Nicolas Mottis

What is the correlation between financial performance and CSR performance?

Numerous articles and studies have been published on the subject, notably in the United States because of the law which obliges asset managers to maximize first and foremost the creation of shareholder value, the CSR performance then being unable to get to his detriment. While some works conclude a positive correlation, others do not settle and many conclude a negative correlation consistent with the conventional financial vision that considered reducing an investment universe based on CSR criteria would inevitably degrade the performance of the portfolio. .Today, the academic community largely agrees on the conclusion that CSR performance can be achieved without necessarily degrading financial performance. Reconciling CSR performance and shareholder satisfaction is therefore possible.

What are the topics of interest in academic research in the field of CSR?

Today, we can cite the following three topics:

  • Financial risks related to climate change. They have become essential for portfolio managers and impacted traders. The financiers already having a lot of quantitative data, this generates an increased interest from them as evidenced for example the approach of the TCFD.
  • Impact measurement in SRI. Well beyond the CSR ratings of rating agencies, the notion of impact pushes actors to deepen their value chains, to work on the causal model of their performance and to better understand and measure their real extra-financial impacts. In the case of a company such as ENGIE, for example, it is possible to identify, measure and demonstrate the environmental impact of the energy savings generated by its customers through the Group's offerings and services.
  • The convergence of financial and extra-financial approaches symbolized by the integrated report. ENGIE has initiated this type of approach for a long time.

How do you see the evolution of SRI in France?

SR performance is attracting more and more funds and asset classes. According to the latest survey FIR-AFG place, it is estimated today to nearly 1,000 billion euros the volume of financial assets in France that today account for CSR criteria more or less strong, including 300 billion in strict SRI management, representing more than 10% of assets under management in France, which is significant. The French PACTE law will further reinforce this trend by requiring products such as life insurance contracts to offer SRI funds.

We are also seeing the development of labels such as the ISR label, created a little over 2 years ago with today more than 200 labeled funds and 50 billion euros of assets under management, and which offers additional guarantees to savers. The idea is to provide quality signals that enable savers to identify the real impacts of their savings and guide them. The increasing sensitivity of savers to this theme is a very good thing to congratulate. It also signals a heightened demand from those same savers, who want to be certain that their funds are going to the right place, which companies will need to be able to demonstrate.