EDITORIAL

A very particular year, 2021 is coming to an end. It is time for us to take a first look back. 

First on our list: the "Decade of Action" necessary to achieve the Sustainable Development Goals by 2030 is already well underway and time is already running out. 

That said, are there key learnings to infer from our collective progress on sustainability issues? What specific impact has the Covid crisis had on the beginning of this decade? 

Lines have undeniably been drastically redrawn: 

• The European Union delved into the heart of its Sustainable Finance Plan, one of the central pillars of its Green Deal. Indeed, the SFDR was implemented, as was the first part of the Green Taxonomy. Non-financial reporting was overhauled through the CSRD. Work has begun on a social taxonomy; 

• The United States renewed their commitment to the Paris Agreement. The SEC also revisited its non-financial reporting policy (at long last!); 

• Net Zero commitments have multiplied across companies, banks and asset managers, reflecting the increased attention paid to climate issues. They are now at the heart of the strategy of a growing number of companies; 

• International taxation has taken a decisive turn, with an agreement on a global minimum corporate tax rate. 

Despite the increasing number of announcements and commitments – and the many initiatives aimed at defining best practices – amid, also, of the continuous flow of information where each day brings its share of ESG breakthroughs, the truth is: 

• Though climate change was decidedly in the spotlight, we are far from the mark. Progress during COP26 will not set us on a 2°C global warming trajectory (to say nothing of 1.5°C);
• Biodiversity issues remain largely under the radar, though they should be prevalent in a logic of dual materiality; 

• The fight against extreme poverty was set back by 3 to 4 years. More than 160 million people have fallen back into poverty as a result of the Covid crisis. All of this feeds wealth inequalities even more glaring than income inequalities; 

• Accusations are pouring in, both in terms of green or social-washing or the ineffectiveness of insufficiently transformational ESG approaches. 

With that in mind, is this delayed action due to the inevitable inertia effect of the profound economic and regulatory changes underway? Or are the advances listed above to be considered as insufficient – or worse, little more than gesticulations? 

We contend the answer lies within each of us... While sound ESG risk management is becoming the gold standard for the serene pursuit of operations, positive impact is increasingly recognized as a key lever for innovation and value creation. 

Without further ado, here are a few concrete considerations to bear in mind as we all disperse for the end-of-year festivities (for those who will celebrate them!): 

1. Combine different viewpoints within organizations, effectively forgoing a silo logic: 

– Finance, Procurement, Human Resources or CSR departments must imperatively map out a common, co-designed route to rethink and re-design business models. 

– The question of accessing the necessary financial resources, in particular, can be resolved by recasting them as investment programs. This will be facilitated by the growing appetite of financiers for targeted sustainable products (such as green or social bonds) or those linked to sustainability performance (such as sustainability-linked bonds or impact credits). 

2. Leverage value chains. Ongoing shortages and commodity inflations are clear reminders. Forthcoming legislative developments on key issues like Human Rights and deforestation likewise hint to the importance of integrating value chains in a logic of adaptability, trust and resilience. 

3. Establish partnerships across territories and industrial sectors to nurture joint projects. For these to achieve impact at scale, they can only operate from a place of shared interests and mutual commitments. As such, listening will prove essential to identify actionable convergences. 

We would of course be delighted to discuss these issues together. We look forward to seeing you in 2022 and wish you an excellent end of year! 

Raphaël Hara 
Managing Director