This collective work deals with a subject currently much debated among researchers and practitioners, focusing on the adaptation of finance to ESG (Environmental, Social, and Governance) principles. It presents a scholarly and original construction in four parts and 16 chapters, in which the authors alternate interviews with recognized experts, answers to questions, and avenues for progress. It skillfully combines theoretical developments and practical considerations.
The first part recalls the fundamental concepts of finance – the notions of time and interest, yield and profitability, risk, extra-financial value – and it shows how to adapt them to the constraints imposed by the protection of the environment, social protection, and better governance. The second part is devoted to microfinance. It covers the analysis of margins (“the scissor effect”), the break-even point, the internal rates of return and profitability required by shareholders, the valuation of the company and its buyback. The third part deals with macro-finance and deals with market law, portfolio management, arbitrage, options and derivatives, crypto-assets and blockchain. The last part presents CARE environmental accounting.
The answers to the questions are both nuanced and documented. They show the extent of the adaptations already made by the scientific community and by professional circles, as well as the progress still to be made in order to find a relative consensus on these practices and on these concepts. Reflections on the profitability of projects and companies, discount rates, valuation methods, portfolio management and arbitration, as well as the contributions of crypto-assets, are particularly illuminating.
The author-coordinator (telecom engineer) is a financial analyst in the telecommunications sector.
Jean-Jacques Pluchart