Since the Pacte law came into force in 2019, French companies are encouraged to take into consideration the environmental and social issues related to their activity. The largest are also required to complete their annual report with extra-financial criteria. Tomorrow, their documents will be weighed down with a new imperative: to classify their activities according to their eligibility for at least one of the six objectives of the European green “taxonomy”, this mechanism which aims to direct investments in the sustainable economy sense of environmental transition. Awaiting examination in the Parliament of Strasbourg, the project put together by Brussels provides for its gradual entry into force by 2024.
Spurred on by major international initiatives, financial players are actively preparing. To report on their transformation, the Paris marketplace inaugurated the Sustainable Finance Observatory at the end of 2020. At this stage (the last referenced), for example, French insurers are posting a “rate” of greening of 5% of their outstandings (2,600 billion euros). It’s still not much, but it’s an increase of 31% compared to 2019. They also pass two-thirds of their outstandings through the sieve of extra-financial analysis and – given the exponential cost of natural risks – climate risk .
Audit. Investors are professionalizing their responsible approach to finance. This is the famous ESG in reference to environmental, social and governance criteria. They are multiplying thematic funds, favoring the environment segment for the time being. Demonstration with Tikehau Capital, a company founded in 2004 which manages 31 billion in assets in 13 countries including France. The asset manager claims to be “a pioneer in alternative investments”. “To be profitable, you have to be sustainable. This is why 100% of our targets are audited according to financial and extra-financial criteria,” says Cécile Cabanis, Deputy Managing Director and Head of CSR Policy. Nearly 70% of its activity is “ESG compliant” and 80% of its vehicles eligible for the European green taxonomy mechanism.
To progress, Tikehau Capital has set up a thematic platform armed with experts. Their mission is twofold: “to understand the new system in which companies must fit to create value; train in-house investors”. In its thematic funds, the audit of the ESG impact of the targets takes place before they go through the investment committee. During the launch in 2017 of one of its first vehicles dedicated to the energy transition in partnership with TotalEnergies (one billion euros raised), the team established a five-pillar analysis process which was generalized in order to overcome the absence of historicity in innovative activities. In 2021, Tikehau structured its first private debt “impact” fund; this time, the ESG criteria are co-defined with targets, whose interest rates are adjusted according to the achievement or not of these objectives. The investor has just announced the establishment of a “Climate Action Center”, a “financial innovation platform in favor of decarbonization”. By 2025, it aims to raise 5 billion euros on this theme.