Investors Could Prompt Swift Environmental Progress, Notes Kering Boss

PARIS — It’s not just consumers who are clamoring for information on your company’s environmental progress — so, too, are investors, as emphasized by Kering executives on Friday.

Financial markets could play an important role in pushing companies to pursue environmentally responsible policies, said Kering chairman and chief executive officer François-Henri Pinault.

If markets apply the same kind of pressure when it comes to environmental issues and indicators as financial criteria, large international groups of all industries could move extremely fast, predicted Pinault, who spoke at La Tribune’s Forum Zéro Carbon 2020 event in Paris.

“Over the past two years, as a company listed on the stock market, we are doing road shows — presentations to investors around the world — not only on financial criteria but also on criteria specifically linked to the environment and social and governance issues,” he said.

“This is something quite new over the past two years,” added the executive.

Other Kering executives elaborated on the issue, as quoted in a company newsletter distributed Friday, including chief financial officer Jean-Marc Duplaix who said that environmental, social and governance criteria, known under the acronym ESG, have become a key feature of modern capitalism.

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“For investors, ESG has gone from being a ‘nice-to-have’ to a ‘must-have,’” said Duplaix. For a roadshow presentation with investors in November, the executive was joined by chief sustainability officer Marie-Claire Daveu, who noted a growing number of requests from investors on such issues.

“The information they seek, along with their questions, is also becoming more precise,” she said, adding that they come from investors of all sizes, from specialized funds to large financial players.

Linking the interest to risk management, Daveu noted that forest fires in Canada and Australia threw the spotlight on how climate change and biodiversity loss have direct consequences on the activities of some businesses.

“The risks have become a reality,” she said.

“This trend is also being driven by asset managers’ clients — who no longer want to invest in problematic sectors of the economy, both for ethical reasons and pragmatic ones: the risk is too great,” said Duplaix.

The lack of common indicators for measuring the performance of companies on the ESG front is a problem, Duplaix added, predicting that within the next four to five years assessment criteria will become uniform.

Pinault emphasized the importance of coordination in the fashion industry and working toward the same goals.

“Alone we won’t manage, if companies work on their own, we won’t reach critical mass,” said Pinault, who set up the Fashion Pact in 2019 at the request of French President Emmanuel Macron, who wanted companies and the government to work together on environmental issues. Experts estimate that to bring change to an industrial sector, at least 20 percent of the volume of activities has to be involved — signatories of the Fashion Pact account for 35 percent, with over 60 companies, spanning producers and distributors, noted Pinault.

Drafting and publishing a profit and loss account to tally the environmental cost of its activities has been key to establishing Kering as an authority on sustainability issues.

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