Interview with Carmen Micu, President of the Board of Directors, IASE

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What is a sustainable economy? The term "sustainable economy" generally refers to a type of economy that is based on a broader set of business practices that seek economic growth without harming the environment and, preferably, creating a functioning ecosystem that manages the planet's natural resources. at a pace that allows future generations to have access to them, while leading healthy, high-quality lives. What is its role (that of the sustainable economy) in the global business environment? ESG (Environmental, Social, Governance) initiatives in the global socioeconomic ecosystem are linked to long-term value creation. Maximizing shareholder value is no longer the only goal of a corporation. Today we see how socially responsible companies are reorienting themselves towards the "triple bottom line": profit, people and planet, which are defined as the ultimate objectives of a company. There have been numerous studies analyzing the relationship between companies' environmental, social and governance (ESG) practices and their financial performance. The vast majority of them find a direct relationship: companies that act responsibly with the environment, their workforce and communities achieve good financial results.

This acceleration has been driven by growing societal, government and consumer attention to the broader impact of corporations, as well as investors and executives realizing that a strong ESG proposition can protect long-term success. of a company. The magnitude of the investment flow suggests that ESG is much more than a fad or a feel-good exercise. The same goes for the level of business performance: the Tunisia Phone Number List overwhelming amount of accumulated research shows that companies that pay attention to environmental, social and governance aspects do not experience a decrease in value creation, but quite the opposite. A strong ESG proposition correlates with higher equity returns, both from a tilt and momentum perspective. Better ESG performance also corresponds to a reduction in downside risk, as evidenced by, among other ways, lower loan default rates and higher credit ratings. Recently, IFC analyzed the performance of 656 companies in its portfolio and found that companies with good environmental and social performance tend to outperform clients with worse environmental and social performance by 210 basis points (PB) in return on equity (ROE) and 110 PB in return on assets .



Clients with high environmental and social scores outperformed the MSCI Emerging Markets Index, an index created to measure equity market performance in global emerging markets, by 130 PB. On the other hand, a deterioration in environmental and social performance resulted in worse financial performance. These companies consider engagement with stakeholders a serious commitment, employ demanding corporate governance structures and procedures, and a code of conduct that involves the rights and responsibilities of various stakeholders, including the board of directors, managers, shareholders, partners, etc. Companies with effective ESG policies and systems not only have better financial performance, but also better corporate reputation and better risk mitigation procedures, thus ensuring that the company is managed in the best interests of all its stakeholders. From your perspective, is the world ready to embrace a truly sustainable economy? I believe that until we set standards to measure the impact of ESG initiatives, the system will largely be used as greenwashing. This phenomenon is a priority problem mainly for the financial sector and capital markets.