• NMG Staff

Business for good and growth: the double promise


This article was originally published by Véronique Méot


These bosses make profitability rhyme with common goods. By responding to the needs of consumers and the expectations of their employees, they are transforming themselves, encouraged by the global context, against a backdrop of climate and health crises. Thus, they benefit from an unprecedented alignment of the planets. Finance, governance and wealth sharing should follow.


Who's the boss? All markers seem to be green, to answer with the eponymous SME, that today it is the consumer! Created by Nicolas Chabanne and Laurent Pasquier in 2016 in the agri-food sector, the brand offers consumers to take back their purchases in hand in support of producers, and it works! The collective society (SCIC) was created in January 2017 and sells milk, butter, apple juice, etc. "Here's a company that manages to take market share to the point of making the large-scale distribution move," enthuses Jean-Noël Felli(1), CEO of Balthazar, an expert in transformation strategy.


Who's the boss? (CQLP), growing by 14% in 2020, today has more than 16 million consumers and supports 3,000 families of producers


Reasoned growth

" The demands of citizens, consumers and employees, regarding the role of the company and its usefulness for society are increasing ", notes Emery Jacquillat, President of the Community of Companies with a Mission. This pressure plays in favor of a commitment from economic actors.

Adopted in 2019, the Pacte law has provided a legislative and structuring framework by instituting the status of mission-driven company and by providing that the company's raison d'être must be written into its articles of association. It has thus contributed to accelerate the movement. Henceforth, a company must no longer be managed "in the common interest of the partners", but "in its social interest, taking into account the social and environmental challenges of its activity".


The present context, with the health crisis, reinforces this. To the question "What is the purpose of companies?" asked by the Institut de l'entreprise(2), the French answer by giving them a clear roadmap, convinced that companies have the power to make the world better. Companies should therefore give meaning to their actions in order to develop. The ones that have mobilized are ahead of the game.


Business for good seems to be synonymous with growth. However, it also raises the question of limits. "Without advocating 'small is beautiful', it is legitimate to question a model of reasoned growth," says Jean Moreau, co-chairman of the Impact France Movement (formerly Mouves).

A new generation of entrepreneurs is emerging who are trying to dust off business, without donning the clothes of alterglobalists. Positive-impact companies are claiming an assumed growth. " We still lack beautiful stories to tell because money is culturally taboo in France, but we are militating for an uninhibited growth. We want to see companies break through the barrier to show that an alternative is really possible," says Jean Moreau.


Operational mission

Today, several signs show that something is happening. "We might have thought that the Pact law would influence large companies, but SMEs and ETIs are taking this turn. We are therefore being asked to support them in the operationalization of their raison d'être," says Clément Reyne, a partner at Wemean (communications consulting).

Among the many prizes awarded to companies, that of Women Equity, a ranking of growth SMEs / ETIs run by women, is particularly demanding in this area and is very interested in impact. "We like to highlight companies that present interesting profiles in terms of overall performance, both financially and economically, and in terms of impact. And this is done broadly, with special consideration given to efforts by companies whose primary reason for being is not impact. This year, we are seeing a breakthrough of companies that have integrated the energy transition into their strategy, accelerated the digitalization of their activities, while asking themselves the question of their responsibility and playing the game of general interest," says Dunya Bouhacene, President of Women Equity. As a reminder, the winners have an average turnover of 31.5 million euros, with a growth of +30% in 2019, more than half of them are present internationally. In 2020, an atypical year if ever there was one, these managers have stayed the course and even improved their margins while increasing their workforce by +10%.


Alignment of the planets

Several factors are working in favor of impact boxes. "Funding is available for credible projects and talent wants to join these companies," summarizes Jean Moreau. It seems that we are witnessing an unprecedented alignment of the planets.


At the level of investment funds, a paradigm shift is underway. It' not by chance that Larry Fink, chairman of BlackRock, the world's largest pension fund, says in his annual letter to investors in 2018: "Companies that honor their mission and responsibilities to their stakeholders reap long-term benefits. Stating, "To thrive over time, any company must not only produce financial results, but also demonstrate how it makes a positive contribution to society." In their approach, "investors are taking into account more and more the social, environmental and governance issues of the companies they own," comments Jean-Noël Felli.


The Covid-19 crisis is serving as a gas pedal. "Green and SRI (socially responsible investment) funds are currently the most in demand, the money is available," says Jean-Noël Felli. In full expansion in 2020, the French responsible investment market has 245 additional funds and reached 461 billion euros as of December 31, 2020 according to Novethic, the responsible investment market observatory (i.e. +66% compared to the previous year).


Moreover, adds Jean-Noël Felli, "a BlackRock study published in May 2020 shows that the most responsible companies are also those most resilient to the crisis. The reason of being promises to be a superb lever for growth as the crisis ends. Provided that governance puts in place the mechanisms to ensure that the company stays on course. It is up to companies to define their monitoring bodies. The Pacte law has instituted the mission committee, which must include at least one employee for companies with more than 250 employees. The others must equip themselves with safeguards to avoid giving in to the sirens of short-termism. The entities that succeed in combining impact and growth remain focused on the meaning of their commitment.


Colp, for example, is committed to fair and stable remuneration for producers, enabling them to offer quality, good and responsible products at prices affordable to all. Its success is based on the strength of the community. The SME has given up all advertising budgets and sales forces. "The mission involves a certain amount of renunciation and chiseling of the offer," says Emery Jacquillat. And he knows what he is talking about. As president of Camif, he distinguished himself from his competitors a few years ago by refusing to participate in Black Friday and assuming the loss of sales. Better yet, Camif is keeping certain products out of its catalog in favor of a 100% European offer. Short-term objectives must not cloud the long-term plan.

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