Does sustainable growth change the relationship between the company and the financial ecosystem?

In their European, American and Asian studies, major asset managers, banks and analysts attest to this underlying trend. The influx of events dedicated to sustainable development or environmental, social and governance (ESG) issues organized by listed companies for investors is another important indicator. Between 2021 and 2022, these events could be increased by three or four.

Sustainable development already determines access to financing

Beyond these trends, regulators, particularly American and European, are giving specific direction to texts such as taxonomy that are incorporated into the European Commission’s action plan on sustainable finance. The goal is clear: to gradually direct investments into activities that are recognized as sustainable.

Sustainable growth has therefore become a major element of a company’s dialogue with all of its financial partners, from bankers to insurers, including investors. The way in which the company considers these issues already conditions the price of money. Over time, ignoring this question can further reduce a company’s ability to self -finance.

Worldwide, the observed convergence of normative and regulatory frameworks

At the global level, a fundamental movement has begun, between regulation and standardization. A recent example is the launch of the IFRS Foundation by the International Sustainability Standard Board (ISSB), whose Chairman is Emmanuel Faber, the former head of Danone. The strategic use of ESG information and its growing link to the reading that we have in the company’s performance will lead to a clear professionalization of its production and control.

In a few years, we can expect to reach a milestone in terms of maturity. We will move from a situation of increasing benchmarks, private standards and evaluation methods specific to each evaluator, to the use of one or more normative and regulatory frameworks supported by public authorities or those who manage to control the market. The goal is simple: sustainable development information must reach the level of quality, reliability and comparability of financial data.

There are many implications for business and organizational processes

In companies, these changes will affect management systems and control structures internally and externally. From an anecdotal and little-followed topic, sustainable development has now become a major part of the show, eventually no longer distinguishing between financial and extra-financial. Only one idea of ​​the show will exist, the show world.

These changes are leading more finance departments to address these issues. Some even mention the possibility of changing Principal Financial Officers (CFO) sa Chief Performance Officer (CPO). It is very clear that today, and even more so tomorrow, failing to articulate a strong discourse about the sustainability of the financial ecosystem can be a punishment.

Evaluate business performance against the effects of its sustainability

But watch out, the pag storya and the declarative is insufficient and there is no longer any justification for greenwashing. The overall level of play of all the players has improved significantly. The question then arises as to how to identify a real combination of sustainable strategy development from a timely impact notification. Three important elements are at the heart of the analyzes: the strong and constant personal involvement of the manager; the treatment of the most material subjects of the company; and management related to the organizational plan and the resources allocated.

Strategy, message, tangible proof, continuous reporting: with these changes, the question of the company’s role arises. A simple reading of the raison d’être that more companies offer themselves provides a first element of analysis: the company has become a major actor in society whose activity and performance must be read in light of the effect of its continuation. It is clear that the evolution of exchanges between companies and the financial ecosystem is beginning to show today.

No company wins in a losing world.