Green Business in France in a snapshot ? A little background first…

During the G20 summit in London, Nicolas Sarkozy’s posture – quite different from his initial position that France’s problem was that it was not taking enough risks or borrowing enough along US or British lines - changed, as he pushed for reforms of the current financial system based on the French model of high social protection and cautious banks.

This "moral" capitalism has gained strong public support in France, where the financial crisis has seen record public support for strikes and street demonstrations, a rise in extreme protests such as taking bosses hostage, and a surge of support for the left.

How has this changed the business context ?

Society and workers want to participate in creating a better, fairer, more sustainable world and expect their employer’s brand to encompass this aim.

Climate change and the environment are at the top of the socio-political agenda.

This second point is reinforced by the recent and piece by piece arrival of the pioneering Grenelle laws that have created an atmosphere of anticipation and contained panic as French companies are trying to anticipate the new environmental laws that will take effect at the end of this year.

The Grenelle Environment Project, launched in June 2007, is a national conference on the environment sponsored by Jean Louis Borloo, which aims to launch an ecological revolution in France and to create favourable conditions for the emergence of a new French model of environment protection.

The government and representatives of the general public have met jointly for the first time for the purpose of mapping out a route that will benefit the ecosystem and allow sustainable business development.

So great news for us, as Grenelle working groups were charged with addressing the following subjects :

• combat climate change and control the demand for energy;
• preserve biodiversity and natural resources;
• create an environment that is beneficial to human health;
• adopt sustainable methods of production and consumption;
• construct an ecological democracy; and
• promote ecological methods of development that encourage employment and promote competition.

How is this impacting French companies ? To give but a couple if examples ;

- Legal entities with more than 50 employees or agents must prepare a carbon energy report covering water, waste and transport within three to five years.

- ‘Energy category’ labelling (with emission-based categories) will be extended to all high-consumption electrical devices

- A trame verte ('green web') or ecological network linking green-belt areas will be established to promote the circulation of plants and animals. Regulation of light pollution will be established and a plan for the conservation and restoration within five years of 131 endagered species will be implemented.

- Obligatory carbon labelling for mass consumption products by 2011.

- Inversion of the charge of proof : for public decisions susceptible of having a significant impact on the environment, decision procedures will be revised to promote environmentally sound solutions. Companies will have to prove that they have chosen the best environmental option possible.

It is crucial at this time that politicians take environmental considerations into account in their economic stimulus packages.

One of the first examples of public policy to result from the Grenelle is the bonus-malus system for the purchase of new vehicles. The principle is simple and aims to compensate, via a bonus (from 200€ to up to 5000€ for electric vehicles), the purchase of cars with reduced co2 emissions (less than 130g co2 / Km). On the other hand, those who opt for more polluting vehicles are penalised via a malus. As such, the malus’ of the latter finance the bonus’ of the prior.

If, in addition to buying a less polluting vehicle, car owners bring their old car (more than 15 years) to the scrap yard, they are entitled to an additional “super bonus” of 300€ - which has been increased to 1000€ in the context of the economic stimulus plan.

As for the social considerations of green business, with the Global economic meltdown in full swing there is a very real danger that responsible business practices move to the bottom of the to-do-list. With more and more companies laying off people and most employers severely tightening their belts, there is a risk that corporate responsibility will be considered a favourable action rather than a business imperative. 

It is my belief that responsible business practice, particularly in the workplace, is more important than ever if businesses are to find a way to navigate through the tough times ahead and be fit for the future. The current crisis offers an opportunity to rethink workplace design and practices to better align them with the new knowledge era and the expectations of the workforce and the societies in which they live.

And as for the consumers…

The global financial crisis has comforted French consumers in their long-standing mistrust of free markets, capitalism and companies in general. Consumer confidence in companies is down 24 points from last year and is, at 37%, at its lowest point since we started our survey 5 years ago.

Low consumer trust and an abundance of green marketing claims are pushing French consumers to seek proofs. This, coupled with the belief of many French consumers that their environmental efforts will only have an impact if companies do the same, is reshaping green business.

This said, 90% of French people see the current economic crisis as an opportunity to revise our lifestyle and consumption habits.

From our perspective, consumers are gaining in power. Far from being able to impose products and artificial desires on consumers, companies are now obliged to actively listen to their consumers (a changing and definitely greener consumer as far as we’re concerned - For 75% of French people, sustainable development is a necessity).

And as with every market, consumer expectations, along with economic pressure, are fuelling the drive for green business. In France  consumers are pushing companies a step further than sustainable products and services to sustainable business models.

It’s exciting times for us as we accompany companies in the shift from sustainable products and services to sustainable business models.

If you want to find out more, an practice your French… you can find the full results of our annual survey on our blog : http://www.blog-ethicity.net/share/docs/Enquete_Ethicity_2009_synthese.pdf

Elizabeth Pastore-Reiss

President Founder ETHICITY

This article was written to appear in Business Briefing, a client magazine published by the UK law firm, Dickinson Dees  www.dickinson-dees.com.