La Tribune - ESG data, extra-financial accounting: the essential standardization

ESG, three letters to change the world

The war between Russia and Ukraine, which is reshuffling the energy cards in Europe, will not change anything: the ecological transition remains more than ever the big deal of the century. And to succeed, finance will have to be reoriented to put it at the service of a more sustainable world, more respectful of the climate and people within the framework of a more “responsible” capitalism.

More than 50,000 billion dollars in assets would thus be subject to ESG requirements, which makes it possible to give a label to companies that meet demanding criteria in terms of Environment, Social and Societal Standards and Governance. At the French level, more than 2,000 billion euros are governed according to the rules of SRI, social and responsible investment, the French equivalent of ESG. The recent Pact law, by encouraging companies to develop a raison d'être or even to become “businesses with a mission”, is accelerating these changes.

This upheaval in savings management affects the strategy of companies, whose access to financing and in any case the conditions of financing (credit, equity, etc., listed or not) will increasingly depend on compliance with new ESG standards.

But beyond good intentions, the claim of finance to promote an ecological and social transition faces numerous obstacles, many actors taking advantage of the vagueness and the absence of international standardization of rules.

In this context, Europe has an important challenge that is also an opportunity, that of asserting itself as the leading continent in sustainable finance. The recent agreement on the green taxonomy, which will allow investors to distinguish which energies are more or less compatible with the net zero carbon objective in 2050, the new directives on due diligence and on the extra-financial reporting of fund managers and companies will accelerate changes.

A global battle to find out who will set the standards of extra-financial accounting is currently pitting Europeans against Americans. In the end, nothing less than the definition of the new rules of the game of responsible capitalism.

While some do not hesitate to denounce ESG for a big Bla-Bla-Bla captured by corporate communications, like the Orpea scandal, the challenge is major for companies. CSR has become an integral part of corporate strategy and reputation. Directorates-general are aware that greenwashing, social washing and even purpose washing are sanctioned, in particular by the younger generations, and by their stakeholders: suppliers, employees, customers and... shareholders.

How to make the ESG revolution a reality in the service of a positive transformation for all stakeholders? Will financial capitalism, based on the dictatorship of the short term, become more sensitive to the challenges of the long term and the major challenges of tomorrow's economy? This day of debates led by journalists from La Tribune aims to raise the issues, to bring together actors and decision-makers and to make all voices heard to ensure that these 3 ESG letters contribute to changing the world.