In description
If companies anticipate that the government might impose caps on carbon emissions, they will likely invest in green technologies. This, in turn, drives down the cost of achieving reductions for all. That’s according to HEC Paris finance professors Augustin Landier and Bruno Biais. In “Emission Caps and Investment in Green Technologies,” the co-authors also show that if these firms don’t think carbon restrictions are coming, they won’t invest, and the government eventually will find it too costly to the economy to impose caps. In other words, companies’ expectations about future government action play a crucial role in reducing the carbon emissions driving rapid climate change. So, ask the researchers, how can a balance be found? 4 key findings: Anticipating future regulations spurs green technology investments, lowering emission reduction costs; Early investments in green technologies create a self-fulfilling prophecy, facilitating feasible emissions caps; Private and public actions synergize for desired outcomes through a complementary equilibrium; One large investor can have a significant influence.
By Bruno Biais , Augustin Landier
Millions of consumers, employees and investors are seeking to align their purchases, jobs and investments with their values. They want transparency and clear understanding of the brands they consume, work for, and invest in to be able to verify how they are contributing to sustainable development. Amid such a growing, unparalleled scrutiny, companies are increasingly held responsible for their business behavior, notably their environmental and social footprints. Yet there is one impact that is rarely discussed, as it remains hidden to the public eye. This is the ‘political footprint’ companies leave behind through the exercise of corporate political activities, be it lobbying or political contributions, and which often contradicts companies’ public statements.
By Alberto Alemanno
We interviewed the founders of two startups in HEC’s incubator at Station F that have come up with green innovations that are making a deep impact in their sectors. Genomines utilizes plants to selectively extract targeted metals, crucial for battery production, aiming to minimize environmental impact. Pixstart offers tailored satellite imagery analysis to monitor changes in water, forests, agricultural fields, and construction sites, optimizing environmental resource management and informing decisions.
The past six years have seen an exponential leap in student engagement going well beyond the classroom. Arguably, this came to public attention in 2018 when HEC Paris students joined representatives from France's most prestigious schools and universities in calling for radical change, called the "Manifeste étudiant pour un réveil écologique" (Student Manifesto for an Ecological Awakening). So far, it has been signed by over 34,000 students. Then there was Anne-Fleur Goll's June 2022 graduation speech that concluded with a plea to tackle climate change from within the system. This drew a standing ovation and created quite a media stir. Valentine Japiot (H.23) and Max Pernaton (H.25), two members of HEC Transition, the alumni club dedicated to the ecological transition, rang similar alarm bells, calling for a radical transformation of the system at HEC's Climate Day 2023. Quentin Oulie (H.25), currently interning at “Fermes d'avenir”, which coordinates sustainable farms, co-organized a three-week course on agro-ecology at HEC for students to think about the challenges facing the agricultural world. The list could go on and on. Those engaged are making their demands heard, and they are ready to take on responsibilities to make things happen. We met four students from different HEC programs, engaged or not in the transition.
Despite environmental, social, and governance (ESG) funds gaining popularity, their impact on reducing negative externalities, such as greenhouse gas emissions, may be limited if not approached strategically. In our study, entitled “ESG Investing: How to Optimize Impact,” forthcoming in the Review of Financial Studies, we show that investment capital could actually influence the behavior of more highly polluting companies to drive positive change for the planet.
By Stefano Lovo , Augustin Landier
The Mazars “Purposeful Governance” Chair is the new chair of the S&O Institute’s Purpose Center. Thanks to the engagement of researchers and professionals, Mazars, an international leader in consulting and audit, aims to redefine legal, strategic, financial, accounting, and governance decisions to face ecological and social challenges. Luc Paugam, Associate Professor in Accounting and Management Control, holds the chair and collaborates with Mazars to advance transformative business models. We interviewed Luc Paugam and Maximilien Rouer, Partner Sustainability leader at Mazars, to gain insight into their joint projects and collaborative efforts.
Over the past decades, HEC Paris Professor Bertrand Quélin has investigated public-private partnerships and sustainable cities. These partnerships and initiatives are essential to integrating social, economic, and environmental objectives while ensuring equitable access to resources and services.
By Bertrand Quélin
A company that produces submarine electric cables and installs them between countries to electrify the world is under close scrutiny in a context of rising energy demand and the need to preserve natural resources. Yet, Nexans has emerged as a pure player in low-carbon electrification. In this interview, CEO Christopher Guérin discusses how his audacious approach saved the company and shares the essence of Nexans’ partnership with HEC Paris, with the Orchestrating Sustainable Business Transformation Chair, directed by Sebastian Becker, Associate Professor of Accounting and Management Control, under the S&O Climate & Earth Center.
We interviewed donors to the HEC Foundation to understand their vision of the role of businesses and purpose in the sustainable transition, and their personal motivations. All high-level decision-makers and HEC Alumni, they donate to the Purpose Centre of the Sustainability & Organizations (S&O) Institute, along with dozens of individual donors, the Joly Family Chair in Purposeful Leadership* and the Mazars Chair on Purposeful Governance, to invest in research and teaching on the role of purpose in organizations. The Joly Family Chair was jointly created in 2018 by Hubert Joly, former Best Buy chairperson and CEO, now a senior lecturer at Harvard Business School.
Founder and director of the financial-analysis and short-selling firm Iceberg Research, HEC alumni Arnaud Vagner (H.2001) is known for having exposed fraudulent accounting at his former employer, commodities trader Noble Group. Iceberg Research is, like all activist short-sellers, an investigative firm that exposes listed companies that have fraudulent or misleading representations. It is also a traditional long/short fund. Short-selling activists are rare critical voices in capital markets.