2012 fincom session 5

8/3/2019 2012 FinCom Session 5

1/27

Reporting and financialcommunication - 5Skema - MSc Finance - 2012

p!r convaincre vos pa"enairemessage dentreprise


2/27

Skema 2012 - Reporting & Financial Communication - Session 5

p!r convaincre vos pa"enaire

Agenda

Corporate Social Responsibilityand extra-financial communication

1. History of CSR and SRI

2. CSR Communication : key issues and current evolutions

3. Case study

2


3/27

History of CSR and SRI

3


4/27



Sustainable development

Sustainable development emerges as a concept in the 1970s and 1980s

Principle: to ensure that the conditions of our current economic development

will not affect and endanger the capacity for future generations to satisfy their

own needs

Consequence : how can we evaluate the impact of our economic decisions

and make them sustainable

4


5/27



Sustainable developmenthas led to corporate responsibility

Corporations have a responsibilitytoward their environment andtoward every bodies impacted bytheir economic development

\ their shareholders

\ their employees and relatives,the territories where they live

\ their clients and end-consumers

\ their providers, subcontractors and anyentity involved in the production process

\ their natural environment, considering itwill be passed on to the futuregenerations

Corporations will thus have to definenew criteria :

\ when they have to evaluate theirstrategic choices and measure theirefficiency

\ profitability is not enough

\ but it is still required

The measurement wil define theperformance

But what shall be measured ?

5


6/27



Shareholders activism

From the 1920s some categories ofshareholders have been looking forinvestments that meet their moralprinciples

\ religious corporations, foundations

\ exclusion investment process:no weapons, pornography, tobacco

From the 1970, in the US :shareholders activism

\ Shareholders claim for their rights and teirwill to influence strategic decisions made

by the management

\ Shareholders activists may have somevery diverse motivations

\ Some are very famous for they have thestrategic choices of the managementand organised their replacement in orderto increase the value for shareholders

1980s: financial de-regulation andstrong development of financialmarkets

1990s : corporate governance

\ How to actually control the topmanagement when minority shareholdershave no means ?

\ A set of principles for a good corporategovernance have progressively emerged

200s: shareholders democracy

\ How to guarantee that the managementactually behaves and acts in the longterm interest of all shareholders

6


7/27Skema 2012 - Reporting & Financial Communication - Session 5


Focus : principal-agent problem

Shareholders (the principal) hire a top executive manager (the agent)

They expect him/her to behave and to make decision in order to preserveand develop their own interest

But they actually cannot be sure this is actually the case

\ How to control the agent

\ How to pay the agent in a way that he/she has a incentive in behaving the expected way

7

Asymm

etric

informa

tion

hires

performs




Shared board membership in the CAC 4015 April 2010

8Articlecomplet

http://w

ww.a

lternatives-economiques.fr/

les-cumulards-du-cac-40

_fr

_art_6

33

_49410.h

tml

Graphiqueinteractif

http://w

ww.a

lternatives-economiques.fr/

fic_

bdd/article

_pdf_fichier/1274372604

_cac40

_3.swf
http://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/fic_bdd/article_pdf_fichier/1274372604_cac40_3.swfhttp://www.alternatives-economiques.fr/les-cumulards-du-cac-40_fr_art_633_49410.htmlhttp://www.alternatives-economiques.fr/les-cumulards-du-cac-40_fr_art_633_49410.html




And this led to Socially Responsible Investment

Starting point: Socially responsiblecompanies should be moreprofitable in the long-term

Consequence: asset managershave launched investment vehicles

dedicated to this purpose

Main problem: which selection andperformance criteria are useful tobase investment decisions on ?

Principles for Responsible Investment\ Initiative launched in 2005 by the UN

\ End of 2011 :915 institutions , $30 trillions AUM

6 principles

We will incorporate ESG issues intoinvestment analysis and decision-makingprocesses.

We will be active owners and incorporateESG issues into our ownership policies and

practices. We will seek appropriate disclosure on

ESG issues by the entities in which weinvest.

We will promote acceptance andimplementation of the Principles within theinvestment industry.

We will work together to enhance oureffectiveness in implementing thePrinciples.

6 We will each report on our activities andprogress towards implementing thePrinciples.

9




Video Eurosif Mainstreaming Responsible Investmenthttp://youtu.be/9hWGII8bsq8

Video Eurosif Engagement in practicehttp://youtu.be/mOOeDN5cG6A

10
http://youtu.be/mOOeDN5cG6Ahttp://youtu.be/mOOeDN5cG6Ahttp://youtu.be/9hWGII8bsq8http://youtu.be/9hWGII8bsq8




SRI and mainstream

SRI: still a niche market

\ estimated 3-5% of total AUM

\ expected to reach 10%

3 main fund strategies

\ exclusion\ best-in-class

\ thematical

Principles for Responsible Investment:widely disseminated amongmainstream AM

\ all major AM institutions have signed

\ and accepted to report on these issues

Orientation:no matter how good you are in ESG,you shall report on it

\ companies which do not provide therequired information will be excluded fromthe scope of investment

11

0

1500

3000

4500

6000

2002 (EU 8) 2005 (EU 9) 2009 (EU 14)

Growth of SRI European Markets 2001-2009

Billion


12/27

CSR Communication:

key issues and current evolution

12




First regulations

In France, Law NRE in 2002 :requirement to disclose information on social en environmental data in theManagement report

But the information content is not specified

\ Initially a confused period when companies filled information with little coherence

\ The disclosure requirement induces a risk:what is the legal liability for the management and for the company?

\ how does the company adapt to new environmental regulations ?

\ Communication induces public exposure: environmental activists compare corporatecommunication with the actual behaviour of companies: NGOs Unions

European Regulation :Prospectus Directive in 2005

\ information on social & environmental impact

\ information on risks, actual or potential litigation, specifically environmental litigation

13




Fast growth of SRI funds

Fast growth of SRI funds

\ 70 billions end-2010 (20 billions in 2007)

\ Several AM strategies are emerging

global SRI funds

thematic funds: renewable energies,

cleantech... Integrating ESG principles in their selection

process

\ Those funds need tools to select andbenchmark their investments

Specialised rating agencies(ex. Vigeo in 2002)

\ agencies provide raings to their clientsinvestors

\ ey can also directly rate companies on avoluntary basis

\ each rating agency has their own criteriaand methods

Global SRI index

\ Dow Jones Sustainability Index World

\ ASPI Eurozone (Advanced Sustainability

Index)

\ FTSE4Good Index

\ Euronext FAS IAS : actionnariat salari

14

0%

10%

20%

30%

2000 2011 2020

As a % of otal AuM

Fonds ISR Intgration ESG




International initiatives

Global Compact launched by theUN

\ companies join the program on avoluntary basis and comply with 10fundamental principles

Global Reporting Initiative :\ an international working group dedicated

to set up a corpus of standards andindicators in order to evaluate the ESGperformance

Interactions with the communication

on internal control procedures andrisk management

Some major companies activelysupport those initiatives

\ they develop a strategic communicationon CSR

\ they deploy dedicatedEnvironmental Information systems and

Environmental management systems

\ They disclose a detailed information ontheir actions, achievements and possibleimprovements

\ They tend to mutualise and standardisebest practisesex. mass retail and social audits

15




A brand new field of communication

The need to comply with communication requirements has been the first stateof awareness about sustainable development for many companies

IR and financial communication teams may be decisive in companies settingup of a sustainable development policy

Which perfectly illustrates how financial markets can represent a positiveconstraint

16




the picture is a varied one

17

Strategic line

Element of

performanceassessment

Communicationand image

Compliant with legalrequirements




Communication requirements

Communication material

\ As a minimum : on section in the Management report and the Reference Document

\ As a maximum : dedicated Sustainable Development Report

may reach one hundred pages

may come with an abstract

some reports are certified, totally or partially, by external auditors

Communication schedule: yearly basis

\ Sustainable development indicators are not disclosed on a quarterly basis

\ In many cases, these is no real analysis of those indicators,sometimes because companies lack of historical basis for comparison

\ No indication that ESG performance may be used as a measurement for internalperformance and incentive

18


19/27



19

Environmental Indicators

Consumption of natural resources : water, oil, electricity, % of renewableenergy

Emission of contaminating products : greenhouse gases, waste (toxic,common), paper, plastics

Actions for decreasing the environmental footprint : energy savings, wastereovery, recycling, production of renewable energy, offset mechanism forCO2

Indirect Impacts : impact of the products and services offered

Education policies : clients, employees, suppliers, local communities

Biodiversity conservation.


20/27



20

Social indicators

Headcount, age structure, hierarchical structure

Promotion of diversity : parity in total and at management level, disabled,minorities

Compensation policy: wage scale, promotion, social benefits

Employment : recruitment, turnover, training, relationship with localcommunities, with education

Health & safety : Accidents at work,risk prevention

Welfare : psychosocial risks, social dialogue

Ethics : Ethics Charter, Purchasing policy, fight against corruption


21/27



Certification of ESg reporting

21


22/27



Environment and social Rating

22


23/27



The current development of SRI

Video Eurosif 2010 European Studyhttp://www.eurosif.org/media/videos/item/320-2010-european-sri-study-video

Video Eurosif Study on HNWI & Sustainable Investmenthttp://youtu.be/KET58-kAyUo

23
http://youtu.be/KET58-kAyUohttp://youtu.be/KET58-kAyUohttp://www.eurosif.org/media/videos/item/320-2010-european-sri-study-videohttp://www.eurosif.org/media/videos/item/320-2010-european-sri-study-video


24/27

Case study

24


25/27



A company from emerging markets : Fibria

25
http://www.fibria.com.br/en/http://www.fibria.com.br/en/


26/27



A worldwide company: LOreal

26


27/27


Major changes still to come

Grenelle de lEnvironnement : A newManagement report on ESG principles isrequired

\ Inspired from the Report in CorporateGovernance and Internal control

\ Representing a commitment toward

shareholders\ And the guarantee that those matters will be

included is the corporate strategy at thehighest level

Certification of environmental andsocial reporting

\ Standardisation of reporting practises

\ Adaptation of IT systems

\ Difficulties in defining the referential and thebodies in charge of certification

Interaction with other trends

\ CO2 certificate market: what is the financialimpact for companies?

\ Increasing tensions on the price of naturalressources

\ labour shortage in some industries

\ green business : investment allocation

European Directive being prepared

One key question remains:how to integrate ESG in the valuation ?

2012 fincom session 5

Documents