employees
are held.

Concepts and application

All of the stated professions shall provide competent representation for their customers. The
Ready illustration needs legal, healthcare, and financial knowledge for the picture. Attorneys,
doctors and accountants have a charter/framework or code of behavior, as those professions
exist independently of their employment.

These professions are held to a prevalent code of ethics due to their chosen career. The
American professional affiliation addresses everything from the consumer's care to
relationships with other staff members.

For example- A doctor shall offer competent medical care with respect and compassion for
human rights and dignity.
A lawyer shall uphold the standards of professionalism, be sincere in all interactions with his
customer and attempt to file attorneys poor in competence or individual or engaging in
deception or fraud to eligible entities.

An accountant shall comply with ten accounting requirements and recognize a duty to find
versions of the desires that are contrary to the patient's great hobbies.

Specific laws dictate professional behavior in a few sectors, which include public fitness and
finance. In other sectors, a code of ethics may be voluntarily followed.

for example- a company that does not always focus on climate exchange might still element
its focus on sustainability in its legitimate code of ethics.

Conclusion

A professional code of conduct presents a set of guidelines organizations or teams can use to
make informed decisions in the workplace. It allows us to set a baseline expectation for what
is suitable and a way to method problems. An expert code of behavior can assist personnel in
running with integrity and operating truly, which can help assemble a healthier work
environment.

3. b. Choose any one ethical principle from the below list and with the help of a day-to-
day work place process or practice showcase how your company/ any company delivers/
does not deliver on the chosen ethical principle. List of ethical principles: Transparency,
Fairness, Responsiveness, Dignity. (5 Marks)

Ans 3b.

Introduction

ABC Ltd works with various moral standards as a responsible corporation, including
transparency, dignity, equity, and responsiveness. We saw that it's far requested inside the
query to select the handiest moral principle. We have chosen transparency as our critical
moral principle.

Concepts and applications

While we are a fan spare element manufacturing employer, and our paramount recognition is
on generating great products to sell to our customers.

The moral precept we have selected is transparency.

Daily work transparency

Our daily work development starts with winding the capacitor with the capacitor movie and
wrapping it with tape. Then warm it to a 100-degree temperature. Then the next step is to
coat the heated movie wraps, and the wires are linked. The next step is to shoot the circuit of
the capacitor and then epoxy it with the chemical.

The final step involves checking out and packing the product. The work is performed
transparently, and nothing is hidden from our customers and consumers. Our carriers are also
aware of our production method.

The quantity we manufacture daily, the form of capacitor film we use, the pleasant plastic we
can use, and the wires we connect are all excellent, and our customers are well aware of it.

Transparency with providers

We communicate transparently with all our carriers and are clear approximately the delivery
chain. Those open communications with our transparent companies will result in a company
we are proud of.

Transparency with the customers

We must ensure that our transparency is the number one issue of our startup marketing.
Whether that consists of or excludes a page on our internet site that discusses our supply
approaches, marketing on social media, or sending notes with the goods to our buyers. being
transparent with them creates the belief that will ultimately result in customer loyalty.

Conclusion

A business with a clear vision and working style will eventually cause an enterprise we're
proud of. It will be a hit business as transparency will help us construct relations with our
customers, vendors, and others. All stakeholders admire clarity, so the organization must
keep it throughout production and selling.