F. Lemery (Legrand): “A company’s CSR performance helps its financial performance”
The Legrand company is seen by many as being in the vanguard of the corporate social responsibility movement. Its director of finance, Franck Lemery, evaluates the progress of the Limoges-based electronics manufacturer.
Leaders League: As financial director, what role do you play regarding corporate social and environmental responsibility?
Franck Lemery: There are multiple roles for a finance director. First of all, it is necessary to show proof of conviction and of exemplary character so that the business honors its commitments to corporate social responsibility. To give up on the deferral of certain 2020 tax burdens that the states proposed because of Covid shows our civic conviction. Then, finance directors put financial performance processes in place in the corporate social responsibility department. Two examples: Once each trimester, all subsidiaries report their financial and non-financial results during the same meeting. In addition, the calculation of profitability of our new product programs takes into consideration the carbon cost. Senior financial management also supports certain corporate social responsibility objectives, like business ethics. And finally, like all managers in the business, I act directly on different levers, such as energy consumption and diversity. In this matter, senior financial management is a good example of our ambitions, with women occupying 50% of our management positions.
Did the coronacrisis accelerate or slow down the integration of corporate social responsibility in organizations?
Covid has only confirmed our corporate social responsibility commitments. The crisis is not only economic, but also a human challenge. Beginning with the first few days, we made decisions of a solidary nature, for example by adapting a factory in order to create masks in the US, by providing funds in favor of nursing homes in France, and again, by distributing meals in India.
"The crisis is not only economic, but also a human challenge"
The salary of the directors was adjusted and scaled downwards and the instruction of respecting all payment due-dates everywhere in the world was given. In the midst of the pandemic, which resulted in a sharp decline in our revenues, we published new ambitions in terms of carbon neutrality, with some of the first due dates as early as 2022. It is also during these moments of crisis that we remember that these challenges are long term.
How can we marry environmental growth and requirements?
Legrand is working towards making the planet greener, with energy-saving products. Today, 40% of all energy is consumed in buildings and Legrand is acting in the improvement of living spaces. The challenges of corporate social responsibility inform the growth of the business. In addition, external growth constitutes one of our two pillars of development and each time that a business is acquired by Legrand, it is integrated into our group’s environmental program and becomes more virtuous.
Do non-financial indicators influence financial results?
The notion of integrated performance has been around at Legrand for a long time. The commitment to corporate social responsibility was made more than 15 years ago. Since then, the company has more than doubled in size and its operating margin has passed from an average at 15% to about 20%. This improvement cannot be attributed to corporate social responsibility, but it proves that financial and non-financial performances are compatible. You cannot perform on a limited scope of indicators. It is difficult to establish a correlation between financial and non-financial results, but in a business with such a sense of performance like Legrand, the performance of corporate social responsibility does help the financial performance. It allows us to promote a lot of good practices and is also, with the promotion of diversity and inclusion, for example, a source of motivation for teams, and inspiration to prospective talent.
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