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Witnesses

What is the role of companies in cities transformation?

Patricia Crifo is a professor of economics at Ecole Polytechnique, where she directs the Master’s in Economics for smart cities and climate policy, a member of CREST (CNRS) and co-director of the Sustainable Finance and Responsible Investment Chair at Institut Louis Bachelier.

Cities need to speed up their energy transition. How can they do so?

P.C. The energy transition must combine two seemingly contradictory aspects: the regulatory component imposed by cities, which is perceived as a constraint by economic players, and the economic component, which conversely reflects a potential for investment and competitiveness. Cities will not succeed on their own. Collective intelligence is essential to bring about this change. A great deal is expected of companies in terms of energy transition.

They have a role to play in supporting cities. On the one hand, their budgets are slim, and on the other, societal acceptance of new environmental constraints is not a given, as illustrated by the protest movements in France – the “Red Caps” in 2013 and the “Yellow Vests” in 2018.

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“Corporate social responsibility represents an economic opportunity for the energy transition.”

Patricia Crifo
Professor of economics at Ecole Polytechnique, member of CREST (CNRS) and co-director of the Sustainable Finance and Responsible Investment Chair at Institut Louis Bachelier.

How can companies meet these expectations?

P.C. Companies and investors fully understand this: it is now common practice to combine financial and ESG (environmental, social and governance) criteria. In France, more than a third of assets under management, i.e. approximately €1,000bn, incorporate ESG criteria to varying degrees*.

My research shows that in French companies, there is on average a 13% gap in economic performance between companies that implement CSR practices and those that do not**. Corporate social responsibility thus represents an economic opportunity for the energy transition. But even though CSR has emerged as a major issue in recent years, it arouses both hope and scepticism.

Can you give some positive examples?

P.C. In the context of the Master’s I teach at the Ecole Polytechnique, I came across a very interesting experiment: that of a French start-up, Origins.earth, created to provide local authorities with tools and solutions to help combat global warming. Origins.earth gave students access to data from MétéoCarbone, its service for monitoring and reducing urban CO2 emissions.

As part of their end-of-study projects, this allowed students to assess the public mobility policies of the City of Paris climate plan under a partnership between the Ecole Polytechnique and the City signed in 2019.

References

* Crifo P., Mottis N., M’Zali B., 2022. L’investissement socialement responsable : succès ou dilution ? (Socially responsible investment: success or dilution?) Revue Francaise de Gestion. Introduction. 300/21, 51-60.
** Benhamou S., Diaye MA., Crifo P. 2016. RSE et compétitivité. Evaluation et approche stratégique. (CSR and competitiveness. Assessment and strategic approach.) Etude France Stratégie. 150 pages

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