The long-term urgency: A new state/corporate relationship for lasting prosperity

Sustainable prosperity is within reach if we reinvent the relationship between public power and private actors, between state and civil society, between political power and economic forces. So what steps should be taken to encourage, without forcing, any company to commit itself to a superior, democratically determined social project? Pascal Demurger delivers in this report proposals that are both ambitious and realistic.

Synthesis

No one today can in good faith deny the seriousness and urgency of the social and environmental challenges facing our society, or refute the severe constraints that weigh on both the state and business in a context of international competition. Reconciling these economic constraints and the urgency to act must be at the heart of the public debate.

We imagine, even though we are still struggling to draw the contours, the magnitude of the transition that we must now carry out, a transition even in the form of a revolution. In a sense, the health crisis has served as a dress rehearsal. Thanks to the latter, public power, mired in a crisis of stories and results for decades, has been restored to its full capacity to act and the notion of “public interest” has made itself felt in the eyes of all by putting health above all else. set Other Considerations. Better yet, yesterday’s dogmas, which we thought were elusive, have succumbed in the face of the urgency, the “at all costs” supplanting budgetary orthodoxy, the solidarity of the greatest number imposing itself on the individualism of the few . The economic actors have demonstrated their remarkable capacity for adaptation and mobilization, as well as their potential contribution to the public interest.

Because the order has made it possible to reconcile interests and conscience, we must now speed up by thoroughly rethinking our goals and our method of achieving them. Lasting prosperity is possible. It is even within reach if we know how to reinvent the relationship between public power and private actors, between the state and civil society, between political power and economic forces. It is up to the State to determine the ambition and to the companies to implement the solutions. This is, for tomorrow, the challenge of a new contract between this and that of a common pact for a huge impact. So what steps should be taken to encourage, without forcing, any company to commit itself to a superior, democratically determined social project?

Two major revolutions should enable us to achieve stronger corporate engagement. The first consists for the government in distinguishing economic actors on the basis of their behaviour. How can we imagine that companies that take a virtuous approach will still be treated the same tomorrow and that others will continue to impose the costs of their nuisance on society? Those who have put the issue of their positive impact at the heart of their strategy and those who don’t even try to limit their negative impact? However, the incentive levers are not lacking. For example, we propose to modulate corporate tax (initially) tomorrow, with differentiated rates, on the scale of companies’ environmental efforts. In addition to this comprehensive behavioral tax, access to conditional state aid and to public procurement, which are awarded by putting environmental and economic criteria on an equal footing, should also be reconsidered. A premium for virtue and collective responsibility.

But to rigorously and fairly differentiate companies, the second revolution requires a preliminary redefinition of what their “value” is. Therefore, we propose to reassess their performance based on both extra-financial and financial criteria to give them a impact score globally, calculated and made public in the same way for everyone, to guide the choices of consumers and investors. In terms of collective issues and a better long-term view, there is also an urgent need to rethink corporate governance, opening it up in a much broader and more transparent way and promoting a shareholder philosophy free from logical short-term profitability.

The proposals presented here are both ambitious and realistic. They provide a kind of guidance for action, which applies without delay and does not increase the mandatory fees or state taxes. On the contrary, the transition from a logic of recovery to a logic of prevention could soon prove to be a very important source of savings. As indicated in this report, certain avenues are already emerging. In many areas, a first step has been taken that has paved the way. However, many brakes and dogmas remain, which must now be broken: if the first step costs, it is the second that counts. So let’s go, the long time the state of emergency has sounded.

Introduce

Rebuilding the relationship between state and business in the service of sustainable prosperity

  • Establish a corporate tax scale based on the “sustainable” portion of their revenue
  • Making state aid to companies subject to environmental, social and governance (ESG) criteria
  • Set a minimum environmental threshold in the assessment of public procurement
  • Incorporate the principle of “the most ecologically and economically advantageous offer” into European law
  • Reforming the “prudential mechanisms” to focus a minimum share of banking and insurance investment on financing the ecological transition

Rethinking the value of the company in light of its environmental and social impacts

  • To a ” impact score ESG” of companies
  • Open a reflection on the integration of extra-financial standards in business accounting
  • Set up a “stakeholder committee” supported by the board of directors in companies with more than 250 employees
  • Make an annual consultation of the general meetings of listed companies on their climate policy mandatory (“ Say about climate
  • Modulate shareholders’ voting rights based on their presence in the capital
  • Index the variable portion of executive pay against the long-term non-financial criteria
  • Create a great Ministry of Economic and Ecological Transition

The author
Pascal Demurger is director of Maif. He speaks in this report in a personal capacity and not on behalf of Maif.

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