New Coalitions for the Planet: Edmond de Rothschild Group
- Apr 14
- 5 min read
On long-term capital, transition finance, and the strategic choices shaping Europe's Future
A conversation with Eric de Tessières, Group Chief Sustainability Officer, Edmond de Rothschild group
As climate risks intensify, geopolitical tensions reshape energy markets, and financial systems undergo structural transformation, the role of capital allocation has become central to the global transition. Financial institutions increasingly face a complex challenge: balancing short-term market expectations with long-term systemic change.
Few institutions embody long-term financial stewardship quite like the Edmond de Rothschild group — a family-owned financial house now in its seventh generation. At the intersection of sustainability, investment strategy, and geopolitical reality stands Eric de Tessières, Group Chief Sustainability Officer.
In this conversation during the 11th Sustainability Week by the Economist Impact in London, we explore how long-term capital can drive the energy transition, whether ESG represents a genuine transformation of finance, and why the most important investments may lie not in perfect green sectors — but in industries undergoing transition.
Eric, thank you for taking the time for this conversation. For Monaco, for Europe, and for the global financial community, the energy transition is increasingly a question of capital allocation. How does an institution like Edmond de Rothschild manage to structure long-term investments in a financial environment that often rewards short-term performance?
Eric de Tessières: Long-term thinking is one of the defining strengths of Edmond de Rothschild. We are fortunate to be a financial house owned by a family shareholder now in its seventh generation. For a family that has transmitted a company across generations, the long term is not an abstract concept — it is a responsibility. Each generation inherits the company and aims to pass it on in better condition than it received it. This philosophy naturally shapes our approach to investment. At the same time, the investment world constantly confronts us with a certain paradox. Many clients say they invest with a long-term perspective, yet they still monitor performance quarterly, monthly, sometimes even daily. This creates short-term reflexes.
Part of the role of a private banker or asset manager is therefore educational. We must remind investors that different asset classes require different investment horizons. Some investments require patience and time to fully reveal their value. Managing this tension between long-term strategy and short-term expectations is an integral part of the profession.
We are currently living through a turbulent period geopolitically and economically. Nevertheless, the urgency of the environmental transition remains. During your panel, you suggested that private capital can sometimes have a stronger impact than governments in accelerating the energy transition. Could you explain what you meant?
Eric de Tessières: What I meant is slightly more nuanced. The key distinction is between liquid investments on public markets and private investments. When investors buy bonds or equities on secondary markets, the impact on the real economy is relatively indirect. The capital has already been raised — we are simply trading financial instruments. Private investments operate differently.
When we invest through private debt or direct project financing, the capital flows directly into economic activity — for example infrastructure, renewable energy projects, or industrial transformation. The impact is therefore much more immediate and tangible. That is where private capital can play a particularly powerful role in driving the energy transition.
In your view, has ESG fundamentally transformed investment decisions, or has it mainly reshaped financial discourse?
Eric de Tessières: In many ways, ESG represents less a revolution than a return to fundamentals. Thirty or forty years ago, before the intense financialization of markets, investors naturally analyzed companies in a holistic way. They looked at the company within its environment — its supply chains, customers, and broader ecosystem. Over time, finance became increasingly quantitative and model-driven. Investors focused primarily on financial indicators — balance sheets, earnings, ratios. As a result, we gradually lost sight of the company as a real-world entity. ESG helps restore a more complete analysis. It encourages investors to consider governance, environmental constraints, stakeholder relationships, and long-term risks. I do not see ESG as an external constraint. Rather, it helps managers ask the right questions and ultimately make more informed decisions. And importantly, many so-called “extra-financial” indicators eventually become financially material.
Given the geopolitical instability we are witnessing — particularly in regions such as the Middle East — how do you integrate geopolitical and climate resilience into capital allocation strategies?
Eric de Tessières: Sovereignty — especially European sovereignty — has become a major theme. As a European financial house, we naturally pay close attention to energy sovereignty. Europe possesses relatively limited fossil fuel resources, which means its energy independence must come from other sources. This is precisely where the energy transition intersects with geopolitical strategy. Europe has significant geographic advantages:
· extensive coastlines
· large rivers
· mountainous regions
· strong wind corridors
· significant solar potential
From wind and solar to hydroelectric, geothermal, and nuclear energy, Europe has many of the ingredients needed to build a resilient energy system. In that sense, the energy transition is not only an environmental necessity but also a strategic opportunity for Europe.
Digitalization and artificial intelligence are rapidly transforming our economies. What implications do these technologies have for sustainability?
Eric de Tessières: Artificial intelligence is both a source of great optimism and a reason for reflection. On one hand, AI dramatically increases our capacity to simulate, analyze, and model complex systems. This will likely accelerate scientific discovery and help us find solutions to many environmental challenges. On the other hand, AI requires enormous amounts of energy — data centers, computational power, training models. As a result, AI will likely increase overall energy demand. It may stimulate investment in renewable energy, but in many cases it will simply add new demand rather than replacing existing energy sources. There is also a broader societal question. Beyond environmental impact, we must ask what kind of digital ecosystem we want for our societies, our democracies, and future generations. AI will undoubtedly bring many benefits, but it also raises important ethical and social considerations.
What do you see as the weakest point in the financial transition today, and what gives you the most optimism?
Eric de Tessières: One of the challenges lies in regulatory frameworks. Regulators understandably want to establish robust sustainability standards, but sometimes the approach can become overly restrictive. For example, excluding entire sectors — such as oil and gas — from investment strategies may be counterproductive. The energy transition cannot happen without these industries. If we want to decarbonize the economy, we must engage with high-emission sectors and help them transform. This means investing in companies that are not yet perfect but are moving in the right direction.
What gives me optimism is the emergence of transition finance — financial products designed specifically to support industrial transformation. The transition narrative is easier to explain to clients and focuses on the future rather than on exclusion. Ultimately, the fight against climate change will be won or lost based on our ability to decarbonize high-emission sectors.
Finally, what strategic role can Europe — and financial centers such as France and Monaco — play in the development of transition finance?
Eric de Tessières: Europe is still one step ahead in many respects. We have been discussing sustainable finance for many years, which means there is now a strong level of expertise and maturity across the financial sector.
Europe also benefits from:
· advanced regulatory frameworks
· political commitment
· large pools of capital
· sophisticated financial institutions
All the necessary ingredients are present. The challenge now is simply to find the right balance — the right recipe — to make them work together effectively.
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