“The alignment of its entire ecosystem is the major challenge for the company of the 21st century”

Tribune. By supporting the widely shared imperative of decarbonization, in particular through a more responsible use of resources, ecological transition increasingly dictates the strategy of groups. But, if it thus modifies the social utility of the company, does it strengthen its economic and commercial performance to the same degree? The question is especially salient in a world trade turned upside down by China and the mercantilist activism of its state-party, to which American pressure will not change anything.

How can business leaders reconcile social and environmental responsibility (CSR), or what are now called ESG criteria – environmental, social and good governance -, and certain cardinal principles?

The raison d’être of the company is in fact to be profitable by producing goods or services for its customers, by providing stable and fairly remunerated jobs, by also remunerating its shareholders and investors, by treating its suppliers well and even, more recently, by bringing well-being. Unless it becomes an absolute imperative prevailing over any other consideration – which is perhaps desirable – the ecological transition must take this into account.

Funding criteria

In fact, and while an overwhelming majority of opinion considers that the company must be the engine of the ecological transition, it is now more and more risky for their leaders, whatever their size and their sector, to free themselves from a plan that puts societal and environmental issues at the heart of their strategy.

Reconcile environmental requirements, return per share and competitiveness under the eye of the markets, while contributing to society’s expectations in terms of purchasing power and employment and, increasingly, of a kind of serenity, doesn’t it come back to squaring the circle? The social utility of the company seems torn between these sometimes contradictory objectives, while the pressure is mounting on the boards of directors.

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Especially since their funders are now entering the scene by taking on the climate challenge, like Larry Fink, president of the emblematic BlackRock fund, who called in January 2020 for a decisive turn in finance in favor of criteria decarbonisation in investment strategies. Or Christine Lagarde, paving the way for the European Central Bank to play a stimulating role in the same direction, without forgetting “impact” investors.

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