– You are publishing your 4th book. What can we discover in this latest book?
– “The keys to corporate finance” offer a complete Master 1 level program from a business school in this discipline. A forthcoming book will follow on the theme of in-depth finance. This good-level book deals with the accounting fundamentals to be mastered in order to understand financial transactions. A second part offers a complete and proven methodology for carrying out a financial diagnosis. A third part is devoted to the valuation of companies and investments, then a last part presents the financial securities, financing and operations of the company’s financial policies. The book is designed as a practical guide for all those who wish to deepen their knowledge of finance, to go beyond the scope of accounting amounts alone and determine financial values.
– What is special about finance functions in companies?
– The finance function is at the crossroads of all the other management disciplines, accounting, human resources, marketing, negotiation and law. The corporate financier must have a strong overall vision of the company’s strategy and is an essential co-pilot for business leaders. He must, in my opinion, have only one compass: to create value for the company.
– How do we create value?
– Value is the principle that a company should be valued upwards. By construction, the shares held by the shareholders see their values increase. It is on this increase in value that a shareholder grows rich. But before getting there, the company must focus on other types of value: first of all, it must create value in the products and services that we offer, to attract and retain a customer. . Then, you have to create value in the eyes of your employees, to continue to attract talent, to ensure productivity and product quality. Then, if the company’s results are higher than the rate of return generally required in the sector of activity, the company will deliver value to its shareholders. This triptych of value is inseparable from the overall value of the company: the customer, the employee, the shareholder!
– The finance function has greatly evolved, since now we are talking about green finance?
– Finance is on the dock regarding the climate. She was responsible, because of thousands of people worldwide, of considerable damage during the years 2008-2015 when it was possible to earn a lot without worrying about the repayment capacity of each other, and leading , during major crises, millions of people without jobs and in precariousness. Beyond that, the financing of heavy polluting industrial projects that do not respect any constraints or the environment, or even sometimes rules or ethical principles throughout the value chain has not improved the image of the discipline. . However, finance is a tool at the service of companies.
– What are the prospects for this field of action?
– Measures in the field of green finance are not new. We are finally talking about sustainability since the episodes of the health crisis, recent climatic disasters such as the heat dome in Canada. And although too few companies have yet reacted, the central banks, the largest companies and several countries, particularly under the impetus of the IPCC reports, the latest of which is catastrophic, are pushing us to opt for decisive measures in terms of climate improvement. For some time now, several companies, like Danone, as a company with a mission, have set themselves the goal of drastically reducing their carbon footprint. Today, listed companies with more than 20M€ in total balance sheet, 40Meuros in turnover and more than 500 employees or unlisted companies with more than 100M€ in total balance sheet, 100M€ in turnover and 500 employees have the obligation to produce a declaration of extra-financial performance. This statement is also extremely informative: It explains the business model of the company and details the measures taken by the company to fight against greenhouse gases, the means implemented for this purpose, the HR policies adapted to the development of its staff and the corrective axes to fight against corruption. For the largest companies, companies specializing in green rating come to score the companies from an adapted reading grid to give a “green” rating. More and more private investment funds or securities managers are using these criteria to direct investments. Moreover, the profession of “ESG analyst”, very complementary to the profession of financial analyst, has developed. Its purpose is to draw up a complete inventory of the ESG practices of companies. This allows funds to be directed towards greener companies. Tools such as green or sustainable bonds intended solely for this financing are used.
– What does ESG stand for?
– E. for Environment, which includes the capacity of a company to reduce its carbon footprint, by reducing its energy consumption, reducing pollutants and waste in its daily operation and above all, raising awareness among all from its value chain to its practices. S. for societal, because people are at the heart of today’s entrepreneurship: fair pay, shared responsibilities, consideration of the new dimension at work, inclusion of people in difficulty are all actions that improve living conditions and, by extension, the environmental footprint. Finally, G for Governance, which reflects all the necessary efforts to be made for effective, ethical, responsible management that positively influences company decisions.
– What developments now for the finance of tomorrow?
– The financial director will also play a supporting role in climate protection! The former boss of DANONE was appointed head of the International Sustainability Standards Board (ISSB), the counterpart of the IASB which defines accounting standards. Its mission is to set the standards in terms of sustainability, the evaluation criteria in order to provide a common reading grid to all investors. As for bank loans, the European Central Bank and the National Banks are already hard at work to also create a repository. No one doubts that within 5 to 10 years, from SMEs to large groups, access to financing will be conditional on the company’s carbon footprint. It is also the only path for the planet. Finance is a tool, let’s use it properly!