The ostriches and gardeners of sustainability: From retreat to renewal

The debate about the mission of companies is not a new one. Should they confine themselves to generating value for shareholders or, on the contrary, play a role in society? Milton Friedman's call to maximize profits without worrying about the rest is well known. In 1972, however, the Club of Rome was already calling for a review of this growth model. In the years following the signing of the Paris Agreement (2015), companies and financial institutions alike felt that they had a social role to play, not only in the fight against global warming but also in terms of diversity, for example.

Now the pendulum is swinging back in the other direction.  In the United States, the re-election of Donald Trump is encouraging “wokism” trials. Measures to promote the emancipation of women and minorities are being devalued, as are efforts to protect the environment. Issues such as technology, AI and the quest for “competitiveness” are now at the forefront. Europe is no exception to this phenomenon. After a first mandate focused on the “Green Deal,” Ursula von der Leyen promised that the European Commission would set about pursuing “simplification.”

Simplification, but how far? And at what cost?  There is a risk of going too far, or even burying one's head in the sand to avoid seeing the difficulties of a complex world.

Europe is the continent that invented the university and placed reason above obscurantism. So, it seems wise to look first at what the scientists say. Far from advising us to stop taking action, they are calling on us to redouble our efforts. They warn of the nexus between different issues and invite us to look at the complexity of ecosystems whose interactions we do not always understand. The IPCC reports on rising temperatures are piling up, and they are increasingly alarming. The latest IPBES report (the IPCC for nature) is also categorical (see Thematic assessment of the interlinkages among biodiversity, water, food, and health | IPBES secretariat): The abundance and quality of our food and available water, the maintenance of liveable temperatures, and the preservation of our health depend on regulating climate change and a relationship with nature that excludes predation.

It is not environmental activists or proponents of degrowth who are beginning to show concern for nature, but experienced managers who are worried about preserving the viability of their companies. A study carried out by SDA Bocconi for six French corporations grouped under the 2050Now platform reminds us that beyond ecology, it's a question of economics (Why destroying nature means destroying the economy).

Companies are beginning to feel the effects of resource depletion on their supply chains: rising coffee or cocoa prices due to climatic events in the “South,” falling farm yields due to soil degradation and the disappearance of pollinators in Europe, not to mention the pollution of mineral water catchments that threaten ancient springs. As for recruiting quality young employees who want to give meaning to their work, this is increasingly dependent on the company's brand image.  Finally, climatic events kill people, cause material damage to factories, disrupt supply chains, and destroy value. Everyone saw the floods in Valencia in Spain, where the effect of torrential rain caused by the warming of the Mediterranean was multiplied by the concreting of flood-prone areas. In Los Angeles, the damage caused by fires in an area of unsustainable urban development led to the destruction of entire neighborhoods.

There is still a long way to go, since the whole economy will have to be radically transformed, but solutions are beginning to emerge. The examples cited in the 2050Now study concern corporations in a wide range of sectors, from luxury goods to construction, finance, telecommunications, media and energy. They involve innovation but also, paradoxically, a return to previous practices: sobriety, circularity, routines such as planting hedges and watering sparingly. In nature, matter is recycled; there is no such thing as waste. Similarly, we need to move away from a predatory production system that depletes resources, towards techniques that regenerate them, while being more respectful of living things.

To keep pace with this change, the financial sector needs reliable and comparable data on what companies are doing, as well as tools to monitor their impact and dependence, hence the importance of disclosure rules, such as CSRD. We can all understand that some excesses may have been committed, and that some standards are poorly calibrated. But we need to choose our battles wisely. To be more competitive, Europeans need to lighten their load a little, and no doubt do some pruning. As gardeners know, cutting off a few branches is good for plants. But this does not mean cutting down the tree in the name of demagogic simplicity, which could quickly become a pretext for making no effort at all.