PRI in Person 2019, Paris: France pushing strongly for EU Action Plan and Green New Deal implementation

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French President, Emmanuel Macron, opened up the PRI in Person conference in Paris today (September 10) with an appeal by video to private capital to join and ‘donate for the Amazon’ as part of the efforts of countries including France to push an Alliance for the Amazon to combat rainforest fires that will be presented to the next UN General Assembly.
President Macron said France, Jamaica and Qatar would be reporting on implementation progress of the One Planet Climate Action Plan at the Climate Week in New York later this month.
Macron was followed by Bruno Le Maire, France’s Minister of the Economy and Finance, who told the audience it was time to “end the statements on sustainability, now we must act.” Le Maire said bold public policy responses were needed to transform the current economic model and “create a new capitalism for the 21st century based on the notion of social responsibility.” He outlined France’s response, including new legislation on social and environmental reporting and responsibility for all companies, involving a change of the country’s Napoleonic code. But he added: “Without a strong signal from finance, no significant change will be possible. We need to reduce the support of harmful economic activities that harm and a redirection towards positive finance. Responsible investment is necessary to support socially inclusive businesses and social cohesion. Concrete policy and tools to encourage responsible finance will remain at the core of my action as Minister of Finance.” He noted that in line with France’s national low carbon strategy, in July French financial institutions agreed to completely shift out of coal by 2020.
In addition, he said that France’s Article 173 reporting framework would be enhanced by the year-end as part of an energy transition bill currently in front of Parliament. On financial supervision, he added: “We won’t be satisfied with statements or commitments by financial actors, only radical changes under supervision.
As RI has reported French sustainability oversight has been toughening under the AMF securities regulator, including a new Climate and Sustainable Finance Commission, to come into operation this month.Le Maire said France was also pushing strongly to gather full support from EU Member States for the EU Action Plan on Sustainable Finance and the European Green New Deal proposed by Ursula Von der Leyen, the new President-elect of the European Commission, that aims to make the continent carbon neutral by 2050. Lastly, he said France was working hard to create EU green bond standards and was pushing for a European environmental and social reporting framework for large european companies.
In a keynote address, Jean Raby, CEO of Natixis Investment Managers, said the finance industry was making little progress on gender inequality, which was unacceptable: “We must shift the lens on this.” On corporate governance, he said the system still suffers from serious shortcomings: “AGMs should be the forum for debate on long-term corporate strategy, but there’s little of this.” Asking rhetorically why there had not been enough progress on responsible investment, he said it was perhaps because the focus had been on ESG as a risk management tool, not on positive investment shifts: “I fear ESG has become an end in itself, not a means to an end. If you don’t know where you are going, you will end up somewhere else. I welcome Bruno Le Maire’s appeal for collaboration and co-operation between policy makers and finance to fight against short-termism. The depth of commitment is positive, but the time has come for industry to better channel its efforts.”
In a conversation with Eva Halvarsson, CEO of AP2, the Swedish pensions buffer fund, Cécile Cabanis, CFO at Danone, picked up the short-term/long-term theme, noting that the company’s shift to become a BCorp, balancing profit and purpose, reflected the need for a shift of mindset away from a yearly P&L perspective to one that looks at dealing with the company’s externalities as ways to lower risk, stir innovation and contribute to the UN Sustainable Development Goals and protect the business over time.
“Banks have already told us that we got a small discount on interest rates as a result of shifting to a BCorp, so it shows that this is moving. Investors should also be ready to think about this in their investment commitments.” Cabanis also said that the number of sustainability indexes and reporting repositories “is a mess, they’re all measured differently and there is lot of data that could be meaningful if we really agree how to measure externalities. At the moment though it’s a waste of resources, and it’s time we don’t want to waste. We need to agree on the standards that make sense and then see these enter into financial valuation models.”