Models related to the function of DAFs are evolving at high speed. With the social and environmental changes that await us, CFOs will have to play a major role. Explanations.
To put it mildly, the DAF function is becoming more complex. By becoming multidisciplinary, the profession requires skills that are no longer just financial. Social and environmental pressure must be taken into account. ” The role of today’s CFO is to provide meaning and value in a broad sense. Its role is expanding, the DAF has not only financial but extra-financial value », points out Carine Girard-Guerraud, Professor of Finance and Corporate Governance. However, how can we give meaning to this extra-financial value? By refining its Executive M.Sc Financial Director training, Audencia’s continuing education offers some answers, both in terms of debt and capital.
A toolbox: the debt part…
To achieve this, the DAFs have a financing “toolbox”. At the heart of it, debt products. ” These products are often presented with purely legal characteristics. But new products have been developed to support the social and climatic transformation of companies, without forgetting the impact generated on the business model.. Among these debt products, “Impact Loans”. The cost of the loan is linked to the achievement of criteria that go beyond the finance part, since this cost is linked to the environmental and societal aspect. For instance, ” Arkéa, for its part, offers impact loans linked to benchmarks produced by analysis and non-financial agencies (ETI Finance, for example). Thus, if the company does better than this benchmark reference, the cost of credit is reduced”. There are also “subordinated securities” such as convertible bonds per share which offer subsidized rates. ” Tikehau, for example, offers, during LBO-type arrangements, a rate that can decrease by 1% depending on a specific indicator. A process which is therefore an incentive”.
… and the capital component in favor of the environment
Capital investors are increasingly selecting companies based on environmental, social and governance criteria…not to mention shareholder engagement. Thus, during board meetings, a constructive, even contributive dialogue is established. ” In shareholder pacts, it is no longer uncommon to see specific clauses relating to the production of an annual carbon footprint. These incentives will allow CFOs (but not only) to think about how to reduce CO2 emissions “. Incentives that lead to the implementation of KPIs in order to achieve the objectives set related to environmental neutrality. Actions which, in parallel, give meaning, coherence and cohesion to the company. ” This positive side is also reflected in the governance system of the company and its decision-making bodies. Indeed, stakeholder committees or mission committees are emerging. Committees which are made up of a plurality of expert players in the field of social and energy transition. Specialists who support CFOs in particular concludes Carine Girard-Guerraud.
Training focused on anticipation, human capital management and the transformation of the financial organization developed by Audencia for (future) Chief Financial Officers.