Développement durableet Gouvernance

Bernard Sinclair-Desgagné, Ph.D.

Professeur titulaire, HEC Montréal Chaire d’Économie internationale et de

gouvernance

BSD.com

Business

for Sustainable

Development

Qu’est-ce que le développement durable?

Rio (1992)

«Satisfaire les besoins des générations présentes sans compromettre la capacité des générations futures à satisfaire aux leurs.»

Qu’est-ce que la gouvernance?

Le terme «gouvernance» serait né en France au 12ième siècle, avec un sens très technique: la direction des bailliages. Les historiens anglais du Moyen-Âge se réfèrent à la governance pour caractériser le mode d’organisation du pouvoir féodal.

Governance refers to the alignment of the actions of several diverse people or groups who must collectively deliver some output.

Trois institutions inéluctables et globales

1. Le marché- Les biens public globaux -

2. L’entreprise- Stakeholders vs

Shareholders -

3. La science et l’innovation- Le Principe de Précaution -

1. Le marché

Les biens publics globaux

non-rivalité non-exclusion

Biens publics purs x xstabilité politique et économiqueéradication des maladies infectieusesrecherche fondamentale

Biens communs xressources halieutiquesservices écosystémiqueslutte dontre le crime organiséefficacité des antibiotiques

Biens clubs xdéfenseinfrastructuresdissémination de l’information

1. Le marché

Les biens publics globaux

Organisations internationalesgouvernements

ONGs

Questions de recherche

Comment coordonner les actions des divers intervenants, sans la «main invisible» du marché et sans la présence d’un gouvernement mondial?

Comment financer la production et l’entretien des biens publics globaux?

[Voir la proposition de M. Georges Soros…]

Quel rôle donner aux ONGs dans ce domaine? Et qu’en est-il de leur gouvernance?

2. L’entreprise

Stakeholders vs. Shareholders

managementConseild’administration

shareholders stakeholders

Stakeholders vs. Shareholders

The present tendency not only to allow but to encourage such use of corporate resources [in the service of some “public interest”] appears to me as dangerous in its short-run as in its long-run consequences. The immediate effect is greatly to extend the powers of the management of the corporations over cultural, political, and moral issues for which proven ability to use resources efficiently in production does not necessarily confer special competence; and at the same time to substitute a vague and indefinable “social responsibility” for a specific and controllable task.

- Freidrich A. Hayek -

Stakeholders vs. Shareholders “[The] directors have fiduciary responsibilities to

share-holders which, while allowing directors to give consider-ations to the interests of others, compel them to find some reasonable relationship to the long-term interests of shareholders. [...] A Delaware Supreme Court's decision to enable directors to give consideration to the interests of others does not suggest that the court intended to authorize redress of an adverse impact on a non-shareholder constituency at the expense of share-holders.”

- American Bar Association -

Stakeholders vs. Shareholders

Social minimalism

- Compliance with the law and prevalent

moral standards

- War or natural catastrophes

- Key resources and infrastructure

Stakeholders vs. Shareholders

Social pro-activism

Cadbury Report (UK), Rapport Viénot (France),Dey Report (Canada)Principles of Corporate Governance (OECD)GM’s Board of Directors GuidelinesJohnson & Johnson’s “credo” , etc.

“The present status enjoyed by the business community also yields certain duties towards intangible, yet fundamental, features of the

social fabric – such as trust – that legitimize their business activity.”

« Businesses – even very large corporations – are generally open systems. By contrast, a national

economy [or an eco-system – especially that of the earth itself - ] is a closed

system.(…)

Paul Krugman, « A Country is Not a

Company », HBR, 1996.

First implementation tool: Corporate Sustainability Reporting

(i) Institutional background

(ii) Voluntary disclosures

(iii) An increasingly widespread underlying

method: Life-cycle analysis

(i) Regulation by information…

• EPRKA – Emergency Planning and Community Right-to-Know Act (1985)

• RMP – Risk Management Program (1999)

• Seveso II Directive (1992)

• Loi 173 in Québec (2002)

• France’s mandatory Corporate Sustainability Reporting (2003)

Avant EnronPression pour une meilleure gouvernancePropositions des rapports Viénot (1995, 1999)• touchent surtout aux pratiques de

gouvernement d’entreprise• comparables à celles formulées dans la plupart

des pays de l’OCDE

Depuis EnronPression pour plus de transparenceRapport Bouton (2002) traite notamment de• pertinence des normes et pratiques comptables• qualité de l’information et de la communication

financièreLoi sur nouvelles règlementations économiques

… En Europe et en France

(ii) Démarches volontaires

Continuing increase in the number of companies issuing some form of report on their environmental, social and economic performance – known as sustainability, triple bottom line or triple P (people, planet, profit) reporting

Corporate Sustainability Reporting in Canada, Nov. 2002KPMG International Survey of Corporate Sustainability Reporting 2002, June 2002Sustainable development reporting – Striking the Balance, The World Business Council for Sustainable Development, Nov. 2002

The International Charter for Sustainable Development, developed by the International Chamber of Commerce

Enacted in more than 60 countries

Signed by more than 2300 organizations

Objective: commitment to improving environmental performance on a voluntary basis

The Charter’s 16 principles

1. SD’s a corporate priority 9. R&D2. Integrated management 10. Prevention3. Continuous improvement 11. Outsourcing

management4. Personnel training 12. Preparation5. Credible assessments 13. Systematic

learning6. Products and services imp. 14. Exchanges on best

practices7. Consumer awareness 15. Openness to dialogue8. Plants and activities imp. 16. Stakeholders information

Global compact

Launched in July 200050 large firmsUnion leadersEnvironmentalistsHuman rights organizations

=> 9 principles =========

Human rights

Support human rights wherever their activities take placeMake sure that the firm does not implicitly become an acomplice in human rights abuses

Labor rights

Respect freedom of association and the right to collective negotiationBan any sort of forced laborBan child laborEliminate discrimination and harassment

Environment

Promote a precautionary approachTake initiatives in favor of greater environmental accountabilityEncourage the development and adoption of environmentally friendly technologies

Research questions

Why would some corporations engage in better quality sustainability reporting than others?

Is the quality of environmental or social disclosure practices related to the value of the firm? A cost/benefit’ approach.Is this choice of quality level the result of a deliberate “social disclosure" strategy explainable by certain internal and external determinants?

• What are the determinants of sustainability or « triple bottom line » reporting?[Voir Sinclair-Desgagné et Gozlan (2003) ;

Labelle, Schatt et Sinclair-Desgagné (2004)…]

Relevance of regulating this type of corporate disclosure?

Création (destruction) de valeur

5. Partenaires(stakeholders)

Juricomptabilité

Environnement légal national / international implique un plan expérimental transnational

1. Secteurd’activités

12

2. Informationfinancière

3. Contrôle degestion

4. Mécanismesexternes

Gouvernance

Normes périjuridiques fondées sur le principe d’autoréglementation

3

(iii) Life-Cycle Analysis

• An approach that considers the whole set of steps in a product, process or service’s « life », from « craddle to grave ».

• For all those steps - from the extraction and first treatment of inputs to manufacturing, transportation and distribution, consumption and use, recycling, and waste management - bear economic and environmental consequences.

Inputs Environ. Outcomes

Rawmaterials

Energy

Water,...

Air emissions

Water emissions

Solid waste

Reusable products

Other emissions

Extraction

Transformation

Manufacturing

Transportation Distribution

Utilization

Disposal

Inventory

What is an LCA?

Environ. Outcomes

Air emissions

Water emissions

Solid waste

Produits utilisables

Other emissions

1- Global warming (GWP)2- Ozone-layer depletion (ODP)3- Acidification (AP)4- Eutrophization (EP)5- Smog (POCP)6- Ecosystem damages7- Reduction of biodiversity9- Land erosion9- Ecotoxicological impacts10- Toxicological impacts

Impacts

What is an LCA?

Second remedy: Accountability and Incentives

White-collar paradox?!!

Organizational behavior expert Steven Kerr (1975):

« On the Folly of Rewarding A while Hoping for B…»

Les crimes de cols blancs (white-collar crimes) coûteraient aux compagnies américaines entre $200 milliards et $600 milliards par année.

Par comparaison, les crimes de rues et autres larcins (vols, cambriolages) coûteraient respecti-vement $4 milliards et $15.6 milliards par an.

La fraude chez une compagnie typique repré-sente une perte allant de 1% à 6% de son chiffre d’affaires.

Plus de 30% des faillites de nouvelles entre-prises seraient dues à des crimes de cols blancs.

The Sarbanes-Oxley Act (30 juillet 2002)- Accuracy of financial reports- Off-balance sheet transactions- Pro-format financial information- Loans to executives- Officer/Director bars and penalties- Changes in stock ownership- Internal controls- Code of ethics- Audit committee expertise- SEC enhanced review of periodic disclosures- Real-time disclosure

Sarbanes-Oxley pour les cies non-US:

- Officer certifications- Loans to directors and executive officers- Bonus and other forfeitures in event of restatements- “Whistleblower” protection- Reports of personal securities transactions of directors

and executive officers- Audit committee organization and responsibilities- Independence of accounting firm- Registration of U.S. and non-U.S. accounting firms with

board- Disclosure of material correcting adjustments- Codes of ethics for senior financial officers- Internal control assessments- Off-balance sheet transactions

Sarbanes-Oxley… et au delà:

Canadian Council of Chief Executives

Codes of ethics. In order to serve the interest of our shareholders, it is not enough to make business decisions guided only by what is permitted by the letter of law. Sustainable growth in sharehoder value requires that we set high ethical standards for operating our businesses and champion a corporate culture based on doing what is right. We recognize that it is the actions rather than just the words of the chief executive that sets the tone for the behavior of employees within our companies and that determines the company’s reputation with customers, suppliers and other stakeholders.

3. Un paradoxe de la conformité?► On a observé une corrélation positive entre le nombre

de programmes de mise en conformité et le nombre de crimes de cols blancs.

Arlen and Kraakman (1997): «pursuing the basic enforce-ment goals of (1) inducing efficient activity levels and (2) minimizing the joint costs of misconduct and enforcement (…) places different, and potentially inconsistent demands on a corporate liability regime.»

Hasnas (2005): «(…) in the context of federal criminal law, there are many ways in which compliance is not ethical and ethical behavior is not compliance.»

Conformité plus «diligente» / gouvernance plus «serrée»

1. Clarté des politiques et procédures2. Engagement de la direction3. Délégation «diligente»4. Communication et transparence5. Suivi et protecton des sonneurs d’alarme6. Mise en vigueur et corrections uniformes7. Amélioration continue

► Les «U.S. Sentencing guidelines» prévoient des réductions substantielles de peines fondées

sur « l’effort de mise en conformité».

Dispositifs de mise en conformité de nouvelle génération:

☻ Promotion de la diversité

☻ Nouveaux partenariats ONG-Entreprises

- Lafarge et WWF- Starbuck et Oxfam- Body Shop et Friends of the Earth- McDonald’s et Environmental Defense Fund- Bristol-Myers Squibb et Conservation

International

Lindseth (2004): «(…) each additional dollar of compliance spending saves organizations, on average, $5.21 in heightened avoidance of legal liabilities, harm to the organization’s reputation and lost productivity.»

Bengt Holmstrom et Paul Milgrom (1991)

« The desirability of providing incentives for any one activity decreases with the difficulty of measuring performance in any other activities that make competing demands on the executive’s time and attention. »

• Job design

• Procedures and constraints

Bernard Sinclair-Desgagné (1999, 2002)

Two tasks A and B.

Task A is routinely monitored, but not task B.

The principal commits to investigating about task B when task A’s outcome is high.

The executive is penalized after the investigation reaches a negative conclusion.

On average, however, the executive is better off when an investigation takes place.

3. La science et l’innovation

Le Principe de Précaution

Some background

Removal of the handle of the Broad Street water pump in London in 1854, an action that then stopped an epidemic

of cholera.

This measure followed documented (but unconfirmed) suspicions by John Snow, a physician and much revered early epidemiologist, that the cause of the disease originated in the pump. (Afterwards, a detailed investigation determined that, more than 20 feet underground, a sewer pipe passed within a few feet of the well.)

The U.S-Canada Great Lakes Water Quality Agreement:“Such a strategy [a phase out of all toxic persistent substance] should recognize that all persistent toxic substances are dangerous to the environment, deleterious to the human condition, and can no longer be tolerated in the ecosystem, whether or not unassailable scientific proof of acute or chronic damage is universally accepted.”

Science-based regulation (the National Environmental Policy Act, the Clean Water Act, the Occupational Safety and Health Act, the Federal Food, Drug, and Cosmetic Act, …)

The U.S. Food Safety System stipulates that “conservative” risk management decisions be implemented when safety information on a hazard in a food is “substantial but incomplete.”

Despite this widespread use, however, the Precautionary Principle remains controversial and is often the object of acrimonious debates.

Advocates argue that it provides potential victims a safeguard against sloppiness or manipulation in science-based regulation.

But critics say that it gives undue veto powers to “environmental extremists” to block technological progress and opens the door to lobby groups to foster trade protectionism.

Admittedly, in its present form the Precautionary Principle is subject to a wealth of interpretations.

Economic Interpretations of the PP

Le Principe de Précaution comme une «option réelle».[Gollier, Jullien et Treich (1999)]

Le Principe de Précaution comme expression de l’aversion à l’ambiguité.

Aversion to ambiguity - the Ellsberg (1961) paradox:

Urn A contains 50 red balls and 50 black balls

Urn B contains 100 red or black balls.

"You win $100 if a ball drawn from the urn you pick is red.“

Which urn do you pick?

Most people pick urn A.

Le paradoxe de la précaution[Barrieu et Sinclair-Desgagné (2003)]

All statements of the PP involve three key items:

a) scientific uncertainty giving way to a range of undismissable scenarios;

b) collective preferences that identify at least one of these scenarios as a plausible “bad”;

c) a feasible (i.e. morally acceptable, technologically doable, and affordable) precautionary strategy that, if implemented,

would reinforce the status quo.

The statement that the occurrence of (a) and (b) entails (c) is logically inconsistent!!

To invoke the Precautionary Principle, the regulator

must either specify those utility indices which are considered admissible, forego an expected utility ranking of policy alternatives, or establish a “proportionality” relationship between precautionary strategies and potential harms.

This paper leaves unanswered many other important

issues, such as the management of expertise and the consequent evolution of scientific knowledge, the political economy of environmental and safety regulation, and the division of labor in selecting and implementing precautionary strategies.

autoritéspubliquesou privées

experts

public

Questions de recherche

Quelle relation y a-t-il entre l’innovation et la gestion des risques technologiques?

Comment assurer le progrès de la science et l’indépendance des experts?

[Roqueplo (1998): «L’expert est ce scientifique qui s’inscritdélibérément dans un processus de

décision.»]

Comment développer et préserver des «institutions crédibilisantes»?

Conclusion

Question de méthode:L’étude d’un mécanisme de gouvernance doit

nécessairement considérer les trois volets de celui-ci, soit:- sa structure,- les «process» sous-jacents, et- le comportement des acteurs.

L’approche économique de la gouvernance vise donc à entrevoir les conséquences logiques du comportement des acteurs au sein de la structure et des processus considérés, comportement qui résulte lui-même de trois ingrédients:

Les aspirations des acteurs

Leur mode respectif de représentation de la situation

Et surtout: l’exercice omniprésent d’un calcul