Report for the year 2015 - fdir.idei.frfdir.idei.fr/wp-content/uploads/2011/02/Report_2015.pdf ·...

Reportfortheyear2015

Reportfortheyear2015

ChaireFinanceDurableetInvestissementResponsable Reportfortheyear2015

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TheresearchprojectsoftheChaireFDIRarerunbytheIDEI-ToulouseSchoolofEconomicsandtheEconomicsdepartmentatEcolePolytechnique.AttheinitiativeoftheAFG,theChaireFDIRismadepossiblefor2015thankstothefinancialsupportofthefollowing11members:

AllianzGIFrance

Amundi

Caissedesdépôts

Candriam

EcofiInvestissements

EdmonddeRothschildAM

FondsdeRéservepourlesRetraites(FRR)

GroupamaAM

HSBCGlobalAM(France)

LaBanquePostaleAM

NeuflizeOBCInvestissements


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Tableofcontents

AgendaforthemeetingoftheScientificCommitteeoftheChairep.5

Researchteam p.7

MainResearchachievements p.8

JeanTiroleandChristianGollier’sviewontheCP21(inFrench) p.14

Researchprojects2016-2018 p.19

Mainresearchprojects’scorecard p.24

Publicationsandworkingpapers p.26

CommunicationoftheChaireFDIRachievements p.28

EducationandtrainingrelatedtotheChaireFDIR p.32


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Agendaforthemeetingofthe

ScientificCommitteeoftheChaireFDIR

February15,20161.Approbationofthe2015annualreport2.Researchachievementsandprojects3.Miscellaneous

******

Ordredujourdelaréunion

DuComitéScientifiquedelaChaireFDIR

15février20161.Approbationdurapportannuel20152.Réalisationsetprogrammederecherche3.Divers


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ResearchteamPatriciaCrifo,EcolePolytechnique&U.ParisWest(Chairco-director)SébastienPouget,IDEI&ToulouseSchoolofEconomics(Chairco-director)StefanAmbec,IDEI&ToulouseSchoolofEconomicsMarianneAndries,IDEI&ToulouseSchoolofEconomicsBrunoBiais,IDEI&ToulouseSchoolofEconomicsMiloBianchi,IDEI&ToulouseSchoolofEconomicsCatherineCasamatta,IDEI&ToulouseSchoolofEconomicsEdouardChalle,CNRS&EcolePolytechniqueVaninaForget,Ministèredel’AgricultureetEcolePolytechniqueOlivierGodard,CNRS&EcolePolytechniqueChristianGollier,IDEI&ToulouseSchoolofEconomicsEricGiraud-Heraud,INRAParis&EcolePolytechniqueAugustinLandier,IDEI&ToulouseSchoolofEconomicsThomasMariotti,IDEI&&ToulouseSchoolofEconomicsNicolasMottis,EcolePolytechnique&EssecGuyMeunier,INRAParis&EcolePolytechniqueJean-PierrePonssard,CNRS&EcolePolytechniqueSylvainePoret,INRAParis&EcolePolytechniqueJean-CharlesRochet,IDEI&&ToulouseSchoolofEconomicsSilviaRossetto,IDEI&&ToulouseSchoolofEconomicsBernardSinclairDesgagné,HECMontréal&EcolePolytechniqueSabrinaTeyssier,INRAParis&EcolePolytechniqueJeanTirole,IDEI&ToulouseSchoolofEconomicsNicolasTreich,IDEI&ToulouseSchoolofEconomics

Doctoralandpost-doctoralstudentsThomasAndré,SchneiderElectric&EcolePolytechniqueLiviuAndronic,IDEI&ToulouseSchoolofEconomicsElenaEscrigOlmedo,UniversiteJaumeI&EcolePolytechniqueMadalenaFerrana,IDEI&ToulouseSchoolofEconomicsAymericGuidoux,EcolePolytechniqueYannKervinio,IDEI&ToulouseSchoolofEconomicsYvesLeYaouanq,IDEI&ToulouseSchoolofEconomicsRimOueghlissi,U.Evry&EcolePolytechniqueGwenaelRoudaut,EcolePolytechniqueYutingYang,IDEI&ToulouseSchoolofEconomics


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MainResearchAchievements

The research Chair on Sustainable Finance and Responsible Investment («ChaireFinanceDurableet InvestissementResponsable»,orChaireFDIR)was launchedin2007,atthe initiative of the French AssetManagement Association AFG, by ChristianGollier fromToulouseSchoolofEconomics-IDEIandJean-PierrePonssardfromEcolePolytechnique.TheinaugurallecturewasgivenbyJeanTirole,the2014recipientoftheSverigesRiksbankPrizein Economic Sciences inMemory of Alfred Nobel and a prolific contributor to the Chairesinceitsinception.

Nowco-directedby SébastienPouget fromToulouse School of Economics-IDEI andPatricia Crifo fromEcolePolytechnique, Chaire FDIRhasbeen running for nine yearswithabout twenty internationally renowned scholars and has produced numerous scientificcontributionstoourunderstandingofresponsiblefinance.Thetablebelowsummarizesthemain figures about Chaire FDIR, andmore detailed information about its achievements isprovidedthereafter.

TheChaireFDIRinafewnumbers

TheChaire ->Startedin2007->20+researchers-> 2 academic institutions: Toulouse School of Economics-IDEI and EcolePolytechnique->10+patners:AssociationFrançaisedelaGestionFinancière(AFG),AllianzGlobalInvestors France, Amundi, Caisse des dépôts, Candriam, Ecofi Investissements,Edmond de Rothschild AM, Fonds de Réserve pour les Retraites, GroupamaAM,HSBCGlobalAM(France),LaBanquePostaleAM,NeuflizeOBCInvestissements

Research ->4fieldsofpracticalimplications(moreinformationofferedisbelow):• Long-termriskvaluation• DesignandmarketingofSRIfunds• Governance,CSRandfinancialperformance• Engagementanddialogue

->16+academicworkshopswithpartners->10+bilateralscientificmeetingswithpartners->100+scientificstudiespublished->100+presentationsinscientificconferences->3booksonresponsiblefinance->7scientificconferencesorganized

Teaching ->15+PhDstudents->10+courseseveryyearonresponsiblefinancetopics(MasterLevel)

Visibility -> 18+ articles in popular press (Le Monde, Les Echos, La Tribune, Libération,FinancialTimes,L’opinion)->3BestPhDThesisawardsfromFIR-PRI->1NobelprizeinEconomicScienceforJeanTirole->1PeaceNobelprizeforChristianGollierasamemberoftheIPCC->2BestYoungEconomistnominationsforPatriciaCrifoandEdouardChalle->1nominationasChevalierdel’OrdreNationalduMériteforPatriciaCrifo->1nominationasChevalierdel’OrdredesPalmesAcadémiquesforS.Pouget->1BestPaperawardforSébastienPougetfromEIF->2Cahiersdel’InstitutLouisBachelierdedicatedtotheChaireFDIR


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Intermsofresearch,themaincontributionsoftheChairepertainto1)theevaluation

of distant and uncertain events such as climate change; 2) investors’ motivation forresponsible investments; 3) the links between firm governance, CSR and financialperformance;and4)issuesrelatedtoshareholders’engagement.1.Evaluatingdistantanduncertainevents

Investorsdeterminethevalueofinvestmentprojectsbyestimatingtheirfuturecashflowsbasedonfinancialandextra-financialanalysts’insightsregardingthematerializationoffuturebusinessopportunitiesandrisks.Standardeconomic toolsprescribepenalizingcashflows that arise in goodeconomic conditionsmoreoften than in bad (becausediversifiedinvestorsarealreadywealthyingoodconditions)andinthedistantfuture(becausepeopleare ingeneral impatientandbecausepeople inthefutureareexpectedtobemuchricherthan today thanks to economic growth). The penalty manifests itself in the form of adiscountratethatislargeforriskyprojectsandforprojectsthatpayfurtherintothefuture.Asaresult,thevalueofsuchprojectsisviewedaslow.

Thisstandardvaluationframeworkisrelevanttovalueprojectsrelatedtosustainabledevelopment. Indeed, these projects are deemed to avoid the negative consequences ofvariousglobal riskssuchasclimatechange,nuclearaccidents,biodiversitydestructionandGMOhealth impacts.Since it is likely thatsuchriskswillbeassociatedwithbadeconomicconditions, sustainable development projects should benefit from a low interest rate andthusfromahighvalueanddesirability.

However,because thecash flowsof theseprojectsareviewed tooccuronly in thevery long run, they are often penalized by very high discount rates (WilliamD.Nordhausprescribes4%)andthusprettylowvalues.TheresearchoftheChaireFDIRhasshownthatsuch a high penalty imposed on long-term projects might not be warranted due todifficultiesinquantifyingtherisks,uncertaintyinfuturegrowthrates,tocomplementaritiesbetweenenvironmentalandstandardgoods,andtolearningbyagentsregardingthefutureimpactoftheseprojects.

Thesescientificcontributionshavehadanimpactinpractice.Indeed,theresearchersoftheChaireFDIRhaveparticipatedinvariousgroupsthatwereinchargeoforientingpublicpolicies. For example, the Chaire FDIR recommends a 2% discount rate for discountinglong-termprojects.

ResearchersoftheChaireFDIRhavealsostudiedtheinfluenceofacountry’sextra-financialperformanceontheirsovereignbondspreads.Sovereignbondspreadsreflectbothaneconomicdefaultriskandastrategicdefaultrisk.Acountry’sextra-financialperformancecanreducebothtypesofdefaultriskbyimprovingfuturemacroeconomicprospectsandbysignalinggoodcommitmentabilities.

Results of the Chaire FDIR show that a country’s average cost of capital decreaseswith itsenvironmental, social andgovernance (ESG)performance.This result is validbothforOECDandemergingcountries.Thisresearchhas implicationsforportfoliomanagers. ItshowsthatESGfactorsareusefultobetterassesstheexpectedreturnsofsovereigndebt.It also suggests that dynamic asset allocation policies that anticipate changes in ESGperformanceofcountriescanbebeneficialforinvestors.


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2.Motivationsforresponsibleinvestments

Researchers of the Chaire FDIR have also shed some light on the complex mix ofinterdependentmotivationsthatunderliesthedemandforsociallyresponsibleinvestments(SRI).First,investinginSRIfundsmaybedrivenbyintrinsicaltruism:tovaryingdegrees,weallaspiretodogoodandhelp.ItthusappearsimportantforSRIproductstoclearlyidentifywhatistheirimpactonsocialandenvironmentalissues.

Second,material incentivesmayalsobeimportant:peopletendtocontributemoretopublicgoodswhencontributionsaretax-deductible. Inthis logic, investorswillbemorelikelytoinvestinSRIfundsiftheirfinancialperformanceisnotatoddcomparedtotheoneoftraditional funds.Theseresultssuggestthatthedemand forSRI fundswill increase,asthe information concerning their performance will gradually be disseminated amonginvestors.

Third,investorsmayalsobedrivenbysocialimageconcerns.AnincreaseincoverageandattentiontoSRImight frequently remindusofvarious issues thatwewouldprefer toignore such as poverty or climate change. In turn, these reminders of sustainabledevelopmentissuesmayincreasethedemandforSRIfunds. TheresearchoftheChaireFDIRhasalsoidentifiedtwopotentialnegativeimpactsofexploiting social- and self-image motives to spur SRI. On the one hand, the efficacy ofpublicizing someone’s given pro-social behaviormight be self-defeating. Atonepoint, itbecomesnormaltoadoptsuchbehaviorandnobodygetscreditintermsofimageanymore.Ontheotherhand,pro-socialintentionsmightbedirectedtowardsmorevisibleandsalientchoicessuchasbuyingahybridcarbutlesstowardslessglamourchoices,suchasbuyingSRIproducts.Tomitigatethispotentialnegativeimpactofimageconcern,SRIshouldbemademorevisible,clearerandassociatedwithvividexamplesofimpact.

This line of researchof theChaire FDIRhas also involvedpractitioners thanks to alarge-scalefieldexperimentimplementedincollaborationwiththreedifferentretailbankingnetworks. The idea was to empirically test the impact of various psychological andsituational factors on the demand for SRI products. A total of 3,104 clients haveparticipatedintheexperiment,thusprovidingalargesourceofrelevantdata.

Theresultssuggestthatonly11%ofindividualsarereluctanttoSRI.Thelikelihoodtoinvest inSRI increaseswiththeperceivedimpactandwith individuals’perceivedindividualeffectiveness at influencing environmental and social issues. In the experiment, theproportion ofmoney invested in the SRI fund appears 40% higher than the proportioninvestedintheotherwiseidenticalconventionalfund.3.Thelinksbetweengovernance,CSRandfinancialperformance

Researchers of the Chaire FDIR have provided novel results on the relationshipbetween corporate governance (CG), corporate social responsibility (CSR) and financialperformance.

A first set of contributions focus on the puzzling links between CSR and financialperformance. First, considering the largest European capitalizations, the research of theChaire has shed light on the apparent lack of consensus in the academic literature byuncoveringadoublephenomenon:firmswhich simultaneouslyadopt someCSRpractices


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thatarerelativecomplements(e.g.humanresourcesandbusinessbehaviors)exhibithighperformance, while firms which simultaneously adopt CSR practices that are relativesubstitutes (environmental and business behaviors) exhibit low performance. Second,basedonanoriginal field framedexperimenton theprivateequity industry, the researchhasalsohighlightedthatfirmswouldhavemoretolosefromirresponsiblepoliciesthantogain from responsibleones. In fact,while irresponsiblepolicieswoulddecreasefirmstockpricebyabout11%,10%and15%forE,SandGissuesrespectively,responsiblepoliciestendtoincreasefirmstockpricebyonly5%,5.5%and2%forE,SandGissuesrespectively.

A second set of contributions has examined the relationship between governance,board independence and firm performance. Most OECD countries, whatever their legalorigins,stronglysupport independenceasawaytoreduceagencycostsandasastandardresponse to corporate crises in order to provide greater transparency. Along this view,independent directors would act as “watch dogs” on behalf of dispersed shareholders,enhancingtherebythedisciplinaryroleoftheboard.

In this context,a first resultobtainedby theChaire’s researchers is todocumentarobustnegativerelationshipbetweenfirmaccountingperformanceandtheproportionofindependent directors, suggesting (unexpected) flaws in promoting independent boardsthatcouldoffsetthelikelybenefitsofreducedagencycosts.Independentdirectorsmayinfactsufferfromaninformationalgapthatimpedestheirabilitytomonitorand/orserveasa source of advice and counsel for corporate executives, with a detrimental effect onoverall firm performance. This second result suggests that the negative relationshipobservedisatleasttosomeextentduetothepositionoftheindependentdirector(andnotonlytothepersonhimselforherself).Takentogether,theseresultsshowthatintheFrenchinstitutionalandlegalenvironment,thecostsofindependenceseemtooutweighitsbenefitsoverthelastdecade.

AnotherprojectonthecompositionofboardsofdirectorshasexaminedthewaytheFrenchboard-levelgenderquota,enactedin2011,has impactedcorporategovernanceforlistedcompaniesbelongingtotheSBF120 indexoverthe2006-2014period. Itshowsthatthequotasucceeded inopeningthedoorsof theboardroomtonewfemaledirectors,notpresent on the director labour market before the regulation. However these directorspresent distinctive characteristics (in terms of experience, age, nationality etc.) which,combined with the companies choices to allocate directors to positions inside theboardroom, make them less likely to enter the most strategic committees (monitoringcommittees).Andasaconsequence, in termsof compensationand fees, thegender feesgapthatfemaledirectorsarefacinghasincreasedwiththequotatoreach6%.

In future work, we would like to further investigate the directors role throughindividualfeesanddecomposethelatterdependingonthedirectors’positions(committees’membership and chairing) and individual attributes (tenure and age). This would allowexamining directors’ compensation in a new perspective, investigating the economicdeterminantsofthedirectorfeesgap.

A lastproject in this topic aimsatunderstandingwhat characteristicsofsmall and

mid cap companies may offer them the long-term view and commitment necessary tosuccessfully implement innovative ESG strategies, and how these affect theirperformances.TheprojectfocusesonFrenchsmall-midcapcompanies.

Data come fromvarious sources. Firms’ ESGperformance is obtained thanks to anagreementwithVigeo.133firmsarecoveredfortheFrenchstockmarket,includingthe40


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large-caps that constitute the CAC 40 index.We keep these large firms as a benchmark.Accounting informationcomes fromthedatabase Infinancial.ThedatabaseFactSetdetailstheholdingsofinstitutionalshareholders.StockmarketdatacomefromDatastream.ThreeadditionaldatabasesareusedtoidentifythenamesoftheCEOandthepercentageofsharesheldbyfounder’sfamilies.Aftermergingandcleaningthesedatabases,wehaveatotalof100non-financialfirms.

Thesedataareusedtorunvariousregressionstostudyhowabnormalreturns,stockprice volatility, return on asset, depend on ESG performance and on firms characteristicssuchas the fact thatacompany isa family firmora firmunderLBO.Wealsoperformanevent study to examine the stock market reaction to changes in the level of ESGperformanceofsmallandmid-capcompanies.

Preliminary results suggest thatFrenchsmallandmid-capcompanies thatdisplaythe best social responsibility benefit from a lower cost of capital. This is the case aftercontrolling for the three Fama-French risk factors. This result is in line with the previousliterature(BauerandHann,2010,Bauer,Derwall,Hann,2009,Chava,2014).Itsuggeststhatcapital providers are requiring lower returns to hold the responsible small-mid capcompanies.Suchalowercostofcapitalmayfavorabetterdevelopmentofresponsiblesmallandmid-capcompanies.

Goodnews regarding the social responsibility of small andmid cap companies isassociatedwithanincreaseinthestockprice,controllingforgeneralmarketmovements.This impliesthatportfoliomanagementstrategiesbasedonESGinformationmaygenerateabnormalreturnsiftheyareabletoanticipatethefutureevolutionoftheESGperformanceoffirms.

The determinants of ESG performance in small and mid cap companies seemrelatedtothetypeofownership.FirmsownedbytheirfounderappeartohavealowerESGperformancethanotherfirms.Thismightbeduetothefactthatfoundersarecharismaticenoughnot to have to cater to the various firms’ stakeholders in order to ensure a gooddevelopment.Also,wefindthatfirmsthatareheldmorebyfundmanagementcompaniesdisplayahigherESGperformanceexceptifthefirmsareunderLBO(asmeasuredbyalargeamountofdebtintheirbalancesheet).

In futurework,wewould like to extend the cross-section of firms included in oursample and potentially include European corporations. As of now, we measure ESGperformanceusingVigeoratingsthatcoveraround130Frenchfirms.Wearethuseagertoreceive support to find other sources of information regarding the ESG performance ofFrenchandEuropeanfirms.4.Shareholderengagementanddialogue

Researchers of the Chaire FDIR have designed an investment strategy based onengagement and dialoguewith businesses: the “WashingMachine” investment strategy.The idea is to invest in non-responsible and therefore undervalued companies, to startimprovingtheirsocialresponsibility,andtoresellpartofthestakesatapremiumtoothersociallyresponsibleinvestors.

Threeconditionsmustbesatisfiedforthisstrategytosucceed.First,theinvestmentfundmust be able toacquire a significant influence on the target companies.Otherwisetheywouldnotbeinapositiontoimplementthechangesenvisioned.Furthermore,onlyafundwithalong-termoutlookcanimplementthestrategy.Indeed,thefundmustbeable


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tocrediblycommit toremain involved in thebusiness longenoughfor itscorporatesocialresponsibility to improve. Last, the fund itself must be able to provide guarantees ofcredibilitywithregardtosociallyresponsibleorientations.Otherwise,itwillfailtoconvincethemarketof therealityof thecommitmentsmadebythecompany.When implementingthe “Washing Machine” strategy as a coordinated engagement policy, funds shouldadequatelymanagetheriskofconcertedaction. ThisresearchfromtheChaireFDIRhasfoundanechointhepracticeofresponsibleinvestments.Indeed,TauInvestmentManagementhaslaunchedafundinNewYorkin2015with a strategy in linewith the “Washingmachine”. Also, a Financial Times’ news articlewrittenbyJonathanEleyonFebruary20th,2015,qualifiesthe“Washingmachine”strategyasparticularlysuitedfor“reallybiginvestorssuchasNorway’ssovereignwealthfundorbigNorthAmericanretirementfundslikeCalpers.”

Finally, responsible investors are confronted to specific engagement strategies inmultinationals operating on emergingmarkets. One of them relates to« Bottom of thePyramid»(BOP)strategies(sellingproductstargetedatlowincomepopulations,especiallyin emerging countries), suggesting that multinational firms may make revenues whilealleviating poverty. Such a BOP concept has received a lot of attention recently but stillneeds theoretical foundations and empirical validity. The researchers of the Chaire FDIRhave studied several firms’ projects within the BOP markets, highlighting the capacitiesnecessarytosucceedtogetherwiththelearningandinnovationchallengesposedbysuchstrategies.


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JeanTiroleandChristianGollier’sviewontheCOP21AvantlaCOP21:

PourunaccordefficacesurleclimatCetarticleainitialementétépubliédansLeMondeetdansTheEconomist

En décembre, Paris accueillera des négociationsdécisives pour le changement climatique.LesdéléguésdesNationsUniesdevrontparvenir à un accord contraignantpermettantdelimiterà2°Cl’augmentationdelatempératuremondiale.L’analyseéconomiquepeutnouspermettred’identifierlesstratégieslesplusefficaces.Lechangementclimatiquerelèvedelagestiond’un«biencommun»àl’échellemondiale.Along terme, l’humanité bénéficieraitmassivement d’une coopération internationale sur leclimat;malheureusement,chaquepaysestfortementincitéàlaisserauxautreslachargederéduirelesémissionsdegazàeffetdeserre.L’approche consensuelle chez les économistes pour résoudre ce problème de « passagerclandestin»consisteàimposerunprixuniformesurlesémissions.Unetellestratégieincitelespollueursàengager tous leseffortsde réductiondesémissionsdont les coûts sontendeçàdeceprix.Ellegarantità lacollectivitéque lebénéficeenvironnementalestmaximalpourunsacrificecollectifdonné.Bienquecetteapprocheaitfaitsespreuvesdanslepassépourrésoudred’autresquestionsenvironnementales,ellerestedifficileàfaireaccepter:lorsdelaconférencedeCopenhaguede2009,l’idéed’unprixmondialducarboneaétéabandonnée,etlaconvention-cadresurlechangementclimatiquedel’ONUs’esttransforméeenunechambred’enregistrementdepromessesd’effortsàvenirpourluttercontreleréchauffement.CoursedelenteurCemécanismed’engagementsvolontairesseracertainementconfirméàParisalorsqu’ilselimitepourchaquepaysàindiquerdesengagementsnoncontraignants,sansmêmeprévoiruneméthodecoordonnéepourenmesurerlamiseenœuvre.La stratégie d’engagements volontaires est largement insuffisante. Elle n’a pas l’efficacitééconomiquequeprocurelafixationd’unprixuniqueducarbone.Enoutre,l’absencedetoutengagementcontraignantlimitesacrédibilité.A Paris, les pays auront tout intérêt à faire en sorte que leurs engagements soientdifficilement comparables entre eux et impossibles à vérifier, ce qui leur permettra derevenir facilement sur leurs promesses. Enfin, ce processus renforce les attitudes noncoopératives, car continuer à polluer permet de renforcer sa position dans les futuresnégociations.Lacoursedelenteurcontinue.Onpeut rêverd’unmondemeilleur.Une taxecarbone,prélevéeparchaquepays, sembleêtreunoutilbienplusefficace.Chaquenations’engageraitsurunprixambitieuxducarbonesitous lesautresenfaisaientautant.Afinderépondreauxpréoccupations liéesà l’équité,des transferts pourraient être établis en faveur depays endéveloppement ou réticents àrentrerdansunaccordglobal,parlebiaisduFondsvertpourleclimat,parexemple.Unsystèmedemarchédepermisd’émissionMalheureusement, un fonds vert est trop visible pour être politiquement acceptable : lesgouvernementsne souhaitentpasêtre«vus»en traindedonnerd’importantes sommesd’argentàdesétrangers. Enoutre,et surtout, lespayspeuventmettreenplaceune taxe


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carbonesansl’appliquerpleinementouenatténuantsoneffetpardessubventionsoudesallégementsfiscaux.Ilestdifficiled’imposerdel’extérieurunedisciplinefiscale,commeonapulevoirenGrèceavecla«troïka».Enrevanche,unsystèmeseconcentrantsurleniveaud’émissionnationaleestrelativementsimple,puisquelatechnologiepermetaujourd’huidesurveillerfacilementlesémissionsdeCO2d’unpays.Nous privilégions donc un système de marché de permis d’émission, dans lequel uneorganisationmultilatéraleattribueraitauxpaysparticipants,ouleurvendraitauxenchères,despermiséchangeables.Lesexemplesàtraverslemonde–auseindel’UnionEuropéennemais également en Californie, en Corée du Sud et dans certaines parties de la Chine –démontrent la faisabilité de cette solution et fournissent aujourd’hui des indicationsprécieusessurlameilleuremanièredelamettreenœuvre.Un tel marché permettrait de définir un prix du carbone unique au niveau mondial. Lesmesures de compensation en faveur des pays en voie de développement pourraient êtremisesenplacepardesimplesattributionsgratuitesdepermis.SanctionsCependant,mêmeencasd’obtentiond’unaccordadéquatsurlechangementclimatique,ilfaudra encore s’assurer de son application. Comme nous avons pu le constater avec lesengagementsduprotocoledeKyoto,ternirlaréputationd’unpaysquirevientsursaparolea un effet limité : celui-ci se trouvera toujours des excuses. Il n’existe aucune solutionmiracle, mais au moins deux mesures pourraient être utilisées contre les pays qui nerespectentpaslesaccordssignés.Tout d’abord, l’OrganisationMondiale du Commerce devrait traiter le refus demettre lemêmeprixquelesautressurlecarbonecommeunepratiquede«dumping»entraînantdessanctions.Deuxièmement, une insuffisance de permis à la fin de l’année serait valorisée au prix demarchéets’ajouteraitàladettepubliquedupaysconcerné.Danslemêmeesprit,lesEtatsnon signataires devraient être pénalisés par le biais de taxes prélevées aux frontières etgéréesparl’OMC.Il n’y a pas de solution idéale, mais l’actuelle stratégie fondée sur des engagementsvolontaires et non contraignants est vouée à l’échec, en favorisant l’attentisme.Une taxecarbonemondialeestunemeilleuresolution.Maislamiseenplaced’unmarchéd’émissionsnoussembleêtrelasolutionlapluspertinentedanslecadredesnégociationsencours.


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JeanTirole’sviewontheCOP21AprèslaCOP21:

Nousnesommesguèreplusavancésqu’ilyasixansCettetribuneainitialementétépubliéedansL’Opinion

Les faits - LaurentFabius, trèsému,a remissamedien findematinée laversion finaledel’accord sur le climat aux 195 représentants des pays participant à la COP21, le qualifiantd’«ambitieuxetéquilibré».Letexteaétéapprouvéenséanceplénièreenfindejournée.Dansunetribuneexclusivepourl’Opinion,JeanTirolejugequelesmoyensdecetteambitionaffichée à la COP21ne sontni assez précis, nià la hauteur des objectifs à atteindre. Ilsoulignenéanmoinsplusieurs«causesd’optimisme».

La COP 21 se devait de déboucher sur un accord efficace, juste et crédible.Missionaccomplie ?L’accordannoncéestambitieux.L’objectifàatteindreestmaintenant«bienendessousdes2°C»et lemondedevraitneplusproduired’émissiondegazàeffetdeserre(GES)ennetaprès2050 ;lesfondsdédiésauxpaysenvoiededéveloppementdépasserontaprès2020les100milliardsdedollarsparanquiavaientétédécidésàCopenhagueen2009.

Malheureusement,dans les faits, le compromisestbienendeçàde l’ambitionetnousnesommesguèreplusavancésqu’ilya6ans.

Question efficacité dans la lutte contre le réchauffement climatique, la tarification ducarbone, recommandée par la très grande majorité des économistes et de nombreuxdécideurs,mais chiffon rougepour leVenezuela et l’Arabie Saoudite, a étéenterrée dansl’indifférencegénéralepar lesnégociateurs,compromettantsérieusement laréalisationdel’objectifclimatique,commelenotelaFondationNicolasHulot.

Etpourtant, il fautunprixuniverselducarbonecompatibleavec l’objectifdes1,5ou2°C.Lespropositionsvisantdesprixdifférenciésselonlespaysnonseulementouvrentuneboîtede Pandore (qui paiera quoi ?) mais surtout ne sont pas écologiques. La croissance desémissionsviendradespaysémergentsetpauvres,etsous-tarifer lecarbonedanscespaysnepermettrapasd’atteindrel’objectif ;d’autantqu’unprixélevéducarbonedanslespaysdéveloppésencouragera la localisationdesproductionsémettricesdeGESdans lespaysàbasprixducarbone,annihilantainsileseffortsfaitsparlespaysriches.

Questionjustice,lespaysdéveloppésn’ontpasdétaillélescontributionsauxpaysenvoiededéveloppement(PVD)etontlaissétropdeplaceauvolontariat ;orlespromessescollectivesnesont jamaistenues. Il serait importantquecestransfertssoientspécifiésetconstituentdestransfertsadditionnels,etnonde l’aidedéjàexistanteredirigéeversdesprojetsverts,desprêtsoul’allocationderevenusincertains.

Et que dire de la crédibilité ? L’accord repousse à une date ultérieure un engagementconcret des pays à réduire leurs émissions. La stratégie attentiste des engagementsvolontaires de réduction des émissions (INDC) l’a emporté. Les engagements ne sont pascomparables, ils sont insuffisants, ils seraient coûteux s’ils étaient appliqués, et il y a fort


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àparier que, non contraignants, ils ne seront pas mis en œuvre de toute façon (lespromessesn’engageantqueceuxquilesécoutent).

Lanégociation sur la transparenceaelleaussiétéunéchec. Il estdifficiledecomprendrepourquoilespaysduSudneseraientpassoumisaumêmeprocessusdesuivi,notificationetvérification que les autres ; les pays duNord doivent être généreux, pas fermer les yeux.Enfin, l’idée que l’on adoptera une trajectoire plus vertueuse, par des révisions tous lescinqansdesambitions,ignorecequeleséconomistesappellentl’effetdecliquet :sommes-nous si sûrs qu’un pays se mettra à l’avenir en meilleure position de négociation enrespectant allègrement ses promesses plutôt qu’en «traînant la patte» ? On demandetoujoursplusaubonélève.

Trois échecs ? En fait un seul. Il est vain de chercher à obtenir des pays développés desengagementsambitieuxsurlefondsvert,sansquececinedéboucheencontrepartiesurunmécanismecapabled’atteindrelesobjectifsclimatiques.EtonnepeutdemanderauxpaysduSuddefaire leseffortsnécessairessansunecompensationcrédible.C’estunjeuquisejoueàdeux.

Ce tableau sombre ne devrait quand même pas occulter les causes d’optimisme. Toutd’abord, la prise de conscience dans les opinions publiques a progressé depuis quelquesannées. Ensuite, tous les pays présents à la COP21 ont présenté des trajectoires de leurpollution, contrairement à ce qui avait été fait à Kyoto en 1997 : c’est un progrèssymbolique.

Enfin,plusde40pays,etnondesmoindres(Etats-Unis,Chine,Europe...)ontaujourd’huidesmarchés de droits d’émission négociables, certes avec des plafonnements beaucoup tropgénéreuxetdoncdesprixducarbonetrèsbas,maisdémontrantleurvolontéd’utiliserunepolitique rationnellede lutte contre le réchauffement climatique.Cesboursesde carbonepourrontun jourêtre reliéesentreellespour formerunmarchémondialpluscohérentetplusefficace,mêmesilaquestiondes«tauxdechange»seraépineuse(ilfaudrasavoirsiundroitd’émettreunetonnedansunsystèmeéquivautaumêmedroitdansunautresystème.Lespayslesplusvertueux,ayantémismoinsdedroits,risqueraientalorsdesesentirlésés).Ilfaudraconstruiresurcesdynamiques.

S’il est important de maintenir un dialogue au niveau mondial, le processus onusien amontré ses très prédictibles limites. Négocier entre 195 nations est incroyablementcomplexe. Il faudraitarriveràcréerune«coalitionpourleclimat»,comprenantaudépartlesgrandspollueursactuelsetàvenir.Jenesaispass’ildoits’agirduG20oud’uncercleplusrestreint (par exemple, les cinq plus gros pollueurs, l’Europe, les Etats-Unis, la Chine, laRussieetl’Inde,représentant65%desémissionsmondiales).

Les membres de la coalition pèseraient sur l’Organisation mondiale du commerce, quipourraitalorsautoriser,pourcausededumpingenvironnemental,une taxeaux frontièresvis-à-visdespaysrefusantd’imposer leprixducarbonequipermettraderéaliser l’objectifclimatique.

Ilconvientenfindesimplifierlanégociationensériantcequiestsimpleetdoncdevraitêtreacté,etcequidevraitêtrelevraiobjetdelanégociation.Laluttecontreleréchauffement


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climatique n’est pas un problème économique («on sait faire»), mais un problèmegéopolitique.

Lesquestionsdifficiles,maisincontournables,sontcellesdurespectdesaccordset,encoreplus,destransfertsfinanciersentrepays.Arrêtonsdetournerautourdupot.


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Researchprojectsfor2016-2018AsdecidedonSeptember10th,2015,duringthegeneralassemblymeetingoftheAssociationFDIR,theresearchersoftheChaireFDIR inconjunctionwiththesponsorshavedefinedfivehigh-priorityresearchprojectsfortheyears2016-2018.TheseprojectsaretransversaltothemainresearchtopicslistedinthedocumentofFebruary2010.Theseprojectsarealsorelatedtothethreeprioritytopicsthathavebeendefinedinthe2014generalassemblymeetingandthatdealwithcorporategovernance,engagement,andtheopportunitiesandrisks in long-terminvestments.Thepreciseresearchprojectsarepresentedbelow.1.Howgovernanceaffectsfirmvalue–CoordinatedbySimoneSepe(IDEI-TSE)Overthepast20years,empiricalstudieshavegainedtremendousimportanceincorporategovernance discussions. These studies have largely supported the view that governancearrangementsprotectingdirectorsandmanagersfromremovalincreasetheroomformoralhazard by insulating insiders from beneficial disciplinary forces, reducing shareholder andfirm value. On this view, “good” (i.e., value-increasing) corporate governance is largelyunderstood today—in the legal academyaswell as the real corporateworld,bothat thenational and international level— as being about stronger shareholder rights. Instead,managerialprotectionfromshareholderremoval,commonlyreferredtoas“entrenchment”,epitomizes“bad”(i.e.,value-decreasing)corporategovernance.Thisprojectplanstostudythisviewinmoredepthbygatheringnewempiricalevidencethatenablestoevaluatetheresultsofpriorstudiesanddevelopanovel theoreticalaccountofwhatmattersincorporategovernance.Wearegatheringauniquedatasetthatcoversthirtyyearsof corporategovernance in theUS, from1978 to2008,and thatenables to identifygovernancearrangementsthatgrantdirectorsandmanagersprotectionfromremovalwiththe agreement of shareholders (i.e., “bilateral protection arrangements”) —such asstaggeredboardsandsupermajorityrequirementstomodifythecharter.Theideaisthentotest whether these bilateral arrangements increase firm value. The data also enables toidentifyprotectivearrangementsthatdonotrequireshareholderapproval (i.e.,“unilateralprotectionarrangements”)—suchaspoisonpillsandgoldenparachutes—.Theideawouldthenbetotestwhetherthesearrangementsreducefirmvalue.Thelogicunderlyingthesetestsisthatunilateralprotectionarrangementsareindicativeofbad governancebecause their “dictatorial” naturemakes itmore likely thatmoral hazardmotivates their adoption, to the detriment of shareholders. On the other hand, bilateralprotection arrangements appear as consistent with best governance practices because itmay be in the shareholders’ own interest to limit their rights, if such limits involve abeneficial bilateral commitment by boards and shareholders to corporate stability andlonger-terminvestmentstrategies.


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2.InstitutionalInvestorsasActiveOwner–CoordinatedbySébastienPouget(IDEI-TSE)Theobjectiveofthisprojectistoempiricallystudywhyandhowinstitutionalinvestors,assetowners andmanagers, vote during shareholdermeetings. Separation between ownershipand control is one of the fundamental characteristics of modern companies (Berle andMeans,1932).This separationopens the roomforpotential conflictsof interestsbetweeninvestorsandcorporateexecutives(JensenandMeckling,1976):managersmaynotalwaysfavorthestrategiesthatarebestforinvestors.Tomitigatethenegativeeffectsoftheseconflicts,investorscaninduceexecutivestofollowtheirguidancebyengagingcompanies, i.e.,discussingwithexecutivemanagersandboardmembers, filing shareholder proposals and obviously voting during shareholder generalmeetings.Apriori,managersknowbestwhatistherightcourseofbusinessforfirms.Butcompaniesmay generate externalities on society, and investors may care more about theseexternalities thanmanagers. Two basic arguments thenwarrant investors to be active inengagement. The first argument rests on the universal owner logic (Mattison, Trevitt andVan Ast, 2011). Large institutional investors own a significant share in virtually all listedcompaniesandhavealonghorizon.Thesituationisverydifferentforcorporateexecutiveswho, for the sake of incentives, in general own concentrated stakes in their companies.Thesedifferentholdingprofilesgenerateconflictsof interests:executivesarenotgoing tointernalize the effects that their companies have on the payoffs and value of othercompanies.Forexample,theymaynottakeintoaccountthenegativeeconomicimpactthatthe polluting activities of their firm have on other companies. On the other hand,institutional investors that own verydiversifiedportfolioswould like the firm to take intoaccountthesenegativeeffectstoavoiddeterioratingtheoverallvalueoftheirportfolios.Asecondargumentthatcallsforinstitutionalinvestorstobeactiveinengagementisrelatedtothedelegatedphilanthropylogic(BenabouandTirole,2010).Institutionalinvestorssuchas pension funds, sovereign funds andmutual funds invest on behalf of clientswhomayhavepreferencesregardingexternalitiesthatdifferfromtheonesofexecutivemanagers.Asaresult, investorsmightwanttopromotetheirvaluesandpreferencestowardsexecutivesso that they choose theappropriate courseofaction.Onecan forexample think that thelevelofglobal risk inducedbya firm(relatedtoclimatechange,nuclearactivities…)mightnotbevaluedinthesamemannerbymanagersandbytheinvestorswhorepresentclients.Investorsmaythuswanttocommunicatecorporateexecutiveswhatistheirpreferredlevelofprecaution.Thiscanonlybeachievedviaengagement.Thisprojectplanstocollectdataonvotingpoliciesofvariousinstitutionalinvestorsinordertostudyhowtheirengagement/votingpolicy is implemented inpractice.Recentempiricalevidencesuggeststhatuniversalownersdohaveanimpactonthefirmsintheirportfolios(Dimson,Karakas,andLi,2014,Azar,Schmalz,andTecu,2014,Kempf,Manconi,andSpalt,2014, and He and Huang, 2014). However, the precise mechanism through which theyexercise their influence has not yet been empirically identified. Our idea is thus to testwhether institutional investorsaremoreactivelyengagingfirminareasthataresubjectto


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externalities, and to testwhether various investors have different preferences over theseissues.3. ESG factors and the performance of small andmid cap companies – Coordinated bySébastienPouget(IDEI-TSE)Thisprojectproposesanempirical investigationofsmallandmidcapcompanies’strategicbehaviorregardingEnvironmental,SocialandGovernance(ESG)factors,andaimsattestinghow it affects their risk-return profile on the stockmarket. There are several reasons tobelievethatsmallandmidcapcompaniesareverydifferentfrompubliclytradedlargecapsintermsofbusinessstrategies,inparticularregardingESGfactors.First, small andmid cap companies aremore likely than larger firms to be owned and/oroperated by their founder or by the founder’s family members (Adams, Almeida, andFerreira, 2005, andFahlenbrach (2005)). Thisprovides themwitha long-termviewand inturn a commitment power that can have valuable business consequences. For example,commitment power of executives and shareholders might enable small and mid capcompaniestoimplementinnovativehumanresourcesstrategies,i.e.providinginsurancetotheir employees in case of downturns or failures in order to increase their level ofimplicationorcreativity(SraerandThesmar,2007).Also,along-termhorizonmightenablethefirmtodevelopinnovativeenvironmentalstrategiesthatnecessitateeffortsintheshortrunbutarebeneficialinthelongrun(BenabouandTirole,2010).Second,evensmallandmidcapcompaniesthatarenotownedandmanagedbyfoundersortheir families could enjoy a high level of economic performance: the relative illiquidity ofsmallandmidcapequitymarketsprovidesstrongerincentivesforshareholderstomonitorandengagewithmanagement(Maug,1998).Thisprojectaimsatunderstandingwhatcharacteristicsofsmallandmidcapcompaniesmayoffer them the long-term view and commitment necessary to successfully implementinnovativeESGstrategies,andhowtheseaffecttheirperformances.Thisprojectwillrelyondataoncorporategovernance,corporatebehavior,accountingstatements,financialratios,andstockmarketperformanceforsmallandmidcapcompanies,aswellasdataontheirESGperformance. These data will be obtained from public sources, for example Point.Risk ofAltares, and from proprietary sources (after having signed appropriate confidentialitycontracts).4. The measurement of ESG performance and risk: qualitative ratings or quantitativemetrics?–CoordinatedbyPatriciaCrifo(Polytechnique)IntheCSR-financialperformanceliterature,manyscholarsstillconsiderthatmuchresearchneedstobeconductedbeforethisrelationshipcanbefullyunderstood(seee.g.Delmasetal.,2011;GriffinandMahon,1997;RowleyandBerman,2000;Surrocaetal.,2010). Fromthisperspective,thisprojectproposestoexaminehowdifferentcombinationsofCorporateSocialResponsibility(CSR)dimensionsaffectcorporateeconomicperformancewithdataon


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CSR performance, that is based on quantitative metrics of CSR related managementpractices rather than qualitative extra-financial evaluation through scores or ratings. AsemphasizedbyChatterjietal. (2009),extra-financial ratingsare rarelyevaluatedandhavebeencriticizedfortheirownlackoftransparency.Inthisproject,thequantitativemeasuresof CSR relatedmanagement practices that are used offer a novel approach by relying onactualpracticesimplementedbythefirms,ratherthanevaluations(scoresorratings)basedonpastand/orexpectedfutureCSRbehaviors.TheseCSRrelatedpracticesaremeasuredviatheCOIsurveyandtheENDDsurvey(fromINSEE)twolargescaledatabasesincludingmorethan10,000Frenchfirmsofmorethan10and500employeesin2006and2011.ThegoalofthisresearchistoanalyzehowdifferentcombinationsofCSRdimensionsaffectfirm performancemeasured by corporate profits. In particularwe investigate the quality-quantitytrade-offinthedesignofresponsibleESGstrategies.PreliminaryresultsshowthatanaggregatemeasureofCSR,whichcountsquantitativelythenumberofpracticesadoptedin termsofenvironmental, human resources, and customers& supplierspractices, affectspositivelyandsignificantlyfirmperformance.Butontheotherhand,theprofitabilityofCSRinvestments seems to rely on a specific qualitative mix of different CSR dimensions. Forinstance combining responsible green and customer & supplier strategies improve firmperformancemore than combining responsible social and customer& supplier strategies.HencetherelationshipbetweenCSRandfirmprofitability isverycomplex.This firstsetofresults will be further developed to analyze the links between CSR motivations(strategic/altruistic/defensive) and CSR commitment intensity, and their relationship withCSRactualpractices.TheinterestistodeterminewhichtypeofCSRmetricsbestcorrespondtodeclaredversusimplementedCSRpracticesandrisks.5. Sovereign credit ratings and interest rates – Coordinated by Patricia Crifo(Polytechnique)The use of a large number of variables (quantitative and qualitative) as determinants ofsovereigncreditratingsreflectssomehowtheambiguitysurroundingthecriteriaunderlyingsovereignratings.Theobjectiveofthisprojectistohelpbetterunderstandvariablesusedinthedeterminationofsovereigncreditratings.Ouranalysisbuildsonthepreviousliteraturebyexploring theuseofenvironmental, socialandgovernance (ESG) factorsasexplanatoryvariables.Themainquestionraised(andhypothesistested)isthefollowing:howmuchofanimpactdoESGquantitativeindicatorshaveonsovereigncreditratingsandinterestrates?Relatedtothis,ourprincipalchallengeishowtoquantifygovernmentESGperformance.TheESGperformanceofgovernmentsisdifficulttoassessforatleasttworeasons.Accordingtomanyobservers,itisoftenhardtoknowwhetherthegovernmentshouldbeevaluatedasageographicalentity(indicatorsbasedonitsESGfactors,i.e.forestresources,accesstowaterorCO2emissions),asademographicentity(indicatorsbasedonresultsthatdependonthepublic authority’s resources and therefore the nation’s wealth and development, e.g.illiteracy rate, life expectancy) or as a political institution (this raises the questionof howpolicy is judgedbasedon levelofdevelopment). Inaddition,there isnocleardefinitionofthemethodologyandthevalueappliedtoassesstheESGperformanceofgovernments.Thereality is that rating agencies and investment managers use a wide array of data fromdifferentofficialandrecognizedsources.


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Inthatregard,inordertooffertotheusersofESGanalysisamorestandardizedmethodto,wewill initially implementaPrincipalComponentAnalysis (PCA)to identifythenumberofquantitative criteria to be incorporated in ESG performance. This will also enable us toconstruct intermediate ESG indexes (including governance index, social index, populationand labor status index, land and biodiversity index and environmental index) aswell as aglobal ESG index. Then, we will examine the impact of ESG global index on the price ofsovereign risk as well as the joint implementation of the five intermediate ESG indexesmeasuredby the individual score (includinggovernancequality score, socialquality score,populationand laborstatusscore, landandbiodiversityscoreandenvironmentalpressurescore)andinteractiontermsoftherespectiveESGindicators.ThepriceofsovereignriskwillbetestedbyusingsovereigncreditratingsfromthetwoU.S.leadingagencies,StandardandPoors,theoldestproviderofsovereignratingssince1961,andMoodys,providingsovereignratings since 1974. The population of ratings usedwill be for the period from December1996 to December 2010. Our analysis will be carried out across 35 advanced economies(AEs)andemergingmarketeconomies(EMEs).


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Mainresearchprojects’scorecardThemes Projects AdvancementMotivationforSRI The recommendation of SRI funds:

HeimannandPougetValue similarity and trust in SRI funds:Heimann,Bonnefon,MulletandPougetIndividual Investors’motivation to investinSRI:Heimann,Bonnefon,andPouget

2workingpapers,5workshopandmeetingswithsponsors,

presentationsatconferences,1publication

SRIbondmarkets SRIandperformanceofbond funds -Doextra-financial ratings affect sovereignborrowingcost?:Crifo,Oueghlissi,DiayeSovereign bond spreads and extra-financial information - An empiricalanalysis of emerging markets: Berg,MargareticandPougetGreen sovereign debt and sustainabledevelopment:Ambec(withd’Albis)

3workingpapers,3workshopsandmeetingswithsponsors,

presentationsatconferences

Governance Board independence and operatingperformance: Challe, Crifo and Roudaut(withCavacoandReberioux)Board composition and extra financialperformance:CrifoandRoudautBonus culture - Competitive Pay,Screening, andMultitasking: Tirole (withBenabou)Governance and performance of small-and mid-cap companies: Jaballah andPougetCorporateGovernanceandRisk:Rossetto

6workingpapers,workshopswith

sponsors,presentationsatconferences,3publications

Engagement Thewashingmachine - Asset prices andcorporate behavior with sociallyresponsibleinvestors:GollierandPougetEngagement at general assemblymeetings:Andronic

2workingpapers,2workshopswith

sponsors,presentationsatconferences


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Shareholderengagementanddialogue:acase study: Crifo (with Escrig Olmedo),CrifoandMottis

CSR,performanceandSMEs

CSRandgovernancestructures:CrifoandRoudaut(withCavacoandReberioux)CSRandperformanceinSMEs:Crifo(withDiayeandPekovic)CSR and private equity: Crifo, TeyssierandForget;CrifoandForgetCSR, innovation and performance:Ponssard, Giraud-Heraud and SinclairDesgagné

4workingpapers,2workshopswith

sponsors,presentationinconferences,1

publication


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PublicationsandworkingpapersResearchersof theChaireFDIRhavewritten someof thesearticleswith researchers fromotherinstitutionslocatedbothinFranceandabroad.Adler M. and N. Treich, 2015, Prioritarianism and climate change, Environmental and

ResourceEconomics,62,279-308.AmbecS.andJ.Coria,2015,Strategicenvironmentalregulationofmultiplepollutants,TSE

WorkingPaper,n°15-602.Ambec S. and L. Ehlers, 2015, Regulation via the polluter-pays principle, forthcoming

EconomicJournal.AmbecS.andY.Kervinio,2015,Cooperativedecision-making for theprovisionofa locally

undesirablefacility,forthcomingSocialChoiceandWelfare.André, T., 2015,Managing Societal Performance of Impact Investing: An Action Research

Inquiry,CahierdeRecherchen°2015-14,DepartmentofEconomics,EcolePolytechniqueAndré,T.&PonssardJ.-P.,2015,ManagingBaseofthePyramidasaBusinessOpportunity:A

Longitudinal Field Study, Cahier de Recherche n° 2015-15, Department of Economics,EcolePolytechnique,

AndriesM.andV.Haddad,2015,InformationAversion,WorkingPaper.Andries M., T. Eisenbach, M. Schmalz, 2015, Asset Pricing with Horizon Dependent Risk

Aversion,WorkingPaper.AndriesM.,2015,SocialResponsibilityandAssetPrices:IsthereaRelation?,WorkingPaper.BecF.andC.Gollier,2015,Cyclicalityandtermstructureofvalue-at-riskwithinathreshold

autoregressionsetup,Bankers,Markets&Investors134,5-19.CavacoS.,CrifoP.2015.RSEetperformance.IRES,EtudeCFECGC.Challe,E.Chrétien,E.,2015,Marketcompositionandpriceinformativenessinalargemarket

withendogenousordertypes,JournalofEconomicTheory,158,679-696Challe, E. Chrétien, E., 2015, Market microstructure, information aggregation and

equilibriumuniquenessinaglobalgame,EcolepolytechniqueWorkingPaper2015-11Challe, E., Ragot, X. 2016, Precautionary saving over the business cycle, Economic Journal

(forthcoming)Challe,E.,Ragot,X.2015,Precautionarysavingandaggregatedemand,WorkingPaperCherbonnier F. and C. Gollier, 2015, Decreasing aversion under ambiguity, Journal of

EconomicTheory,157,606-623.Cremers J. M., L. Litov, and S. Sepe, 2015, Staggered Boards and Firm Value, Revisited,

WorkingPaper.Crifo P., Diaye MA., Oueghlissi R., Pekovic S. 2015. What drives firm’s Corporate Social

Responsibility:Theroleofownershipconcentration. inGlobalPerspectivesofCorporateSocial Action and Social and Financial Performance. Manos & Drori eds. Palgrave McMillan:NewYork.

Crifo P., Diaye MA., Pekovic, S. 2015. CSR related management practices and FirmPerformance: An Empirical Analysis of the Quantity-Quality Trade-off on French Data.InternationalJournalofProductionEconomics.doi:10.1016/j.ijpe.2014.12.019.

Crifo P., Escrig Olmedo E., G. Roudaut. 2015. Proposal quality : a good proxy for firm’sresponsiblebehaviorforinvestors?Workingpaper.


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Crifo P., Forget V., Teyssier S. 2015. The Price of Environmental, Social and GovernancePracticesDisclosure:Anexperimentwithprofessionalprivateequityinvestors.JournalofCorporateFinance.30:168-194.

Crifo P., Forget V. 2015. The Economics of Corporate Social Responsibility: A Firm LevelPerspectiveSurvey.JournalofEconomicSurveys.29(1):112–130.

CrifoP.,ForgetV.,2015.CapitalInvestissementetenjeuxESG,AnalyseFinancièren°56,p46-48,juillet-aoûtsept2015.

Crifo P., Reberioux A. 2015. Gouvernance et responsabilité sociétale des entreprises:nouvellefrontièredelafinancedurable?Revued’économieFinancière.117:205-223.

DhillonA.andS.Rossetto,2015,Ownershipstructure,Voting,andRisk,ReviewofFinancialStudies,pp.521-560.

Forget,V.2015.ImaynotbegreenbutIamhonest–OnGreenSignalingandLyingCostsinaLaboratoryEquityFinancingGame.Workingpaper.

Gollier C., 2015, Discounting, inequality and economic convergence, Journal ofEnvironmentalEconomicsandManagement,69,53-61.

GollierC.,2015, Long-termsavings:Thecaseof life insurance inFrance,FinancialStabilityReview,19,129-136.

Gollier C. and J. Tirole, 2015, Negotiating effective institutions against climate change,EconomicsofEnergyandEnvironmentalPolicy,4,5-27.

GollierC.,2015,Valuationofnaturalcapitalunderuncertainsubstitutability,WorkingPaper.GollierC.,2015,Evaluationoflong-datedassets:Theroleofparameteruncertainty,Working

Paper.Mottis,N.2015.FinanceetRSE,unpilotageàconstruire,Finance&Gestion,juil.2015,Vol.

331,p.910PoretS.2015.LabelsBattle:CompetitionbetweenNGOsasStandardSetters.WorkingpaperRoudaut,G., RebériouxA.2015.Genderquotainsidetheboardroom:Femaledirectorsas

newkeyplayers?CahierderechercheEcolePolytechniqueRoudaut,G.2015.DofirmmotivationsmatterforCSRawareness?WorkingpaperRoudaut,G.2015.Therepresentationofmanagers,shareholdersandstakeholders:does itmatter forCSRcommitment?WorkingpaperRheinbergerC.andN.Treich,2015,Attitudestowardcatastrophes,WorkingPaper.


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CommunicationoftheChaireFDIRachievements

TheadvancesmadebytheresearchersoftheChaireFDIRhavebeenpresentedtoawideaudienceincludingacademicresearchers,financepractitioners,andthegeneralpublic,both in France and abroad. The Chaire FDIR has been instrumental in allowing for thecreationoftheknowledgecommunicatedinthevariouseventsdescribedbelow.1.Vulgarizationofresearch

Anewissue,thethirdone,oftheCahiersdel’InstitutLouisBachelier focused on the contributions of the Chaire FDIRhasbeenpublishedin2015.The Cahiers presented articles by Jean Tirole, EdouardChalle, Patricia Crifo, and Sébastien Pouget. They coveredtopicsrelatedtoCorporateGovernance,theMotivationsfroSociallyResponsibleInvestments,SovereignBondsandESGfactors.AmorephilosophicalpiecebyJeanTiroleonEthicsandtheMarketwasoffered.

2.CommunicationtoacademicresearchersThe researchers of the Chaire FDIR have been invited to share their work and ideas invarious academic conferences and workshops. In their publications or during theirpresentations, the researchers always gratefully acknowledge the support of the ChaireFDIR.Examplesofacademicconferences

• BRICconferenceNYU,May2015(NewYork)

• SocietyforEconomicDynamicsconference,June2015(Warsaw)

• Conference of the Environmental Association of Environmental and Resource

Economists(EAERE),June2015(Helsinki)

• NBERSummerInstituteAssetPricing,July2015(Cambridge,USA)


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• LunchPolicySessiononClimateChange,WorldCongressoftheEconometricSociety,

August2015(Montréal)

• French Association of Environmental and Resource Economics, September 2015

(Toulouse)

• Economic stakes of the 2015 Paris Climate Conference, Paris-Dauphine University,

October2015(Paris)

• “Financial markets’ short-termism: Designing incentives for the long term”,

UniversityofTechnologySydney,October2015(Sydney)

• PRIAcademicConference–LondonSchoolofEconomics,September2015

• RIODD2015(Montreal)

• LinkedEmployer/EmployeeDataConference2015(Lisbonne)

• EuropeanEconomicAssociation2015(Mannheim)

• Oikos-PRIYoungFinanceAcademy,June2015(London)

• European Association for Research in Industrial Economics (EARIE), August 2015

(Munchen)

• FrenchEconomicAssociation(AFSE),June2015(Rennes)

• Annual meeting of the Academy of International Business (AIB), June 2015

(Bangalore)

• FinancialManagementAssociationEuropeconference,June2015(Venise)

Examplesofworkshopsandseminars

• INSEAD,September2015(Fontainebleau)

• CollègedeFrance,October2015(Paris)

• 10thAnnualMeetingoftheSwissFinanceInstitute,November2015(Zurich)

• NanjingUniversity,May2015(Nanjing)

• ConseilEconomiqueduDéveloppementDurable,December2015(Paris)

• SéminaireINSEEJuly2015(Paris)


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• ConferenceADRES(Paris)

• TinbergenInstitute,November2015(Amsterdam)

• CREI,September2015(Barcelona)

• UniversityofOttawa,March2015(Ottawa)

• MEDEF&InstitutdeGestionSociale,June2015(Paris)

3.CommunicationtofinancepractitionersIn 2015, the Chaire FDIR has organized various events during which researchers havepresentedtheimplicationsoftheirresultsforCSRandSRI. Inparticular,2workshopshavebeen organized at the AFG. Moreover, the Chaire FDIR has organized at Amundi aconferencethatfeaturedapresentationbyJeanTiroleontheeconomicsofclimatechangemitigation.Workshopswiththesponsors

• Workshop,July2nd,2015.MarcoHeimannandSébastienPouget,IDEI-ToulouseSchoolofEconomics:“MotivationforSociallyResponsibleInvestments”.. Silvia Rossetto, IDEI-Toulouse School of Economics: “Ownership structure, Voting, andRisk”.. Simone Sepe, IDEI-Toulouse School of Economics: “Staggered Boards and Firm Value,Revisited”.

• Workshop,June19th,2015.ElenaEscrigOlmedo(UniversitéJaumeI&EcolePolytechnique):«AnnualMeetingProposalQuality:aGoodProxyofFirm’sResponsibleBehaviorforInvestors?».GwenaelRoudaut(EcolePolytechnique,AgroParisTech)«CSRMotivationsandCommitmentIntensity:NewEvidencefromaFrenchSurvey»ConferenceonNovember2nd,2015

• Conference of Jean Tirole: “The economic institutions to fight against climatechange”

• RoundtablefacilitatedbyJean-MarcVittoriwiththefollowingspeakers

.“Financementsinnovantsdelatransitionénergétique”,AlainGrandjean(Carbone4). “Evaluation et couverture des risques catastrophiques”, Pierre Picard (EcolePolytechnique)


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.“Rémunérationetincitationsdesdirigeants”,AugustinLandier(IDEI-ToulouseSchoolofEconomics)

The presentations made during these workshops and conferences are available on theChaireFDIRwebsiteathttp://fdir.idei.fr.4.Communicationtothegeneralpublic

• Challe,E.«Lesbullesspéculativesmènentausurdéveloppementdelafinance»,LeMondeEconomie,May18,2015

• Pouget S., Measuring corporate social responsibility, Incentives for Long-termInvestments,JournéesdesInvestisseursInstitInvest,December2015.

• TreichN.,LesenjeuxdeCOP21:Laconférencegénèredegrandsespoirs, InterviewLeFigaro,September2015;Evaluerlerisqueclimatique,undéfipourleseconomists,LeMondeWeb,August2015;Theeconomicsoftheendoftheworldasweknowit,The Economist, Free Exchange, July 2015; 100 milliards de coûts annuels pour lapollution à Paris : ce qu’ont fait les métropoles qui ont réussi à agir, InterviewAtlantico,July2015.


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EducationandtrainingrelatedtotheChaireFDIR

The Chaire FDIR is fostering the diffusion of knowledge on CSR and SRIwithin theyounggenerationsoffinancepractitionersandresearchers.State-of-the-arttechniquesandideasofCSRandSRIhavebeentaught invariouscoursesofferedtomasters inEconomicsand Finance at the Ecole Polytechnique, at the Toulouse School of Economics, and at theInstitutd’AdministrationdesEntreprises (IAE)of theUniversityofToulouse.Moreover, sixPhDstudentsarecurrentlyworkingontheimportantissuesoftheChaireFDIR.1.Courses

• Economic growth and sustainability, Cours ECO572 Ecole Polytechnique, PAEcoscience,avecBernardSinclairDesgagné(20h)

• StratégiesDéveloppementDurable des Entreprises -Master2 EconomieduDévDurable, de l’environnement et de l’energie, AgroParistech,Univ ParisOuest&EcolePolytechnique(20h)

• Responsabilité Sociale et Environnementale - Master2 DDET, Univ Paris Ouest(20h)

• EntrepriseetSociété-Master2IES,UnivParisOuest(24h)• Laresponsabilitésocialedesentreprises,mastèreALISEE,AgroParisTech(3h)• Valorisation de la performance extra-financière des entreprises, spécialité

économie et gestion d'entreprises, 3ème année du cursus ingénieurd'AgroParisTech(M2)(3h)

• Sustainableperformance,ESSEC(20h)• MasterinFinance,IAE(UniversityofToulouse):AssetManagement(12h)

• MasterinFinance,IAE(UniversityofToulouse):SRI(12h)

• Master Financial Markets and Intermediaries, Toulouse School of Economics:

Economics of risk and insurance: taking into account the long-term impacts of

investments(27h)

• Master in Environmental andNatural Resources Economics, Toulouse School of

Economics:EnvironmentalEconomics(36h)


Economics:GreenBusinessStrategiesandSociallyResponsibleInvestments(36h)


Economics:Financeandsustainabledevelopment(36h)

• MasterinEconomics,UniversitéParis-Saclay:Macro-finance(24h)


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2.PhDStudentsPhDstudentsoftheChaireFDIRin2015included:

• Thomas André: Evaluation économique des stratégies Bottom of the Pyramid,PhDCifrewithSchneiderElectric,startedin2011(advisor:JPPonssard&PCrifo).

• Liviu Andronic: Extra-financial information and financial forecasts, started inSeptember2010(advisor:S.Pouget)

• MadalenaFerrana:FairnessinCostBenefitAnalysis:Equity-EnhancedMeanVarianceRules,StartedinSeptember2012(advisor:C.Gollier)

• YannKervinio:Fairnessinnaturalresourcesmanagement,startedinSeptember2011(advisor:S.Ambec)

• YvesLeYaouanq:Politicalvaluesandthepolarizationofbeliefs,startedinSeptember2013(advisor:C.Gollier)

• Gwenael Roudaut: En termes de gouvernance, quels sont les déterminants desperformancesdurables?,startedin2012(advisor:P.Crifo).

• YutingYang:Riskandresponsibility,startedin2015(advisor:N.Treich)• Aymeric Guidoux: CSR and governance, Ecole Polytechnique, started in 2015

(advisor:PCrifo)

Report for the year 2015 - fdir.idei.frfdir.idei.fr/wp-content/uploads/2011/02/Report_2015.pdf ·...

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