Development of emerging countries and climate transition, two battles that must be fought together. This is the whole purpose of the reflections carried out with a view to the Summit for a new global financial pact organized under the impetus of Emmanuel Macron and the Prime Minister of Barbados Mia Mottley, in the continuity of COP27 and ahead of COP28. The event will be held in Paris, on June 22 and 23, and will bring together at least fifty heads of state as well as representatives of international organizations, the UN, IMF, World Bank… Bertrand Badré knows these issues closely. This former financial director of Crédit Agricole and Société Générale headed the World Bank about ten years ago. He is now at the head of Blue Like an Orange, with Axa in its capital, and manages sustainable investments in emerging countries. As part of the summit, he co-chaired the private sector finance working group.
L’Express: For you, what is the main challenge of this summit?
Bertrand Badre: The battle for the climate and biodiversity and against inequalities is also being won in developing countries, and not just in Paris and Washington. I see sources of tension between the countries of the South and the North, that is to say the members of the G7 and the OECD, with a discourse that opposes these causes. One of the great challenges of this summit is to link the subjects, because they are not incompatible.
How to do ?
The countries of the South have the feeling of being embarked on major changes without being supported financially. We have to ask these financial questions. This summit wants to respond to all the creations expressed for twenty years, obviously it will not succeed, but it can help the international calendar to evolve. This summit will allow us to ask questions and begin to provide answers. At the end of the process, deadlines must be set on identified subjects.
Four working groups were organized upstream, in addition to a transversal group made up of economists. The one devoted to the international financial system will bring its reflections on the treatment of debt, innovative subjects can be put on the table to move from the laboratory to the light, as we saw in Ecuador [NDLR : le pays a obtenu une réduction de sa dette en échange d’efforts en faveur de la biodiversité].
Overall, to meet the challenges of development and ecological transition, what amounts are we talking about?
The additional needs are estimated between 3,000 and 5,000 billion dollars per year. The subject is not only macroeconomic: if we find this money, we must then manage to transmit it to the field, for the entrepreneur from Mali, Mexico… This can go through technology. No need to build a network of bank branches, today we create apps. This is one of the possible routes, it can allow you to go from Brussels to the depths of Côte d’Ivoire and Bolivia.
The working group that you co-chair looked at private sector financing in emerging countries. What are the levers to encourage it?
In these countries, there are very large companies on the one hand and a large informal economy on the other. Between the two, SMEs and ETIs are under-represented. This section, which is a major pillar of development, is not central for development banks, and does not attract investment from insurers, pension funds… We even see Western banks withdrawing from Africa these last years. However, given African demographics, 2 million jobs should be created per month!
It must be made a priority by creating a kind of Bpifrance for emerging countries, an institution for support, financing, advice to entrepreneurs… As for public bodies, it is also necessary to develop appropriate, simple and not too expensive tools. Furthermore, the conditions must be met for investors from the North and other countries of the South such as Brazil, India, etc. to agree to invest in these regions. In Europe and the United States, less than 5% of total assets under management are invested in emerging countries, hampered in particular by regulatory constraints such as Basel 3 and Solvency 2, for the sake of risk management. Also be careful that the standards related to impact and ESG [NDLR : intégration de critères environnementaux, sociaux et de gouvernance] are not exclusionary norms. Above all, we must find a way to help them in their transition.
Is this also the perspective of your company, Blue like an Orange?
On the sidelines of the summit, we are going to announce with our partner Africa 50 that we would soon like to launch a new fund in Africa, a vehicle for investing there under good conditions, in terms of financial return and impact. And that is what needs to be done on a massive scale.
Another working group at this summit is considering new sources of funding, such as an air tax. A familiar subject?
I see it as a sort of Back to the future: with Jean-Pierre Landau we were behind the tax on Jacques Chirac’s plane tickets almost twenty years ago! But it is not easy to go on a global scale and France will not necessarily be followed. Other ideas for new international taxes were discussed while preparing for this summit, on shipping, fossil fuel producers, air travel, financial transactions… but these must now be confronted with the reality of the political terrain.