Businesses in search of a strategy
Interview with Philippe Moutenet, in charge of sustainable development at Mazars in the magazine "Ethique & Vie des Affaires" - February 2003.



To take the dimension of 'sustainable development' into account implies challenges for businesses. Even if they were aware of this from the start, businesses are still far from moving into the operational phase, explains Philippe Moutenet, responsible for sustainable development at Mazars.

How does a firm like Mazars contribute to sustainable development?

Philippe Moutenet: Part of our consultation offer concerns risk management and sustainable development. As yet, given the freshness of the topic, ideas on the theme have still to mature. Being regularly involved in the business world, through auditing or consultancy jobs, has meant that we have a good practical knowledge of the field. This enables us to support businesses as they translate theory into practice. Sustainable development should encourage businesses to think strategically, and should have implications on development policies, objectives, organisation and management methods. At the end of the day, sustainable development is a comprehensive way of dealing with issues that, until now, had to be tackled on an individual level. Our contribution is in helping businesses tailor the concept for practical implication in their firm. In other words, the theme should be approached as a large-scale project with direct appeal. Companies must consider sustainable development on an organisational level, and this is still not happening.


Is it possible to approach sustainable development in the same way as risk management?

P.M.: Yes, businesses tend to compartmentalise risks in order to deal with them: security, hygiene, environment, reputation, finance, and so on. Today, with sustainable development, we believe that it makes sense to develop an integrated vision of risk management. This vision should provide the business with an overview of its position in terms of the risks it faces, allowing it to implement the measures necessary to cover these risks.


How is the risk entailed in overlooking sustainable development different to other risks?

P.M.: There are many powerful factors dictating business behaviour. Firstly there is the law on the new economic regulations, fixing obligations as regards communication in new areas such as societal responsibility and environment. Then there are the stakeholders, who the businesses and local authorities must increasingly integrate into their strategy. This applies particularly in the case of credit-rating agencies that, up until now, have not been sufficiently involved in the process. They have now widened their criteria in order to include environmental and social concerns, as well as client-supplier and citizen-business relationships. This can have serious consequences for businesses. A poor rating can prevent a business from receiving investments from the ethical fund. Rating agencies currently depend on declarations to carry out their work. In the future, they should instead work on the basis of certified facts. This should enable us to orientate ourselves increasingly towards international standards in terms of sustainable development. Finally, we need to take into account that citizens/consumers have a sanctioning power and could boycott businesses that do not operate according to 'citizen' values.


Given these new issues, do businesses seem sufficiently aware?

P.M.: Businesses have made a significant step forward: they no longer consider sustainable development as merely a fashion trend. From this point of view, we have reached a point of no return. Nevertheless, we also need to recognise that there are still many questions to be answered. Many enterprises are unsure how to tackle the issue. Some entrust the matter to the environment manager, others to the communication manager, which for the moment is not a significant problem as it is a topic that needs communicating. However, if businesses continue to deal with the issue through communication departments rather than implementing a genuine strategy, we will quickly see a deterioration in communication as a result. This will lead to businesses facing image problems.


So should businesses set up a 'sustainable development' management team?

P.M.: I'm not convinced that entirely separate management is necessary in the long run. On the other hand, it is important that the business defines its sustainable development policy clearly and that a person or department takes on the task of translating it into operational objectives. In order to pull off this challenge, the sustainable-development project needs to be taken seriously and implemented within each existing management team.


How do the concepts of intangible capital and sustainable development fit together?

P.M.: We are all familiar with the procedure of measuring a business's tangible value. Nevertheless, it is clear that the net financial situation is far from being a realistic representation of the true value of a business. The problem is finding a method of valuing the intangible. The rating agency's move to extend the rating criteria to cover areas other than the financial - such as environment and ethics - acknowledges that there are values other than those based on finance. Among these are the ideas linked to environmental and social practices as well as the business's ethics. In the long term, sustainable development will allow us to identify and recognise part of the business's intangible capital. As for valuation methods for intangible capital, these are probably still not entirely comprehensive.


Do you think that in the future, we will be able to measure intangible goodwill?

P.M.: Why not! Today, in the context of business mergers, we take environmental and social risks into account, generally to lower the price. The concept of intangible goodwill has a meaning, but as yet we don't have adequate valuation techniques to accurately measure the intangible capital of businesses in the environmental and social sectors.


Interview conducted by Jean Cholet