Finance

When finance takes the environmental turn

In his new book, “The keys to corporate finance”, Sébastien Ristori, financial analyst, director of the Barnes Corse group, deciphers the classic mechanisms that govern this sector while identifying the changes underway and projecting himself into the future. . Pedagogic

Through a series of books, he has already put everything back on track concerning the creation and takeover of a business, the business plan and financial management in order to allow everyone to take hold of these themes.

From now on, Sebastien Ristorifinancial analyst, group director Barnes Corsicateacher in finance, widens its field of educational action by integrating finance into the ecosystem of the company, with its mechanisms and its concrete challenges. Once again, the game is played in a very methodical way through indicators, analyzes and clear headings declined, this time, over the pages of the Business Finance Keys.

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The subject varies, the very operational and concrete editorial logic remains. “The book is a 4-part instruction manual“, summarizes the author.

In his program, he chose to include “deals with understanding accounting information“, the methodology for carrying out an in-depth financial analysis, as well as the effective tools that will be used”conduct a business valuation“.

Within the pages, how to select financing and use financial securities will also take center stage.

“Things Turn Around”

These motives have imposed themselves along with a definition of corporate finance, in other words, “youA discipline of diagnosis, evaluation and decisions of companies, projects and financing which uses different techniques to carry out financial analyses, to value a company, financial securities or investments. It is still a question of selecting financing, of developing strong engineering projects, such as the acquisition of a business, the management of bankruptcy, the structuring of a group“, he enumerates.

At the same time, the dimension “sustainable” finance has become a reference. We combine financial operations, growth, sensitivity to climate change and environmental commitments. Beyond a strategic base. “By definition, the investor expects a rate of return that corresponds to the remuneration required from the activity taking into account its risk. This is, in fact, the minimum to be achieved in order to create value. For years, the managements of the largest companies have aimed to achieve this expected level of performance, to the detriment for a very long time of any environmental, sometimes societal, consideration and without worrying about the methods of governance.“, explains Sébastien Ristori.

From now on, we can no longer ignore, according to him, the changes in progress. “Things change in stages. Societal considerations have become central in companies, for example, inclusion, gender parity in remuneration and positions, well-being at work and social dialogue. On the other hand, environmental issues are just beginning to arise for everyone.

Either way, one becomes more realistic under pressure, among other things, “the heat dome in Canada, the health crisis, climate change across the planet. All these episodes have burned people’s minds. We can see it very well, the intensive industrial and human impact can accentuate environmental degradation. these will come in turn, like a boomerang, to eliminate companies and by extension, finance”he analyzes.

Especially since the environmental cause has become more profitable too. “Until now, it was first necessary to create value to be greener. Today, things are reversed: you have to be greener first to create value. Firstly, because companies that do not care about the environmental footprint will have difficulty convincing consumers who are increasingly well informed, secondly, because the recruitment of talent also depends on its environmental image: who wants to proudly working with a big polluter? More people.”

A rating system for companies

“In addition, the societal and ethical aspect is now very present in companies that think about the comfort of their employees, their social security coverage, the consideration of the work done with new modes of collaboration. We are truly entering another era. “believes Sébastien Ristori.

In the same movement a ladder of virtue was put in place. We identify the good and the bad. “For larger companies, companies specializing in green rating come to score companies from an adapted reading grid to give a ”green” rating.. More and more private investment funds, or securities managers, are using these criteria to direct investments. Moreover, the profession of ”ESG analyst” – environment, societal and governance -, which is very complementary to the profession of financial analyst, has developed. Its purpose is to draw up a complete inventory of the ESG practices of companies. This allows funds to be directed towards greener companies. Tools such as green or sustainable bonds intended solely for this financing are used“, develops the author.

So many innovative trends that he illustrates with concrete cases in his book.

“The keys to corporate finance”, Sébastien Ristori. 328p. Ed Ellipses

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