Editorial - December 2023
Temps de lecture : min
Copy & Paste
For several years now, our analysis framework has highlighted the ramp-up and return of “policies”. The area of “sustainability” is no exception. The tool for implementing this policy drive in the European Union is regulation. Let us be spared here the long list of acronyms and concepts launched, initially as voluntary initiatives, and which quickly turned into mandatory reporting.
Since the now famous COP 21 in 2015, finance professionals have seen the rollout of an unrelenting mechanism that impacts the way they do their jobs.
This is the “copy and paste” system - the copy and paste of concepts, practices and experience from accounting and finance to extra-financial aspects.
The advantage, we could say, is its predictability. The reality mainly consists of the complexities of implementation, which the originators of the texts and the supervisors struggle to resolve and sometimes even to explain.
« The devil is in the details we are told. »
Under the guise of moving from a well-known and thus reassuring world to a world that is not unknown but less uniform, policymakers are generating a multitude of obstacles that financial players are being asked to take on.
Treating the extra-financial dimension like the financial one at all levels, in the name of streamlining, is intended to reassure and make life easier, especially from the point of view of those in control and handing out the good and bad points.
The raw material and primary expression of finance are the figures, i.e. the data. This is how we are requiring extra-financial concepts such as footprints, alignments and impacts to be measured, as a mirror image, despite there being little or no existing data published and even fewer historical references. However, experience and practice are what give meaning to the figures and magnitudes.
Copying from the financial ecosystem to the extra-financial one brings its inevitable share of data providers, information system needs, controllers, auditors, etc. It is ironic to note that the advisors and certifiers of this new sustainable ecosystem often know less than the operational staff of the business lines themselves. Their main contribution is to industrialise and deploy the “copy and paste” system so that everything is “compliant”.
What is already material are the costs associated with this large-scale deployment. The “benefits” are uncertain and will probably not be for the “payers”.
Another major hurdle between theory and practice is the foreseeable disruption and even denial of certain operating principles of a market. In the financial markets, players are diverse and have different objectives and visions. In the field of sustainability, on the contrary, everyone is being asked to go in the same direction, and soon to make management decisions with new constraints that are not yet really mastered. Conflicting objectives will therefore soon appear, and choices will have to be made.
Yannick TATIBOUËT
Director of Strategic Intelligence, External Relations, and coordination on sustainable finance
December 8, 2023
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