Environment and businesses, down with discourse

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There is no regulation of the financial criteria for sustainable development, which often reflects cultural differences: minimisation of social issues in Asian countries, demonisation of tobacco in the United States, environmental concerns in Scandinavian countries.

There is no regulation of the financial criteria for sustainable development, which often reflects cultural differences: minimisation of social issues in Asian countries, demonisation of tobacco in the United States, environmental concerns in Scandinavian countries.

That shows, through, in the ratings agencies. Their credibility is already contested concerning their private subsidisation, and certain ones, such as Attac, question the legitimacy of a score obtained by an agency like Vigéo, held by Carrefour, Axa, BNP Parisbas. The fact that, in the automobile industry, the former French agency Arese over-scored Renault, the German agency BMW and the American agency Ford also cast doubt on the harmonisation of methods the ratings agencies use. Other examples include Danone, over-scored by the French agency and under-scored by the Swiss agency Ethos for its packaging production, or Toyota, elected by Innovest, placed in the Top 3 of the 2005 class of model businesses by Corporate Knights Inc. (behind Alcoa and BP) and semi-rejected by the German agency Oekom. This indicates a certain malaise. The emphasis placed on social considerations could penalise McDonald’s, who would be positioned at the top on the basis of environmental criteria.

SRI funds, marketed by banks without clearly defined rules still seem to sidestep criticism because of their age and the number of investors.

Paul Hawken, author of « Natural Capitalism », conducted a study of six hundred SRI funds, which indicated that even contested businesses like Exxon, Wal-mart or Halliburton are rated highly in some rankings and the difference between traditional funds is often barely perceptible. Even the funds of agencies like Sierra Club or from Pax World, which can be considered above suspicion, invest in businesses that don’t release social or environmental reports.

In the end, ethical funds appear to be more of a new marketing niche to offer investment to potential shareholders than rigorous, integrated measures. Additional ethics in a performance-based world may be just an illusion when we consider their attractiveness.

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Current shareholders of ethical funds are not characterised by dynamism or a particular willingness to exchange constructive dialogue with the businesses in which they have invested. This is also observed during general assemblies.

Mediation of some contested general assemblies hardly conceals the minimal portion dedicated to the questions of sustainable development during these annual meetings. There are some real successes, like the demand from shareholders that General Electric clean their toxic chemicals from a river, that McDonald’s more fully investigate the question of sexual discrimination and that Home Depot stop selling three types of wood purchased for construction, but these examples remain in the minority. The ONG rarely participates and, when shareholders formally question directors, it’s most often out of the hope to avoid risk rather than a desire to act ethically. When the reaction of other shareholders during a general assembly questioning is observed closely, these asides exasperate the majority of small shareholders and help encourage them not to change their behavior.

Environnement et entreprises, en finir avec les discours

Dominique BOURG, Alain GRANDJEAN, Thierry LIBAERT

Pearson Education France (Collection Village Mondial), Paris 2006.

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