Impact, mission, taxonomy, SFDR (Sustainable Financial Disclosure Statement)… After CSR and ESG, new words enter the lexicon of business leaders. Needless to say, we have changed the paradigm. Our societies have reached such a level of urgency in the face of global warming and widening social and territorial inequalities that traditional approaches based on identifying and reducing negative externalities, although necessary, are no longer enough. The challenge now facing entrepreneurs and their shareholders is how to make sustainability the core of a company’s operations so that it becomes a real driver of environmental and social progress?
Triple disruption at work
All vectors of change are on the move: first, regulatory changes applicable to companies or investment funds change the terms of business and cost, or even access to finance. Then the expectations of employees who “vote with their feet.” Finally, the voice of customers who face the same demands and may suddenly change their buying behavior.
However, the end consumer, in fact, is always a citizen-consumer. Even BtoB companies are now in BtoBtoC and must meet these societal expectations in order to sustain their operations. The good news is that impact and sustainability is primarily a theme of innovation at the heart of the company. And it’s exciting!
Innovation as a driver of change
Using an impact approach is a positive initiative that responds to the expectations of employees, customers and society. And the answers come through innovation. Innovation in products, services, processes, distribution… there are many forms of continuing to work in a profession, but in different ways.
As with any innovation process, building a large portfolio of ideas and projects is key. Employees, customers, citizens are full of them. Each proposal will inevitably pass through the sieve of medium-term viability and operational action plan for prioritization, implementation and funding. The company may have to shelve the hydrogen technology project for economic reasons and opt for the biofuel project, which is more affordable at first. Dynamic portfolio management is important.
Conditions for Success: Business Benefit, Longevity, and Leadership
Both SMEs and ETI are not in the market to make hits. Often these are family or heritage issues that are planned for the long term. So it’s not about reinventing another company or coming up with a new slogan, but about innovating based on who we are and our strengths. And, ultimately, return to corporate utility.
Because the very principle of entrepreneurship is to satisfy unmet needs. Only by returning this utility to the basis of the strategy and integrating new social requirements will innovation reach its public. Entrepreneur leadership is essential to clarifying this vision.
Time is an important element. Some customers are not yet ready to pay more. As with any innovation process, you must be prepared, stay ahead of the curve, manage your time-to-market, and be flexible to position yourself as demand changes. There is no doubt that on these social issues, acceleration – either voluntarily or under pressure from the stock market or NGOs – is already happening among their BtoB clients. Then the long run is the payback cost.
“Greenwashing”, “impact-washing”… How to separate the wheat from the chaff? Only time will give an answer. Of course, there can be “quick wins” and it is important to implement them in order to motivate teams. But deep innovation and transformation initiatives are large investments and will necessarily take time.
Positive financing should support all sectors
European legislation has created a reading grid to better define the profile of funds in relation to the impact approach. According to the Sustainable Financial Disclosure Regulation (SFDR), we find Article 6, Article 8 and Article 9 funds. The first do what they have always done. Article 9 funds support activities that directly contribute to a sustainable economy (renewable energy, health, education) in the light of a green and social taxonomy, allowing them to be directed to these sectors.
Those of the Article 8 type continue to invest in accordance with their own investment universe and are committed to reducing or eliminating the negative impacts of funded activities in accordance with environmental and social characteristics. Therefore, they play an important role in the transformation of the economy. They must allocate time and resources to fund investment in social innovation by SMEs and ETI. They should embody positive finance.
Fanny Lethier and François Rivolier, co-founders of Geneo Capital Entrepreneur
The expert opinions are published under the sole responsibility of their authors and are in no way affiliated with the editors of L’Usine Nouvelle.
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