“If you want to make God laugh, tell him about your plans”, says the proverb. How many fund managers have seen their plans thwarted by Covid-19, the war in Ukraine or the return of inflation; how can we take into account, in asset allocations, the Trump danger, the tensions around Taiwan, the rise of the extreme right in Europe? These multiple crises are some unpredictable, and most escape all legislation, sometimes defying reason. We are forced to confront them like tectonic thrusts.
But other facts – global warming, the collapse of biodiversity, the scarcity of natural resources – are known: on these States, businesses, consumers and finance can act. These facts force us to transform our lifestyles: to become more sober and more united. We have no choice, we are embarked, as the philosopher Emmanuel Mounier (1905-1950) said in his time.
At the root of these facts, there is obviously the question of the quest for profit, essential to investments for the transformation of the economy and defined by international accounting standards. With a few exceptions, companies labeled B Corp, i.e. most large listed companies, are not mission-driven companies. They are based on the corporate purpose of the company, which is profit for shareholders. The fiduciary responsibility of shareholder representatives is the defense of their financial interests. This is orthodoxy.
Profit is only a means
But we clearly see that there is a disconnect between this orthodoxy and global warming. A profit that does not take these constraints into account is a false profit, because it subtracts money from the social body and from nature, without worrying about their sustainability.
A “responsible” fiduciary responsibility therefore has two sides: that of the corporate purpose of companies (mission-based companies) and that of investors seeking a return combining sustainability criteria.
The European SFDR (Sustainable Finance Disclosure Regulation) regulation takes these constraints into account by classifying investments intended for individuals and professionals according to the degree of implementation of means making it possible to evaluate the environmental, social and governance policies of companies. If the implementation of the means is satisfactory, the shareholder’s profit should not be a false profit.
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