Answer -1 ->

Good business practises incorporate ethics. They are responsible for providing excellent
customer service, maintaining the company's reputation, and attracting the best
employees and business partners. Good ethics create a positive "tone at the top" and
company culture, all of which are required for establishing a successful ERM.
Since a corporation is essentially a legal fiction, it is necessary to have specific
individuals act as its representatives in various contexts. When it comes to the
corporation, directors serve not only as agents, but also as trustees.
Good governance relies heavily on the Board of Directors. The Board of Directors is an
integral part of how a company operates. The duties of a board are established by statute,
precedent, and accepted industry standards.
Today's boards must address problems of openness, disclosure, accountability,
sustainability, corporate citizenship, and globalisation. The Boards also have to adapt to
the ever-increasing needs of consumers. The Board of Directors' dual function is essential
to the development of a robust and competitive business sector that aspires to the highest
levels of ethical behaviour and social responsibility.
Therefore, in this Lesson they have discussed the purpose of a board, its powers and
duties, the types of directors that must be appointed in accordance with the law, the
proper make-up of a board, and the importance of having at least one independent
director.
The course also offers helpful information for evaluating and training board members.

HSBC Holdings Risk Management Framework – A strong culture—our shared

attitudes, beliefs, values, and standards—influences risk awareness, risk taking, and risk
management. Our employees manage risk, but the Board is ultimately accountable.
Risk management protects our customers, company, employees, shareholders, and
communities while supporting our strategy and guaranteeing sustainable development.
They prioritise business strategy implementation. They carefully control execution risks
throughout transformation efforts. Risk evaluations, including solutions, enable them
retain essential individuals for safe operation.
Our culture and values guide our risk management throughout the company and all risk
categories. Our risk management framework describes our fundamental concepts and
practises for managing financial and non-financial material hazards. The framework
supports risk awareness, continuous monitoring, and effective operational and strategic
decision-making and escalation. It also promotes a consistent, accountable approach to
identifying, analysing, managing, and reporting the risks they take and incur in our
actions. People and capabilities; governance; reporting and management information;
credit risk management models; and data are used to analyse and improve our risk
management system. Group Risk and Compliance challenges, oversees, and balances
risk/return choices independently from global companies, including sales and trading.

1. Financial Risk –
a. Wholesale credit risk
b. Retail credit risk
c. Treasury risk – insurance risk
 d. Treasury risk – pension risk
e. Traded risk
f. Strategic business risk
g. Reputational risk
2. Non-Financial Risk –
a. Regulatory compliance risk
b. Resilience risk
c. Model risk
d. Financial crime risk
e. Financial reporting risk
f. Legal risk

Financial Risk Management –

Wholesale credit risk –
➢ Identification and assessment - Based on their carbon emissions, our wholesale
credit customers in automotive, chemicals, construction and building materials,
metals and mining, oil and gas, and power and utilities had the highest climate
transition risk in 2019. They utilise a transition and physical risk questionnaire for
most clients in these industries to examine and understand how climate change
affects their business models and transition plans.
Relationship managers assist clients record questionnaire results and find
transition-supporting business prospects. Since 2020, the questionnaire has
included most of our biggest clients in agriculture, industrials, real estate, and
transportation, the next greatest climate change risk sectors. They expanded the
physical and transition risk questionnaire to more nations in 2022. Our risk
appetite measurements were constrained by industry-wide data and
methodological issues.
In 2023, they will expand the questionnaire to more clients and improve our
scoring methodology. They will also work with peers and regulators to include
climate into credit risk models. They design techniques and training to increase
questionnaire answer quality and accuracy.
➢ Management - Our 2022 credit risk policy required relationship managers to
remark on climate risk concerns in credit applications for new money requests.
They used a questionnaire-based climate risk rating technique to rate each
consumer. Relationship and credit risk management teams utilise the climate risk
score in portfolio management conversations. Data will improve the scoring tool.
In 2023, we'll integrate climate risk into credit risk management.
➢ Aggregation and reporting - The wholesale portfolio's six high transition risk
sectors and RWAs are reported internally.
They present the percentage of questionnaire replies with a board policy or
transition risk management strategy. Our quarterly Group Executive Committee
ESG management information dashboard includes our significant wholesale credit
exposures. To assure consideration of this risk type, a Wholesale Credit Risk
Management representative attends the Global Climate Risk Oversight Forum and
reports our exposure via the climate risk management information dashboard.
 Since 2019, they have received answers from clients in the six high transition risk
industries, which represent 59% of our exposure, a 7% increase from previothem
year. Sector-wise client responses are shown below.
The table below shows our financing to six high-risk areas, including
environmentally responsible and sustainable finance. Green funding for high-
transition major firms is also offered. 17.7% (2021: 18.2%). Following data and
process improvements, they restated the 2021 comparatives to reflect the new
2022 sector allocations and remove certain off-balance sheet exposures.

Non-financial risk –
Resilience risk –
➢ Identification and assessment - The identification and evaluation of physical and
transitional climate risks that might affect the organization's operational and
resilience capabilities are within the purview of our operational and resilience risk
function. They are gaining a better knowledge of the risks that our properties face
and evaluating the mitigating factors to maintain operational resilience.
➢ Management - Resilience and operational Risk management strategies are
continuously evaluated and improved to ensure that they stay applicable to newly
emerging hazards, such as those related to climate change. Our coworkers'
abilities are improved via training, regular contact, and committed mentoring.
➢ Reporting and compilation - With the goal of achieving net zero in our own
operations, they are especially interested in creating policies that make proactive
risk management easier and track our progress towards this strategic goal. The
Group's Climate Risk Oversight Forum has a representative from Operational and
Resilience Risk.
Answer -2 ->

Honda Business Responsibility and Sustainability Report – Honda has addressed

environmental challenges since the 1960s. Honda was the first automaker to comply with
the U.S. Clean Air Act, which was considered the most stringent at the time, by
developing the low-pollution CVCC engine in the 1970s.
Honda's 1992 Environment Statement guides their environmental efforts. The statement
emphasises reducing environmental effect across the product life cycle, from
procurement through design, development, manufacture, shipping, sale, usage, and
disposal.
The 2011 Honda Environmental and Safety Vision promotes the aforementioned
environmental measures and helps Honda remain a business society desires. As stated in
this vision, Honda's global business sites are reducing environmental impacts from
production and corporate activities to realise the joy and freedom of mobility and a
sustainable society where people can enjoy life. Reducing greenhouse gas (GHG)
emissions, which contribute to climate change, and energy usage, as well as effective
resource use.

In order to achieve a society with no negative effects on the environment in the future,
Honda will work to address the challenges of energy use, climate change, effective
resource utilisation, and clean air preservation through its proprietary technologies and
business operations –
➢ Triple Action to ZERO - Honda aspires to realise a recycling-based society with
zero environmental effect in order for people to live on the planet in a sustainable
way. As a result, the Company has set even loftier goals than our prior Triple
ZERO campaign. Efforts will centre on the Triple Action to ZERO idea, which
combines three aspects, namely carbon neutrality, clean energy, and resource
circulation, into a single concept.
➢ CO2 emissions, net zero by 2050 - In order to combat climate change, Honda
will strive to limit the global temperature rise to 1.5oC above pre-industrial levels
by minimizing carbon emissions from corporate activities and throughout the
product life cycle.
➢ 100% utilization of carbon-free energy by 2050 - Honda will go above and
beyond its typical endeavor of lowering energy risk in order to solve energy
challenges, with the goal of using clean energy both while using its products and
when doing business.
➢ 100% use of sustainable materials by 2050 - Honda will study the recycling of
materials, including the reuse and recycling of batteries, in order to address the
efficient use of resources. Honda will take on the extra task of creating goods
using sustainable materials with no negative environmental effects, going beyond
its prior programme targeted at lowering risks associated to resources and waste
management.

Three Initiatives to Reduce GHG Emissions –

Honda's full product life cycle results in around 80% of its CO2 emissions coming from
"use of products" emissions. Due to this, Honda makes and sells products that can be
confidently marketed as environmentally friendly goods. Honda also aims to decrease
CO2 emissions during consumption of all of its products.
Honda has implemented the following three programmes to date in an effort to lower
GHG emissions, particularly CO2 emissions, while increasing production and sales
internationally –
1. Improving internal combustion engine efficiency to reduce CO2 emissions
2. Using environmentally friendly technology and a variety of energy sources to
reduce CO2 emissions
3. Reducing CO2 emissions by using renewable energy sources and overall energy
management
Honda is gradually bringing them into effect, with the goal of achieving net zero CO2
emissions.
Honda has been carrying out the three projects in accordance with the 2011 Honda
Environmental Performance Standard (HEPS), a set of distinctive and high-level product
requirements.
To achieve zero environmental effect in 2050, Honda will develop the HEPS 2.0, an
improved version of the current HEPS.
A total of 27 models—18 motorcycle models, 6 car models, 3 power product models—
were HEPS-certified as a consequence of certification for items that were released in
FY2022. The overall number of HEPS-compliant items now stands at 356 models,
including 205 motorcycle types, 98 car models, and 53 power product variants.
Additionally, there were no errors in the general labelling or information about products
and services.

Advancing Powertrain Electrification - Honda encourages product electrification to

address climate change and energy diversification-induced changes in societal
requirements and structure.
Using renewable energy to power more electric items will reduce CO2 emissions and
climate change threats.
Electrified cars' batteries may power leisure activities and emergencies, enhancing
customers' lives.
Honda aims to electrify 15% of motorbikes, 30% of cars, and 36% of power products
globally by 2030. The Company is taking advantage of any new business prospects by
improving its product portfolio.

Corporate Activities Initiatives –

Honda is focusing on reducing energy consumption and CO2 emissions while
considering the potential for expanding production and sales globally, with the goal of
achieving net zero CO2 emissions and completely deriving power from carbon-free
energy sources in corporate activities by 2050.
Honda has been supporting carbon emission reductions through enhancing manufacturing
efficiency, encouraging energy-saving activities, transitioning to low-carbon energy
sources, and using renewable energy to achieve these goals.
Honda aggressively adopts the newest energy-saving technology and know-how when
developing or upgrading factories, such the Saitama Factory's Yorii assembly facility,
which achieved a 30% decrease in per unit energy usage compared to other Honda
plants*. To assist the energy-saving activities of different company sites across the globe,
the Company has created a structure for encouraging information exchange among
business sites and regions while also improving technical support from Japan.
Furthermore, Honda is actively promoting renewable energy all over the world.
In doing so, Honda chooses an approach that may directly help to CO2 reduction in local
areas. More specifically, the Company focuses on the installation of new power
generation facilities, first examining the installation within its premises and then
gradually expanding the scope to allow for greater use of the facilities.
The Boiling Springs Wind Farm in Oklahoma, where Honda will obtain 120 MW under a
virtual power purchase agreement (VPPA), will be into service in 2021. To offset CO2
emissions from its factories in Ohio, Indiana, and Alabama, Honda will buy and utilise
renewable energy certificates equal to the amount granted under the system.
Honda has entered into agreements in Japan to acquire renewable energy-derived
electricity supplied by solar power systems placed inside its plant grounds and
maintained by a third party. A 3.8-MW system and a 2.0-MW system have begun
operation at the Yorii assembly facility of the Kumamoto Factory and the Saitama
Factory, respectively.
In FY2022, Honda's corporate locations throughout the globe utilised 804 GWh of
electricity obtained from renewable energy sources such as solar and wind.
Honda will continue to employ renewable energy that is tailored to local circumstances in
the future.
Answer -3a ->

When applied to a person or organization's behaviour in a professional setting, the phrase

"professional ethics" refers to a set of principles that serve as a guide for appropriate
behaviour in that setting. Professional ethics are a collection of guiding principles that
explain how one ought to behave oneself in relation to other people and institutions in a
certain setting. Values and professional ethics are similar in that they are both collections
of guiding principles.
The construction of a code of conduct for a profession always begins with the
establishment of ethical principles as its foundation. Depending on the line of work, there
may be a variety of different ethical standards that must be followed. For instance, the
code of professional ethics that governs individuals who operate in the medical area may
not be applicable to those who practise law or who are in the business of selling real
estate.
These professional ethical principles serve as the foundation for professional codes of
conduct, which are documents that define the behavioural expectations placed on
members of a certain profession. They also aim to lay forth the standards that members of
the profession and the society are obligated to respect for the benefit of everyone.
The goal of establishing standards for the minimum acceptable behaviour in a
professional context is to be the primary function of codes of conduct. In addition to the
supreme law of the country and the personal beliefs held by the members of the
professional community, there are also rules of conduct.
There are, however, certain universal ethical precepts that are relevant to all professions,
such as -
Professional codes of conduct provide benefits to –
➢ the general public, who, as their confidence in the profession's dependability
grows,
➢ clients, since they give a better degree of transparency and clarity about how their
company will be governed
➢ members of the profession, since they provide a supporting framework for
resisting the desire to act improperly and making appropriate decisions in "grey
areas."
➢ the whole profession, since they enhance collegiality and more fair disciplinary
hearings by providing a common view of what constitutes proper practise.
➢ people in the field, since the profession will be viewed as more dependable and
simpler to work with.

Despite the fact that violations of a professional code of conduct typically result in
professional disciplinary action, the primary value of a professional code of conduct is
not as a protocol for disciplining members who do not conform to the standards set by the
organisation.
Instead, its primary function is to act as a guide for the purpose of fostering ethical
decision-making among members of the profession in question.
Answer -3b ->

Transparency - Business transparency is keeping your staff informed, disclosing both

the good and the negative (but avoiding oversharing), and encouraging candid criticism
from your team.
Transparency in the workplace is essential for developing a healthy workplace culture
and enhancing employee engagement and loyalty.
There shouldn't be any unpleasant shocks, worries about uncertainties, or unsure actions
that can damage your leadership image. Transparent leaders make an effort to live up to
their ideals, establish clear standards, and interact with each team member in a productive
manner.
Higher employee satisfaction, better employee retention, and an overall stronger brand
reputation are all influenced by a transparent company culture. Every leader's top priority
should be fostering an environment where management, managers, and employees can
communicate honestly and openly.
Although transparency is crucial, companies shouldn't open the Pandora's box and air all
the grievances from clients, investors, and former workers.
In other words, how companies’ display information has a significant impact on the
results.
Every business and organisation should be transparent. There are several moral and
economic justifications for why it is crucial in business, such as –
➢ Clear environment - we spend an average of 8 hours every day at work. It is
critical to feel at ease and communicate well with coworkers and management.
Difficulties and stress are more easily endured.
➢ Higher quality - an employee who understands precisely how to execute his job
has a better probability of doing it properly. If the employee understands the
scope of the job and the end aim, he has the ability to influence not only the
execution of the present task, but also the work of colleagues or the action plan.
He can accomplish the tasks quicker and better with each succeeding assignment.
➢ Motivation - openness in the workplace may improve integration. Employees are
more eager to participate in initiatives. They aim to perform things as precisely as
possible in order to meet the objectives. They wish to increase their performance.
➢ Involvement - organisations are increasingly educating their staff about the
fundamentals and phases of project development. They make every effort to
incorporate people in all phases of planning and decision-making. This raises
responsibility and dedication, allowing you to keep your finest personnel.

Examples of lack of transparency in business –

➢ It may be difficult for the general public to grasp the political impact of a firm
because of a lack of information about political lobbying. Some businesses may
choose not to reveal the amount of money they spend on political lobbying or the
particular causes they lobby for.
➢ Companies may not disclose sufficient information about their suppliers, the
conditions of their factories, or the environmental impact of their products. This
can make it difficult for customers and investors to understand the impact that the
 company has on society and the environment. Companies may also fail to provide
sufficient information about the environmental impact of their products.
Transparency is an excellent first step towards establishing a healthier and more cohesive
workplace.