ESG Simulation

Teach ESG trade-offs through a live stakeholder negotiation

Students apply ESG principles to a live stakeholder discussion, connecting environmental, social and governance choices with financial and operational outcomes.

2 - 4-hour team-based simulation
Analysis and structuring
In-class, online or hybrid delivery

One company. Four stakeholders. One ESG deal.

The ESG Simulation is a two to four hour, team-based business simulation in which students represent Management, Investor, Regulator and Union stakeholders responding to a major sustainability challenge. Students analyse role-specific evidence, model the financial and operational impact of different choices, negotiate environmental, workforce and funding terms, and agree an ESG Policy Statement while keeping the company financially viable.

Four perspectives

Different priorities and supporting evidence.

Connected decisions

Funding, production, pollution, wages and ESG expenditure interact.

Shared approval

The final decision requires all four stakeholder teams.

At a glance

Duration

2 - 4 hours

Run the simulation as an intensive activity or divide it across several teaching sessions.

Format

Role-based ESG negotiation

Students prepare within stakeholder teams before negotiating one shared agreement.

Level

UG, PG and MBA

Vary the expected depth of analysis and reflection for the course level.

Professor tools

Integrated Admin Panel

Control the timeline, adjust timings, manage participants, send alerts and monitor decisions.

Prerequisites

Beginner accessible

No specialist prerequisite knowledge is required.

Delivery

Classroom, online or hybrid

The web-based simulation supports several confirmed delivery formats.

Optional assessment

Applied team evidence

Run it ungraded or use decisions, final terms and comparative results as supporting evidence.

Course fit

ESG and responsible business

Suitable for ESG, sustainability, responsible business, governance and stakeholder-management teaching.

How ESG trade-offs shape business decisions

Environmental, social and governance priorities are negotiated by Management, Investor, Regulator and Union teams. The central challenge is balancing stakeholder objectives with financial viability, including the requirement to keep EBITDA above $20 million.

1. Intro | 9 minutes:

Students begin with a short introductory video that presents the situation, explains the purpose of the simulation and builds excitement for the activity ahead. They are introduced to the company’s ESG challenge, the four stakeholder groups and the need to balance responsible business decisions with financial viability.

Students then review their assigned role, mission, objectives and action points so they understand what their team is expected to achieve. The professor confirms that everyone can access the platform, resolves any initial questions and starts the timed simulation.

2. Analysis | 60 minutes:

During Analysis, students work within their stakeholder teams as Management, Investor, Regulator or Union. Each student first studies the role-specific information available to them, including the case brief, reports, letters, financial data, Data Room materials and other supporting evidence. They must understand their mission, priorities and action points before contributing to the team strategy.

The team then comes together to compare its findings, identify its strongest arguments and agree on an opening negotiating position. Students use the Modelling area to test possible terms and examine how decisions relating to production, ESG expenditure, investment, compensation, wages and employment may affect the company’s financial performance. Every student should contribute to the analysis so the team enters the negotiation with clear evidence, realistic proposals and a strong understanding of what it must protect. The professor may monitor progress and provide neutral coaching without directing teams towards a particular answer.

3. Structuring | 60 minutes:

During Structuring, the Management, Investor, Regulator and Union teams come together to negotiate the final ESG agreement. Each team presents its position, uses evidence from the case and Data Room, challenges the proposals made by other stakeholders and attempts to achieve the objectives set for its role.

The teams negotiate connected terms covering the filter system, production level, ESG budget, additional investment, management compensation, worker wages, workforce numbers and the shared ESG Policy Statement. Each stakeholder submits the terms within its area of responsibility, while the policy statement is developed collaboratively.

The challenge is not simply to maximise one team’s outcome. The four stakeholders must find a package that responds meaningfully to the ESG issues while allowing the company to continue operating. Students must therefore consider the financial consequences of every compromise and ensure that the final agreement keeps EBITDA above $20 million. The agreement is finalised only when all four teams approve the complete package. When a group cannot reach an agreement, the Blaming Poll allows students to identify which stakeholders they believe prevented the deal from being completed.

4. Reflection | No time limit:

During Reflection, students review the final agreement, the terms submitted by each stakeholder and the resulting financial, environmental and workforce outcomes. They consider whether their team achieved its role-specific objectives, what compromises it accepted and whether the complete package represents a credible and sustainable decision for the company.

Students also compare their performance with other teams that represented the same stakeholder role, using the platform’s performance results and median reference points. This allows Management teams to compare themselves with other Management teams, Investor with Investor, Regulator with Regulator and Union with Union. Where a negotiation group did not reach an agreement, students can also review the Blaming Poll Results and discuss why the negotiation failed. The professor can use this stage to explore alternative agreements, decision quality, stakeholder trade-offs and the difference between performing well for one role and producing a strong collective outcome.

Why professors use it

Help students apply familiar ESG concepts to a realistic stakeholder negotiation. It gives professors a structured way to teach trade-offs, financial viability, collaborative decision-making and evidence-based reflection.

Apply ESG concepts in context

Students connect environmental regulation, workforce outcomes and governance commitments with production, funding, EBITDA and investor returns.

Make stakeholder trade-offs visible

Four stakeholder teams defend different objectives, allowing students to experience conflict, compromise and collective decision-making.

Debrief from real team evidence

Submitted terms, agreement outcomes and same-role comparisons give you concrete evidence for a focused class discussion.

What the experience looks like

The Professor Admin Panel brings the timeline, session controls, students management and teaching guidance into one place. The Student Interface leads students from analysis to structuring and finally to the performance reflection.

Control the simulation timeline

Set the duration of each stage, start the activity and manage progression from one timeline.

Access the professor guidance

Open the Setup & Facilitation guide and Teaching Notes directly from the Admin Panel. The Gameflow Diagram is available in the same Admin Guide area.

Run and manage the session

Play starts automatic progression. Pause holds the timer in the current stage. Stop locks student screens.

Case materials students work with

Students receive a common case context and tailored role information. The materials combine quantitative evidence, such as financial and operating data, with qualitative stakeholder arguments and policy information. Teams identify the evidence relevant to their role, test its implications and use it to support a credible negotiating position.

Compare the filter alternatives

Review how G1, G2 and G3 affect emissions, production and the terms available to the company.

Use financial benchmarks

Compare Innocent Corp with peer companies when assessing Management’s proposed terms.

9 mins

Student Intro Video

Students watch this short introduction to understand the ESG challenge, the stakeholder roles, objectives and key tasks before the simulation begins.

Use the simulation as applied evidence, not as an automatic academic grade.

Assessment is optional. Professors may run the ESG Simulation as an ungraded applied activity focused on analysis, modelling, negotiation and reflection. Platform data can support academic judgement, but simulation results should not automatically replace a professor’s rubric, observation or review of the underlying decisions.

What professors can assess

• Role-specific decision quality
• Financial and operational consistency

How to interpret the results

• Compare teams that represented the same stakeholder
• Use platform data as supporting evidence

What professors can assess:

Role-specific decision quality: Assess how well each team understood and pursued the objectives attached to its role. Management should consider management compensation, EPS and the company’s financial viability. Investor teams should weigh additional investment, ROI and the environmental quality of the production approach. Regulator teams should focus on filter choice and pollution reduction. Union teams should protect hourly wages and the number of production workers. Strong performance means using the case evidence and modelling outputs to defend these priorities while recognising the constraints faced by the other stakeholders.
Financial and operational consistency: Review whether the final terms work together as one realistic operating plan. The agreement may include production levels, the ESG budget, additional investor funding, management compensation, worker wages, workforce numbers and the selected filter system. These decisions affect revenue, operating costs, EPS, ROI and EBITDA. Professors should examine whether the package keeps Innocent Corp above its stated minimum EBITDA requirement of $20 million while still funding the agreed environmental and workforce commitments.
Optional individual assessment report: Students may be asked to submit a short written report outside the platform once they have reviewed and reflected on their outcomes. This is not automatically captured or graded by the simulation.

How to interpret the results:

Compare teams that represented the same stakeholder: Interpret each team’s performance against other teams that had the same role and objectives. Management teams should be compared with other Management teams, Investor with Investor, Regulator with Regulator and Union with Union. The Reflection interface supports this by showing role-specific performance charts and median reference lines. This comparison is more meaningful than ranking all four roles together because each stakeholder is measured against different priorities.
Use platform data as supporting evidence: The platform records the decisions entered by teams, the final negotiated terms, approval or failure-to-agree outcomes, Structuring results, Blaming Poll Results where relevant and same-role performance comparisons. This provides useful evidence for debriefing and optional assessment. However, the platform does not automatically measure individual contribution, quality of spoken arguments, teamwork or written reasoning. Those areas should be assessed through professor observation or optional follow-up work such as an individual reflection, presentation or written defence.

Set up the session, then control the pace.

The simulation can progress automatically after "Play" is selected or be advanced manually through the timeline. Coaching is optional, allowing professors to intervene only when clarification or reflection would add value.

Step 1

Organise the stakeholder teams

Create negotiation groups containing Management, Investor, Regulator and Union teams. Confirm that each participant can access the correct role.

Step 2

Configure the timings

Set the stage durations and adapt the activity for one workshop or several teaching sessions.

Step 3

Start and manage the simulation

Use Play to begin automatic progression. Pause for discussion, use Stop to lock student screens without resetting data, and select Play again to resume.

Step 4

Monitor progress and prepare the debrief

Review team inputs and decision tables, coach selectively and use the final outcomes to prepare Reflection.

Professor Resources

Everything needed to prepare, run and debrief the ESG Simulation is organised within the resources below.

ESG principles and frameworks
Environmental sustainability
Emissions regulation and compliance
Governance and ethical practice
ESG integration in investment decisions
ESG reporting and transparency
Stakeholder engagement
ESG financing and investor return
Financial-statement effects of ESG initiatives
Production, pollution and capacity trade-offs
Wages, employment and workforce interests
Multi-party negotiation and compromise
ESG Policy Statements
Peer comparison and reflective debriefing

Creators of the ESG Simulation

These industry professionals were involved in the inception, creation, development, testing and optimisation of the simulation.

Former Practice Specialist in McKinsey’s Corporate Finance team in Germany and Finance professor at Aberdeen University.

Gerhard Kling

Over 15 years of experience across advisory, PE, VC, family offices, and entrepreneurship. Covered M&A transactions from multiple angles and holds a PhD in Corporate Finance.

Olaf Rottke

Investment banking, capital markets, PE, and corporate ratings experience at Morgan Stanley, S&P, and HPS Investment Partners. Holds a PhD in Quantitative Finance.

Gerhard Wörtche

Structured finance, credit derivatives, and NPL expertise. Portfolio Director at a private equity impact fund and active VC investor. Holds CFA and FRM qualifications.

Raushan Kretschmar

Senior investment banker at Morgan Stanley with experience in M&A and TMT coverage across New York and San Francisco. Studied business at Kellogg.

Bharat Venugopal

FAQs

Students negotiate operational and financial choices including production filters, production levels, additional investment, the ESG budget, management compensation, wages and workforce size. These decisions affect costs, operating performance, pollution and outputs such as EBITDA, EPS and ROI. The simulation therefore makes ESG strategy visible in the income statement and operating model rather than treating it as a separate narrative report. Professors can ask students to identify both the immediate financial effect and the stakeholder consequence of each proposed action.

A case study normally asks students to evaluate an ESG issue and recommend a course of action. The simulation requires four stakeholder roles to model, negotiate and approve a complete operating package while observing its effects on financial and environmental outcomes. Students must therefore live with trade-offs and secure agreement rather than describe an ideal policy from one perspective. Professors receive comparable decisions and negotiation evidence for a focused debrief.

The minimum EBITDA requirement prevents teams from solving the stakeholder problem by approving every desirable expenditure without considering affordability. Management, Investors, Regulators and the Union must find a package that improves or protects ESG outcomes while preserving a financially viable business. This creates a realistic constraint: the debate is not whether environmental and social objectives matter, but how they can be funded and sequenced without making the agreed operating plan unsustainable.

The platform records team inputs, modelled financial and operating outcomes, final negotiated terms, the ESG Policy Statement, approval or failure-to-agree outcomes, Structuring results and same-role performance comparisons. Where a group does not reach agreement, Blaming Poll Results may also support the debrief. The platform does not automatically measure individual contribution, spoken argument quality or written reasoning.

Failure to reach unanimous approval exposes where stakeholder priorities or proposed terms became incompatible. The blame poll can reveal how participants perceived the blockage, but it should not be treated as an objective performance score. Professors can compare those perceptions with the actual negotiation record, identify which decisions prevented agreement and ask whether the parties tested credible alternatives. This turns an unsuccessful negotiation into evidence about communication, coalition-building and the management of competing ESG and financial objectives.