Towards a finance that CARES

Alexandre Rambaud (1) , Jacques Richard (1)

1 DRM - Dauphine Recherches en Management

Today's sustainable finance mainly relies on the extension of a particular classical capital theory to extra-financial types of capital (in particular human and natural). We call (and justify it) this mainstream theory, the Fisherian-(falsified) Hicksian approach. After a critical analysis of this model, we claim that this way of conceptualising sustainable finance is finally unsustainable. At the same time, we also defend the idea that there is a convergence between ecological-based sustainability (which we can call by definition a genuine sustainability) and the extension of the traditional accounting framework to extra-financial types of capital. Therefore, we propose to structure a sustainable finance from this perspective (which we call CARES, for Capital Approach Resting on Ecological-based Sustainability): after having defined how to operationalise and theorize such a sustainable accounting, thanks to the " Triple Depreciation Line " model (Rambaud & Richard, 2015), we use this model to redefine the notion of free cash-flows to make them " sustainable ". We finally discuss the manner they can be used for financing purposes.

Mots clés: sustainable finance; social and environmental accounting; sustainability; capital; integrated reporting; free cash-flows

Domaines: Economies et finances; Gestion et management; Etudes de l'environnement

Alexandre Rambaud, Jacques Richard. Towards a finance that CARES : From today's Fisherian-(Falsified) Hicksian perspective to a genuine sustainable financial model, designed through accounting principles. Social and Sustainable Finance and Impact Investing Conference, Apr 2015, Oxford, United Kingdom. ⟨halshs-01260075⟩