DR. KALLIWODA SUSTAINABILITY RATING

Why should we care about sustainable development?

-The resources and biocapacity of our planet are limited. Currently, humanity consumes too many resources, compromising our long-term future. The main causes are resource-intensive consumption patterns and environmentally harmful production methods.

-Most economic activities today involve raw materials, energy use, and waste & emissions, but environmental impacts become visible only after a delay, and the negative effects aren't confined to the place where they originate.

Socio-Ecological Dilemmas

-The environment serves as habitat, location for economic activities, resource source, and absorption medium for pollutants.

-While direct costs of inputs can be calculated immediately, environmental damages cause external societal costs. These costs aren't reflected in market prices, shifting uncompensated consequences onto society and future generations.

-Short-term economic goals undervalue finite resources, leading to their unsustainable exploitation

Factors leading to unsustainable behavior on both production and consumption sides, resulting in partial market failure:

-Externalization of environmental costs: social and ecological costs are imposed on third parties outside market relationships, leading to market prices below actual economic costs. These costs must be borne by society and future generations.

-Natural resources (clean water, air) are treated as public goods, despite having limited availability and usage rivalries, causing over-demand and misallocations.

-Individual actors gain short-term benefits from free-riding, using resources without contributing to their collective financing.

-Natural resources face the common property issue: wastage occurs in public use, while private ownership encourages efficient usage.

-Discounting future damages: Costs and risks occurring in the future are underestimated due to impatience, short-sightedness, diminishing marginal utility of income, and uncertainty about the future.

-Effective environmental and sustainability management is often seen as merely a cost factor rather than an investment for the future.

-Adopting ecological/social performance principles can increase competitiveness and societal wealth (Shared-Value Approach).

Our team is highly professional in sustainability research. We ethically follow sustainability, DCFA, CEFA, and CFA guidelines in all activities. We generate:

• Sustainability ratings for investment funds
• Sustainability ratings for individual companies
• Sustainability consulting
Example: Sustainability rating for a fund: Asset Management Pension Fund MPP

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Companies already rated with our DR.KALLIWODA SUSTAINABILITY RATING approach