KNOWLEDGE REPRESENTA TION OF RISK AND OPPORTUNITIES ARISIN G FROM ENVIRONMENTAL , SOCIAL AND GOVERNANC E ISSUES: A BAYESIAN NETWORK APPROACH.
Renaud MacGilchrist, Irena Descubes · 2013
The very nature of Corporate Social Responsibility (CSR) has brought about the need for common tools which can be used to represent, test and synthesize knowledge and beliefs from diverse and amorphous origins. This paper investigates the use of Bayesian networks for knowledge representation of Risk and Op portunities Arising from Environmental, Social and Governance issues. It is based on an example that uses the data from MSCI, which provides research, ratings and analysis of corporate management of environmental and social risk factors on over 5,000 globa l companies. Bayesian networks are often used for eliciting, confronting and synthesizing both expert and layman knowledge. They enable us to update our beliefs and expectations regarding complex systems in a rigorous way given new or conjectured evidence and they provide a practical decision support system for elaborating strategies and policy making in the area of the corporate social responsibility.