On January 16th, a letter sent to companies by Larry Fink, CEO of BlackRock, made its way around the world. With such widespread diffusion, the following sentence was given particular attention: “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” When an asset management company that has surpassed 6,000 billion euros and is the reference shareholder for the world's largest companies, makes a statement of this kind, it sets the stage to revolutionise the notion of economic performance.
On January 17th, The World Economic Forum’s annual Global Risks Report once again underlined that threats to the global economy for the next 10 years are primarily environmental and social. It’s worth highlighting the various statements made by Anand Mahindra, president of the Indian group Mahindra: "The success of business today is based on a low carbon trajectory. In my group, we are convinced that sustainable development is an economic opportunity, offering jobs that make sense to young people today.”
European expert group takes measures towards sustainable finance
On January 31st, the European High-Level Expert Group on Sustainable Finance (HLEG), in which I have the honour to participate, published its recommendations. They must serve as a basis for the action plan that is to be unveiled by the European Commission in mid-March. They cover wide-ranging actions concerning not only the development of green finance but also the more comprehensive transformation of the financial sector. As concluded in the report: " The ultimate test of the HLEG will not just be the degree to which its specific recommendations are adopted, but the extent to which sustainable finance becomes a permanent feature of European markets and policy-making."
But for the time being, the financial markets continue their mad rush, convinced that the sky is the limit for accumulated profits. The value of stock indices continues to explode even if they remain globally aligned with a dangerous global warming trajectory of 4 ° C.
10 years after the financial crisis that shook the world, we can bet that if they remain deaf to the messages sent by Blackrock, the World Economic Forum and Europe, the financial markets could once again pay a high price for their lack of correlation with the real economy. And when they go under, the entire world economy sinks!
Anne-Catherine Husson-Traore, @AC_HT, CEO of Novethic