10:00 pm, April 10, 2021
The countdown to the revision of the order assessing the environmental and social policies of European companies begins before the Commission on 21 April. Led by France’s Olivia Grogoyer, who will chair the EU Council from January 2022, it wants to influence the debate.
What is behind the amendment of the Order on Non-Financial Information for Companies?
These mandates should standardize the way companies communicate about their social or environmental impact and their governance. Tomorrow, you can compare what companies are doing in terms of value sharing, waste treatment or the use of short circuits. It is a question of giving a new meaning to their “performance” which has long been determined only by the criteria of financial performance. This standard would be an expression of the European economic, social and environmental model. Behind the barbaric word “extra financial performance”, it has a role to play in sovereignty and vision over our civilization. We do not want this standard to be defined by models other than our own.
Our ambition is to reach companies with more than 250 employees, both listed and unlisted
What are the distinctive features of the European standard?
We have general indicators (typically, a greenhouse gas balance), sector indicators (e.g., dependence on fossil fuels for power companies) and criteria for specific characteristics for each member state. Our ambition is to reach companies with more than 250 employees, both listed and unlisted. I am very keen to see this standard reached globally, so it also applies to US or Chinese subsidiaries located in Europe. Europe must be at the forefront in defining the global standards demanded.
Is there already an American standard?
The great strength of the U.S. administration is measuring the importance of the rules of the economic game, whoever the president is. Twenty years ago, we learned this hard when the United States imposed international accounting standards (IFRS) on the planet. At this point, we need to reassure ourselves, as we did in the area of personal data protection. Europe is a continent of social responsibility (social and environmental responsibility) and everything must be done to stay that way.
Is the EU more reasonable than the US on these questions?
I believe Europe has a history, present and future! Today, Morningstar reports that 82% of investment fund stocks labeled as environmentally or socially ethical are held in European countries. This is an area where France promotes Europe: We are the first country to issue green bonds in 2017, and we have been a pioneer in implementing additional financial statements by portfolio managers in their investment policy. ‘Investment. Americans are not mistaken in setting up the rating agency Standard & Poor’s Gravity Center in Paris for extra funding, not in New York.
These issues have become a brand and reputation issue, as well as the credibility of their investors and consumers.
When will the new standard apply in the EU?
If all goes well, it will be in the course of 2024. But by the end of 2022, once the order is accepted we will know if we have every chance of imposing our standards against the United States.
Are French companies ready for that?
Given that these issues have become a matter of brand and reputation, as well as credibility with investors and consumers, they are practical. This is not just another layer of government-imposed obligations. According to her, this is a competitive issue beyond communication issues.
What is the role of green washing in their current practices?
It is difficult to measure, but it is quickly identified. Voluntary charities and associations demand green washing and accountability. Future order indicators will increase stress by standardizing: it is very difficult to say that your attack indicators are acting for the environment if they show the opposite. Better measurement will allow for better identification of tricksters who communicate but don’t actually do. This order will mark the end of CSR in Atargi, where each company promotes its best practices without being able to compete with others.
Savings figures show French enthusiasm for these investments with environmental or social impact
Are French savers buying funds to attack?
With Bruno Le Meyer, we need to synchronize the concept of finance to attack by the end of this year with banks, asset managers and insurance companies that offer products with this label today, but general quality and ambiguity may lose the saver. However, savings figures show a craze among the French for these investments with environmental or social impact. Between 2016 and 2019, the average annual growth rate of outstanding SRI (socially responsible investment) assets reached 130% to 212 billion euros, which is already almost 6% of the financial savings of French households. We are moving towards trust-based savings and need to support it by providing savings and material to savings.
How are you doing with the Agor Hotel team led by former Secretary of State for Economic Transformation Brun Poisson to lead its sustainable development pole?
This proves that this material is moving from the political sphere to the organization. Sustainable development is no longer a support function, but a signal that it infuses all activities from human resources to finance to production. Recruiting high profile people like Brunei Boersen shows that the material is really becoming strategic.