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Sustainable development, CSR, RI… what’s the connection?

We often hear discussion of sustainable development, Corporate Social Responsibility (CSR) and Responsible Investing (RI). But what is the connection?

Développement durable, RSE, IR… quel est le lien ?

Sustainable development

Let’s start by looking at the origin of the notion of sustainable development
For a long time, amidst economic and demographic growth, humans polluted the Earth and exploited its resources as if they were inexhaustible.
In the 1970s and 80s, several major environmental and industrial disasters caused by humans made an impact on public opinion, including: the accident at a chemical plant in Italy resulting in the release of a cloud of toxic herbicides, several oil tanker spills, the nuclear accident at Three Mile Island in the United States, etc. These disasters led to increased awareness of the urgency of the need to take action and protect the planet.

 
In 1987, an independent commission led by the Norwegian Gro Harlem Brundtland – Prime Minister of Norway at the time – was in charge of investigating the question of development and the protection of the environment. She submitted a report – the Brundtland report – entitled “Our Common Future”. It introduced for the first time the notion of sustainable development, which must reconcile development and the environment.

Sustainable development, based on the definition given in the Brundtland report, is therefore development that meets the needs of the present as efficiently as possible without compromising the possibility for future generations to meet their own. It is based on the balance among three pillars: social (meeting the needs of society), developing the economy, and protecting the environment.

Corporate Social Responsibility

From this principle arose the notion of CSR – Corporate Social Responsibility, or the practical implementation of sustainable development by companies. It refers to the whole range of actions that a company implements to promote sustainable development. Companies that integrate CSR criteria into their strategy and their general policies aim to have a positive impact on society, their employees, providers, shareholders, the environment, etc. while remaining economically viable.

Responsible investment

Responsible investment (RI) is the application of the concept of sustainable development to financial investments. These investments select financial actors (companies, governments, supranational organisations, etc.) based on two complementary aspects: traditional financial analysis and non-financial analysis. RI covers both SRI investments that systematically take Environmental, Social and Governance criteria into account in their management processes, and other investments taking a different ESG approach (ESG thematic, exclusion, engagement, etc.).

CSR report / Declaration of non-financial performance

A CSR (or corporate social responsibility) report is a periodic document (generally annual) published by a company to provide an account of its actions and its results in terms of corporate social responsibility. It summarizes and makes public all information on the actions implemented by the company to align with the principles of sustainable development. Today, the CSR report is officially referred to as the declaration of non-financial performance, which became mandatory in 2017.
In France, certain companies are required to publish one each year (notably in accordance with the Grenelle II laws of 2010). These include companies listed on the stock market, with revenue of over €100 million or a workforce of more than 500 employees.

 
A few figures*

  • 24% of investors had never heard of RI in 2020, compared with 32% in 2019.
  • 31% of investors surveyed held RI funds in 2020, compared with only 21% in 2019.
  • 44% of investors surveyed would be willing to invest more than 30% of their savings in RI products, and 22% more than half.

*Source : CPR AM study – 2020 edition

Find out more :

» Responsible finance - Investing differently:

  • What is Responsible Investment (RI)?
  • ESG criteria
  • Fund selection
  • Labels

» Responsible investment: combating preconceived notions

  • "Responsible Investment is not concrete"
  • "Responsible investment is less profitable than a traditional investment"
  • "Responsible Investment is just a trend"
  • "Responsible investment has no impact"

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