Draft & Slides available on request
Léo Denis , Nicolas Mottis
Abstract: Sustainable finance is criticized for its limited capacity to deliver systemic societal impact. Existing research has primarily focused on interactions between investors and companies, neglecting investment firms’ internal governance and organizational characteristics. This paper examines how investment organizations can be structured to achieve financial and societal goals systematically by studying the upstream interactions between asset managers and asset owners. We build on a longitudinal case study of a private equity impact fund focused on environmental transitions approached through ethnography, interviews, and archival data. Our findings highlight the critical role of the fund’s organizational architecture—encompassing value-creation objectives, operational resources, and governance mechanisms—which is determined before its active life on the market. This architecture shapes the behavior of the asset manager throughout the fund’s lifecycle. We also show how hybridizing the organizational architecture by integrating elements from financial and environmental logics can foster subsequent investment and monitoring practices geared toward systemic impact, by driving alignment between financial and environmental goals. By uncovering the upstream organizational mechanisms determining investors’ behavior in the financial markets, this research contributes to the literature on sustainable finance and corporate governance and calls for increased transparency and disclosure of the key characteristics of investment organizations’ architecture.
R&R Revue Française de Gestion, PDF available on request
Nicolas Mottis , Léo Denis
Abstract: In the context of the major challenges we face, some shareholders are pushing companies to develop robust sustainability (or “ESG”) strategies, notably through shareholder engagement practices. This article explores these practices and their effectiveness through the case of different coalitions of investors engaging TotalEnergies SE (a French oil major). We show that these small minority shareholders can have a significant influence on corporate sustainability strategies (even in the highly restrictive French context) by catalyzing the external pressure exerted by its stakeholders, notably through precise collaboration mechanisms that avoid interference and pressure from management. The “success” of these approaches is nevertheless ambiguous and must be analyzed in the light of the target company’s long-term societal impact. This ambiguity should not overshadow the role of the regulator in environmental and social transition.