CRIFO Patricia

The interactions between climate change and financial institutions are still insufficiently explained. Through economic research and a managerial analysis of the practices of a French institutional investor, this thesis analyzes the twofold problem faced by these organizations: measuring their extra-financial impact while managing the new financial risks induced by climate change. We first show how the organization's actors rely on a global reference framework - the United Nations' Sustainable Development Goals - to meet the challenges of measuring the impact of responsible investment. We then show that a brutal energy transition scenario significantly increases the financial risks of companies in certain sectors and that this risk is, to date, only partially taken into account by the financial markets. The analysis of practices at the micro level shows that this lack of consideration can be explained by the impact of existing routines on the construction and use of new climate risk management tools and by risk perceptions that are too far removed from those of climate scientists.

The ecological emergency calls for a marked reorientation of public and private investments from unfavorable activities to more environmentally friendly ones. Green finance can contribute to this, provided that it is equipped with tools that can properly integrate environmental impacts into the evaluation of investments. In this article, we discuss how the socio-economic calculation, currently used for the evaluation of investment projects by the State and its operators, can be a useful tool for private actors wishing to integrate the environmental impacts of their investments to a degree consistent with the collective ambition in this area. We highlight the importance of having specific and measurable environmental objectives, which legitimize and translate into operational terms our collective ambition in the face of current ecological challenges.

In 2016, the city of Paris decided to close a section of the "Georges-Pompidou" embankment road completely to car traffic. This note describes the effects of this decision on traffic conditions on the boulevard périphérique. The closure of the "voie sur berges" has increased the occupancy rate, the likelihood of congestion and travel times on the eastbound lanes, particularly for the southern ring road. Since the ring road approaches are more densely populated than the Seine approaches, it is possible that the net effect of this closure on the number of residents exposed to more polluted air was negative.

A dozen of green and sustainable labels have emerged on the financial markets of the Member States of the European Union since the creation of a first label in 1997 in France, allocated to nearly 1,360 financial products, demonstrating a quantitative success, especially in France. This article analyzes the development of such green and socially responsible labels in Europe over the past decades , their construction dynamics, and questions the real benefits of a proliferation of labels in this industry. Does the multiplicity of factors contributing to the development of labels achieve the desired end or does it encumber the market with loud but uncertain signals? While household savings are at their highest and there is a demand for financing the ecological transition, does the proliferation of labels not complicate the readability of the market ? We show that, instead of simplifying the choice of agents, the multiplication of labels tends to increase the noise provided by each of the quality signals and deteriorate confidence. Economic agents have less interest in benefiting from a generic label but are looking for less demanding labeling at a lower cost. The whole system can therefore play in a counterproductive way, each actor minimizing the intrinsic effort provided. As the number of labels grows, the information asymmetry grows and end investors may therefore turn away from labeled products. Only regulator can counter this trend.

The thesis focuses on CO2 emissions from transport in France. It questions the alignment of public policies and current developments with the objective of achieving carbon neutrality in France by 2050. At this horizon, the national low-carbon strategy aims at an almost total exit from oil, by relying on 5 levers: moderation of transport demand, modal shift, better vehicle filling, energy efficiency, and energy decarbonization. The thesis studies (1) the evolution of these levers in the past, (2) their possible evolution by 2050, (3) the importance of mobility speed, and (4) the implications for public policies. It emerges that the acceleration of transport and the increase in demand that it has allowed have strongly pushed up emissions over the end of the 20th century. Since the turn of the millennium, these variables have been more stagnant, due to a combination of structural factors oriented towards saturation, and cyclical factors such as the rise in oil prices and the introduction of speed cameras. In the future, strong technological and sobriety evolutions will be essential to reach neutrality, requiring breaks with the current trajectories.

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Promoted by managerial innovations, employee involvement in the workplace finds a logical outcome in their participation in company decisions. This participation also responds to the aspiration of employees and their representatives to intervene in working conditions, to discuss employment and remuneration issues, as well as the strategic choices of their company. Some are at the discretion of management, others are compulsory, and the participation mechanisms listed and analyzed in this book take various forms: economic rights of the works council, collective bargaining, representation on the board of directors, etc. How do these channels fit together? How do they contribute to the improvement of working conditions, to the ecological transition, to the social responsibility of companies? What can we expect from them in terms of competitiveness? A synthetic and critical overview, while the PACTE law of May 22, 2019 prescribes greater employee participation in the capital and strategic decisions of companies." (publisher source).

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Financial markets play a major role in contributing to the transition to a low-carbon economy. Although many initiatives and developments are taking place, this is just the beginning. In this article, we argue for a theory of change—a theory rooted in logics that will help financial markets play a key role in the transition to a low-carbon economy. We argue that the current dominant logics in finance—short-termism, predictability of the future based on ex-post data, price efficiency, and risk-adjusted returns—impede the effective integration of climate considerations in financial markets. We suggest four alternative logics that can enable and foster a change toward the low-carbon economy: long-termism, systems interconnectedness, carbon price dynamics, and active ownership.

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The thesis aims to develop a framework for measuring the alignment of financial portfolios with climate goals, taking both traditional modern portfolio theory and financial risk analysis frameworks, as well as climate science, as a starting point. It is the first attempt to develop scientific benchmarks for the financial portfolio. The framework uses as a starting point the concept of "optimal diversification" based on modern portfolio theory and the efficient market hypothesis. According to this theory, optimal strategies involve buying the "market portfolio." It postulates that this strategy cannot, however, be aligned with a portfolio strategy aligned with a 2°C scenario. Such a science-based portfolio strategy may, however, make sense for financial institutions that consider multiple objectives (financial and non-financial) or financial institutions that believe that markets are mispricing the financial risks associated with the transition to a 2°C economy. Strategies associated with 2°C can outperform the market. Under the assumption that the transition to a low-carbon economy has a risk factor, for which the thesis provides a series of theoretical proofs, portfolio strategies can seek to buy the "2°C market" by seeking and managing "optimal diversification." The model thus extends the logic of diversification to reduce the risk, inherent in modern portfolio theory, from the asset class to the sector and technology level. After the model was developed, it was tested by a series of insurance companies, asset managers and portfolio managers. In total, over 250 institutional investors have applied the model at the time of publication. In addition, the model has been tested on approximately 10,000 funds. In addition, two European central banks have applied the model internally as part of a 2°C scenario analysis of their regulated entities (pension funds and insurance companies). In a survey of 25 investors, 88% said the framework was as relevant or more relevant than existing climate assessments, and 88% said they were likely or very likely to use the methodology going forward.

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According to the stakeholder theory, Corporate Social Responsibility (CSR) is the answer given by companies to the increasing pressure from employees, shareholders, local communities, environmental NGOs or regulators to take into account the environmental and social impacts of their activities. The challenge is not simply to compensate for negative externalities but to transform companies to allow for sustainable growth. Thus, CSR pushes companies to be proactive and to exceed regulatory expectations. However, how to reconcile such different and even opposing objectives? As more and more companies integrate CSR into their strategies, governance processes seem to be the missing link in bringing together economic, social and environmental performance. This thesis presents empirical and theoretical arguments for the impact of governance at its highest level, from the board of directors to the CEO. After an introductory chapter, Chapter 2 analyzes the link between board composition and the integration of CSR into corporate strategy. It is based on a law on the representation of women on boards of directors. Adopted in France in 2011, this law has led to the appointment of new directors, most of whom are younger than their predecessors. However, this chapter shows that the increase in diversity on boards is not correlated with changes in financial and non-financial performance. This chapter is based on a study of SBF 120 companies from 2009 to 2015. However, while the characteristics of the directors are involved in the decision-making process, the implementation of strategies and the management of the company is entrusted to the CEO. Through a remuneration system with a variable component, the board of directors strives to align the interests of the CEO with its own. Chapter 3 examines the effectiveness of variable remuneration based on environmental or societal criteria. It shows that the impact of these "CSR bonuses" depends on the company's governance model. For companies with a shareholder governance model, CSR bonuses seem to have only a negative impact on financial performance. On the other hand, for companies of the partnership type, these bonuses effectively improve extra-financial performance without reducing financial performance. This empirical study is based on a global panel of 3500 companies over the period 2006-2015. Chapter 4 proposes a theoretical model to analyze the impact of the intrinsic or extrinsic nature of incentives. Based on the principal-agent model developed by Che and Yoo (2001), this chapter analyzes different incentives for a company composed of two agents working on a CSR task. Three scenarios are studied: both agents receive financial compensation, both agents are intrinsically motivated, one agent is intrinsically motivated and the other financially motivated. The model shows that the optimal scenario for the principal depends on the level of intrinsic motivation but also on the interdependence between the two agents' decisions. In the particular case of the remuneration of company directors, the empirical evidence shows that including CSR criteria in the remuneration is more adapted to companies with a high decisional interdependence. The conclusion traces the link between governance and CSR at several levels, and discusses the implication of networks and mimicry effects between firms.

We develop a model of organization change where the production of homogeneous good tates place under uncertain demand. In a two-stage duopoly game, firms choose first their organizational structure, and then determine market quantities and wages. Two results are highlighted. First, whether firms adopt organizational change or not depends on the volatility of demand and te availability of skilled labor. Second, organizational change generates a higher level of wage inequality both between and within education groups. This model provides thus a theoritical explanation for the rising wage inequality observed in major OECD countries, and its divergence among them.

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Corporate social responsibility has gone mainstream, and many companies have taken meaningful steps towards a more sustainable future. Yet global environmental indicators continue to worsen, and individual corporate efforts may be hitting the point of diminishing returns. Voluntary action by the private sector is not a panacea-regulatory action by the public sector remains necessary. Such public sector progress will be more likely if it is supported by influential segments of the business community. Recent court rulings in the U.S. make it easy for companies to hide their political activities from the public, yet the indicators of CSR used by ratings agencies and socially responsible investment funds mostly ignore corporate political action. We argue that it is time for CSR metrics to be expanded to critically assess and evaluate firms based on the sustainability impacts of their public policy positions. To enable such assessments, firms need to become as transparent about their political activity as many have become about their CSR efforts, and CSR rating services and ethical investment funds need to demand such information from firms and include an assessment of corporate political activity in their ratings. † We thank the Albert and Elaine Borchard Foundation for their generous financial support.

This thesis focuses on the issue of financing the low-carbon energy transition and the role of the financial and banking sector in achieving international climate objectives. The challenges of the energy transition for the financial sector are threefold. First, it is necessary to understand the need to adopt a differentiated analysis of household energy consumption, in particular that related to housing, in the search for a balance between macroeconomic objectives and individual financial and economic trade-offs. The first chapter analyzes household energy expenditures by typology and proposes a segmentation of the microeconomic behaviors of the actors and of the energy transition market in housing. It is then necessary to find a way to enhance the value of private investments in energy transition, which are still difficult to massify, especially when it comes to the energy performance of housing. Chapter 2 deploys a model based on a frontier function optimization technique to account for the presence of a green value in a local private housing market in France. Finally, the multiple risks related to climate change must be integrated into the mapping of the final risks (specific, systematic and systemic) that weigh on financial institutions, in the evaluation of their activity (the management of financial flows) but also in the evaluation of the risk profile of their balance sheet. Financial intermediaries, but also the institutions that regulate them, have a key role to play in establishing a social value of carbon endogenous to financial markets (Chapter 3).

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The work in this thesis focuses on the effect of the adoption of voluntary environmental practices by firms on their innovation performance and on the social welfare of countries. This thesis consists of five chapters. Chapter 1 shows that the adoption of these environmental practices has a positive impact on product innovation. Moreover, this impact is all the more important the earlier these practices are implemented. Chapter 2 asks whether the environmental practices of firms enable them to overcome the obstacles to innovation (defined here in a general way). To this end, Chapter 2 distinguishes three types of barriers: financial, human and market. It concludes that the implementation of green practices allows firms to overcome the financial and human barriers that can slow down innovation activities. However, the adoption of green practices is neutral with respect to market barriers. Chapter 3 analyzes the effect on environmental innovation of the implementation of two knowledge management practices: a written knowledge management policy and a knowledge sharing culture. He shows that these two knowledge management practices each improve green innovation. However, it seems that a culture of knowledge sharing within the firm plays a more significant role in green innovation than a written policy, and because green practices are also management tools from the firm's perspective, they may not be neutral for employees. Chapter 4 thus focuses on the impact of the adoption of environmental practices on psychosocial risk. Finally, chapter 5 uses a theoretical model of vertical differentiation to investigate whether, in terms of social welfare, cooperation in setting an international eco-label criterion is preferable to the situation where two national labels coexist. The results show that the overall surplus in the case of one international label criterion is always greater than or equal to the overall surplus in the case of two national labels. However, this improvement is at the expense of one of the two countries.

This paper examines the relationships between independence, director unobservable ability and firm performance. We develop an original empirical strategy based on the AKM model to estimate separately director fixed effects (as a measure of individual ability) and firm fixed effects. We show that board independence has an ambiguous impact on corporate performance because of two opposing forces: one related to the director nomination process, the other one related to board functioning. On one hand, we report that independence is positively correlated with individual fixed effects, an evidence consistent with a nomination process of independent directors based on individual ability. On the other hand, and regarding board functioning, we show that independence, netted out individual ability, is negatively correlated with firm performance suggesting that independent board members experience an informational deficit (as compared to affiliated directors).

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We examine whether the extra-financial performance of countries on environmental, social and governance (ESG) factors matters for sovereign bonds markets. Using a panel regression model over a data set with 23 OECD countries from 2007 to 2012, we show that ESG ratings significantly decrease government bond spreads. © 2017 Board of Trustees of the University of Illinois.

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What are the determinants of borrowing cost in international capital markets? Apart from macroeconomic fundamentals, are there any qualitative factors that might capture sovereign bond spreads? In this paper we consider to what extent Environmental, social and governance (ESG) performance can affect sovereign bond spreads. First, countries with good ESG performance tend to have less default risk and thus lower bond spreads. Moreover, the economic impact is stronger in the long-run, suggesting that ESG performance is a long-lasting phenomenon. Second, we examine the financial impact of separate ESG dimensions, and find that the environmental dimension appears to have no financial impact whereas governance weighs more than social factors. Third, we examine cross-countries differences and show that ESG performance has a more significant and stronger impact in the Eurozone than elsewhere in OECD countries. Fourth, we include evidence from the global financial crisis and find stronger influence of country sustainability performance during crisis period.

This thesis aims to analyze whether environmental, social and governance (ESG) performance is integrated by corporate and sovereign debt markets. The first chapter focuses on ESG information published with negative content and its negative impact on the cost of debt. Specifically, in the industrial and utility sectors, negative social and governance events increase the cost of debt. Also, a good general level of ESG performance acts as an insurance mechanism against these negative events. In a second chapter, the results of a portfolio simulation integrating corporate ESG performance will be presented. A portfolio manager can improve the aggregate level of ESG performance of the portfolio by 1.5 standard deviations without decreasing the financial performance. Thus, the manager can combine this integration with financial asset allocation strategies or absolute return strategies. In a third chapter, I analyze the results on the reduction of the cost of debt due to a good environmental and social performance of emerging sovereigns. Finally, in the fourth chapter I describe how the governance performance of sovereigns influences the difference between the yield issued in foreign currency and that issued in local currency. In developed countries this difference increases with political risk, i.e. foreign yield increases faster than domestic yield. In emerging countries, the opposite effect is observed. This difference between the two yields varies more strongly with an increasing proportion of domestic debt held by foreign investors.

This article studies the relationship between board independence and firm operating performance in French listed companies. We take advantage of an original database, with a time-series dimension that can be used to mitigate heterogeneity and dynamic endogeneity issues. In addition, this database can be disaggregated at the individual (director) level. This design enables us to introduce firm fixed effects and individual fixed effects in firm performance equations, thereby controlling for heterogeneity at the firm and individual levels. Our main result is to document a significant negative relationship between independence and accounting performance. This result suggests that, in the French context, the costs of independence (i.e. the informational gap supported by independent directors compared to insiders and affiliated directors) outweigh the benefits of independence (i.e. the reduction in agency costs).

While often criticized, independence remains the ultimate criterion for evaluating board composition, whether for regulators or shareholder activists. In this study, we examine the relationship between board independence and firm operating performance in a panel of French listed companies, paying particular attention to heterogeneity and endogeneity concerns. We take advantage of an original database, with a time-series dimension that can be used to mitigate heterogeneity and dynamic endogeneity issues through GMM estimators. In addition, this database can be disaggregated at the individual (director) level. This design enables us to introduce firm fixed effects and individual fixed effects in (firm) performance equations, thereby controlling for heterogeneity at the firm and individual levels. To our knowledge, this is the first paper so far to provide a systematic account on this issue for France. Our main result is to document a significant negative relationship between accounting performance and the independence status (irrespective of the person). This result supports the argument of an information gap suffered by independent board members, as developed by Adams and Ferreira (2007).

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This thesis attempts to shed light on the possible links between the commitment to sustainable development of companies and countries and performance. The first part deals with the microeconomic aspect by focusing on the link between corporate social responsibility (CSR), transposed from sustainable development to the corporate world, and firm performance. The determinants of CSR decisions play a central role in better understanding the CSR/performance link. In particular, Chapter 1 shows that the size of the company determines the level of consideration given to social and environmental issues, highlighting that SMEs, which are less concerned by CSR than large groups, invest more in issues related to their stakeholders. Chapter 2 explores how corporate governance, and in particular ownership structure, affects companies' CSR commitment. It shows that the development of CSR approaches is negatively related to the presence of majority shareholders. After highlighting firm size and ownership structure as key factors in CSR decisions and potentially important determinants of the CSR-performance relationship, Chapter 3 takes an example of CSR practices: "good workplace atmosphere" and examines its impact on the level of employee effort. The results conclude that there is a negative correlation between good work atmosphere and productive effort and no link with cognitive effort. These results provide a better understanding of the underlying processes and mechanisms that might intervene between CSR and firm performance.The second part, macroeconomic, focuses on the relationship between governments' environmental, social and governance (ESG) commitment and economic performance. More specifically, the analysis raises two questions. The first concerns the link between extra-financial performance and sovereign risk. The reflection is based on a financial logic and the notion of sustainable development and/or ESG commitment is reduced to extra-financial information, which institutional investors use to assess sovereign risk. In particular, chapter 4 measures the impact of this extra-financial rating on the performance of bond funds. It shows that macroeconomic factors are not the only determinants of the price of a sovereign bond. Financial markets also take into account the extra-financial performance of governments, in the sense that good extra-financial ratings reduce the cost of sovereign debt. Chapter 5 constructs a composite index, sensitive to the level of ESG commitment of governments, and shows that the effect of ESG factors on the performance of sovereign bonds varies according to the maturities, dimensions, regions and periods selected. The second question concerns the effect of ESG practices on economic growth. Chapter 6 examines the causal links, in the short and long run, between the ESG performance of governments and economic growth. The results show that the two are co-integrated. They suggest that while ESG performance positively affects the GDP growth rate in the short run, its impact is not positive in the long run.

Journal menu CORPORATE GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY: A TYPOLOGY OF OECD COUNTRIES Download This Article Patricia Crifo, Antoine Rebérioux DOI:10.22495/jgr_v5_i2_p2 Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This article investigates the relationships between corporate governance and Corporate Social Responsibility (CSR). The underlying intuition is that governance factors are major determinants of CSR policies and extra-financial performance. More precisely, we identify three main factors that determine the strength of CSR engagement at the firm level: the structure of equity ownership (identity of shareholders), the composition and structure of board of directors, and the regulatory framework on corporate governance and CSR. We show how evolutions regarding corporate governance over the three previous decades have paved the way and shaped the rise of CSR. In addition, we elaborate a typology of CSR and governance structures that characterize OECD countries depending on whether the CSR reporting regime is stringent versus non-stringent, and on whether the corporate governance model is based on the shareholder, stakeholder or hybrid regime.

This paper analyzes how different combinations of Corporate Social Responsibility (CSR) dimensions affect corporate economic performance. We use various dimensions of CSR to examine whether firms rely on different combinations of CSR, in terms of quality versus quantity of CSR practices. Our empirical analysis based on an original database including 10,293 French firms shows that different CSR dimensions in isolation impact positively firms’ profits but their effect in term on intensity varies among CSR dimensions. Moreover, the findings on the qualitative CSR measure, based on interaction between its dimensions, show that the substitutability of these dimensions is highly significant for firm performance. However, in terms of the intensity, those interactions produce differential effects. Actually, asking whether a firm starting with a certain configuration cannot perform better by adding or removing some dimension(s) we found that only one configuration fulfills this requirement: green and HR. The interpretation is that when a firm starts with this configuration then it is better not to move to another configuration. In all other configurations, firms can always improve their profits either by adding or removing some dimensions. Finally, the profitability of CSR investments in French firms seems to rely on a specific qualitative mix of different CSR dimensions rather than a pure quantitative approach accumulating practices without designing a consistent set of interactions among them.

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This article examines whether the extra-fi nancial performance of countries on environmental, social and governance (ESG) factors matter for sovereign bonds markets. We propose an econometric analysis of the relationship between ESG performances and government bond spreads of 23 OECD countries over the 2007-2012 period. Our results reveal that ESG ratings signi ficantly decrease government bond spreads and this fi nding is robust for a wide range of model setups. We also find that the impact of ESG ratings on the cost of sovereign borrowing is more pronounced in bonds of shorter maturities. Finally, we show that extra-fi nancial performance plays an important role in assessing risk in the financial system. In particular, the informational content of ESG ratings goes beyond the set of quantitative variables traditionally used as determinant of a country's extra-fi nancial rating such as CO2 emissions, the share of protected areas, social expenditure and health expenditure per GDP, or the quality of institutions, and off ers an additional evaluation of governments' ESG performance that matters for government bond spreads.

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This paper sheds light on the impact that environmental, social and governance (ESG) corporate practice disclosure has on equity financing. We present a unique framed field experiment in which professional private equity investors competed in closed auctions to acquire fictive firms. We hence observe that corporate non-financial (ESG) performance disclosure impacts firm valuation and investment decision and we quantify to which extent. Main result is an asymmetric effect, investors reacting more to bad ESG practice disclosure than to good ESG ones. Our findings are discussed in terms of practical implications for both investors and firm managers.

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This paper analyzes the economics of Corporate Social Responsibility (CSR), as a private response to market imperfections in order to satisfy social preferences. Depending on whether they affect regulation, competition or contracts, market imperfections driving CSR decisions are classified in three categories: public goods and bads and altruism. imperfect competition. and incomplete contracts. We successively present these drivers of CSR decisions and highlight the nature of incentives (external or internal) at work and the testable (and tested) hypotheses in the reviewed studies. We finally review the link between CSR and financial performance, as well as between CSR and social and environmental performance. A twofold discrepancy appears in the literature, opening future research paths: a disconnection between our understanding of CSR drivers and CSR impacts. and a knowledge gap between CSR financial and social consequences, the latter having received little attention.

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While often criticized, independence remains the ultimate criterion for evaluating board composition, whether for regulators or shareholder activists. In this study, we examine the relationship between board independence and firm operating performance in a panel of French listed companies, paying particular attention to heterogeneity and endogeneity concerns. We take advantage of an original database, with a time-series dimension that can be used to mitigate heterogeneity and dynamic endogeneity issues through GMM estimators. In addition, this database can be disaggregated at the individual (director) level. This design enables us to introduce firm fixed effects and individual fixed effects in (firm) performance equations, thereby controlling for heterogeneity at the firm and individual levels. To our knowledge, this is the first paper so far to provide a systematic account on this issue for France. Our main result is to document a significant negative relationship between accounting performance and the independence status (irrespective of the person). This result supports the argument of an information gap suffered by independent board members, as developed by Adams and Ferreira (2007).

This paper develops a two-way director-firm fixed effect model to study the relationship between independent directors’ individual heterogeneity and firm operating performance, using French data. This strategy allows considering and differentiating in a unified empirical framework mechanisms related to board functioning and mechanisms related to director selection. We first show that the independence status, netted out unobservable individual heterogeneity, is negatively related to performance. This result suggests that independent board members experience a strong informational gap that outweighs other monitoring benefits. However, we show that industry-specific expertise as well as informal connections inside the boardroom may help to bridge this gap. Second, we provide evidence that independent directors have higher intrinsic ability as compared to affiliated board members, consistent with a reputation-based selection process.

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This article analyses the interactions between various dimensions of corporate social responsibility (CSR) that mediate the relationship between CSR and financial performance. We hypothesize that the absence of consensus in the empirical literature on the CSR-financial performance relationship may be explained by the existence of synergies (complementarity) and trade-offs (substitutability) between the different CSR components. We investigate such relationship using a final unbalanced panel sample of 1094 observations (around 300 firms per year) from 15 countries over the 2002-2007 period. Our results show that responsible behaviours towards employees (human resources dimension) and towards customers and suppliers (business behaviour dimension) appear as complementary inputs of financial performance, indicating mutual benefits and less conflict between those stakeholders. Conversely, responsible behaviours towards customers and suppliers and towards the environment appear as substitutable inputs of financial performance, suggesting more conflict between or over-investment towards those stakeholders.

This paper surveys the economic literature on Corporate Environmental Responsibility (CER). It first defines and illustrates what CER is, and what it is not (namely green washing). It then examines various rationales for firms to implement CER programs: to respond to social pressure, pre-empt regulations, strategically differentiate from competitors, raise entry barriers, retain and motivate employees, lower the cost of capital, promote discipline and good governance, and foster innovation. Whether implementing CER enhances economic welfare is considered next. The paper ends by sketching what appear at this point to be some worthwhile research directions.

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This article analyses the complementarity between various dimensions of corporate social responsibility (CSR) and financial performance. We hypothesise that the absence of consensus in the empirical literature on the CSR-financial performance relationship may be explained by the existence of synergies (complementarity) and trade-offs (substitutability) between the different CSR components. We investigate such relationships using a sample of 595 firms from 15 European countries over the 2002-2007 period. The results suggest some kind of trade-offs between CSR components. Some CSR combinations appear as relative complements, human resources and business behaviour towards customers and suppliers, suggesting mutual benefits and less conflicts between those stakeholders. Conversely, environment and business behaviour towards customers and suppliers appear as relative substitutes, suggesting more conflict or over investment between such types of stakeholders.

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Socially responsible investment (SRI) in France is based on a “best in class” approach as opposed to the “exclusion” approaches used in other countries such as the United States or United Kingdom, where the rejection of sin stocks has been dominant historically. The objective of this research note is to examine whether the French SRI market, by focusing more on financial rather than on ethical considerations, compared with other countries such as the United States, the United Kingdom, or even Sweden, may lead to a form of “mainstreaming” of SRI processes. The authors explore several convergent mechanisms. First, the authors analyze the importance of the mainstreaming issue in the history of SRI as well as in the contemporaneous debate in the academic literature on the links between financial and extra financial (SRI) performance. Second, the authors review the role played by ethical finance laws adopted in France in the early 2000s in the development of the SRI market. Finally, the authors discuss the results of a survey of French SRI analysts working both for large institutional investors and asset managers in France in 2009.

This paper examines the economic determinants of corporate social and environmental responsibility (CSR) practices, i.e. the voluntary integration of environmental, social and governance factors into corporate strategy. We present the theoretical and empirical literature in a unified framework that explains the development of these CSR practices based on three categories of market imperfections: the existence of externalities and public goods, imperfect competition and incomplete contracts. We also examine the impact of CSR on social performance and welfare and identify avenues for future research.

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The concept of "Bottom of the Pyramid" suggests that multinational companies can contribute to poverty reduction in emerging countries by developing a dedicated offer for low-income consumers. In order to better understand the validity of this proposition, the thesis focuses on firms' strategies towards this segment and relies on an action research program conducted with the Lafarge Group, at its headquarters and in a subsidiary in Indonesia. It proposes a framework for analyzing corporate strategies that contrasts two forms of approach: an approach that seeks to maintain the firm's legitimacy ("license-to-operate") on the one hand, and a search for commercial opportunities on the other. The thesis shows how Lafarge evolved from the first to the second approach between 2007 and 2010. It analyzes the factors that led to this change and in particular the role played by two pilot housing programs launched in Indonesia as part of the action research, which contributed to the construction of over 800 houses. The thesis then distinguishes between two broad forms of business strategies, contrasting market capture and market creation approaches, and highlights the importance of local market specificities in choosing one or the other. Finally, the thesis analyzes, within the framework of market creation strategies, the conditions under which partnerships between companies and nonprofit organizations are sources of innovation and learning for the firm. It highlights three key elements: the sharing of a common vision between partners, the joint creation of programs and the implementation of intentional learning processes.

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Three dimensions of the technical progress hypothesis are explored. First, it is explained why, in the United States in particular, periods of strong growth in the skill premium have coincided with periods when the supply of skilled labor was lowest (1971-1979). In a model of endogenous growth with innovation, the bias toward individual ability increases intra-group inequality and reduces the incentive for ordinary-ability individuals to educate themselves. Growth based on technical progress biased in favour of individual capabilities thus amplifies the effects of the technological bias on wages through an insufficient response of the supply of skilled labour. Second, the analysis focuses on the cyclical nature of innovation and inequality in the long run. In a model where the choice of the sector in which researchers develop projects is endogenous, we show that innovators have an incentive to adopt technologies complementary to skilled or unskilled labor alternately. This alternation exerts a non-monotonic pressure on inequality, so a permanent bias is not robust in this framework. Third, the organizational dimension of technical progress is studied. The analysis developed focuses, on the one hand, on the determinants of organizational choices and on the relations between innovation, organization and market structure in a growth model. On the other hand, we explore the more microeconomic foundations of innovative organizational practices, i.e. the allocation of multiple productive tasks in an agency relationship, in order to highlight the interaction between multiskilling and incentive compensation. The main predictions of these two models are finally tested econometrically on French data from the 1997 survey "Organizational Change and Computerization".