Building a more sustainable world requires the participation of actors from different sectors and across different levels of government, from local authorities to heads of state. For nearly 40 years, ESSEC Business School has developed unique expertise in urban and territorial development through its Urban Economics Chair. The Chair’s work led to the development of the concept of “Corporate Territorial Responsibility”: how regions can contribute to growth and sustainability through various forms of local involvement by private actors in relation with public policies.*

The Chair's research has forged a sophisticated econometric model of urban dynamics that explains approximately 70% of development trajectories across French functional urban areas. This model highlights three key drivers of territorial competitiveness. 

1. Geographical competitiveness reflects a territory's ability to attract external resources, particularly high-value service sector jobs. 

2. Inclusive competitiveness measures a territory's capacity to integrate its working-age population into economic activity, revealing that social inclusion is not merely a moral imperative but a crucial factor in economic performance. 

3. Urban salary captures the non-monetary benefits that territories offer residents through quality of life and services.

While this econometric model explains approximately 70% of urban trajectories through quantifiable socioeconomic variables, the remaining 30% suggests the influence of other, more qualitative factors in territorial development. The Chair's research hypothesizes that these unexplained variations may largely stem from differences in economic governance - specifically, how public and private actors interact and cooperate at the territorial level. This hypothesis led to the development of the concept of Corporate Territorial Responsibility (CTR), which provides a framework for understanding how companies' territorial engagement might contribute to urban dynamics beyond purely economic factors.

Unlike traditional Corporate Social Responsibility (CSR), which often treats territory merely as a context for corporate actions, Corporate Territorial Responsibility (CTR) represents a distinct and more strategic approach to business-territory relationships. CTR can be defined as the set of behaviors through which a company engages with its territory beyond its strict operational functioning, driven by a logic of mutual interests.

This definition emerges from the Chair's dual theoretical lineage. First, while CTR incorporates certain territorialized forms of CSR, it extends beyond them to encompass broader forms of territorial involvement. Where CSR often approaches territory as a passive recipient of corporate actions, CTR recognizes territory as an active partner in value creation. Second, CTR draws from neo-institutional economics, particularly the concept of transaction costs developed by Coase and Williamson, to analyze how public-private interactions can optimize territorial resources.

The strategic nature of CTR manifests in several ways. Companies engaging in CTR recognize that investing in territorial development can reduce their transaction costs, improve access to local resources, and enhance the overall attractiveness of their operating environment. This might involve participating in local economic development initiatives, contributing to workforce development programs, or engaging in public-private partnerships for infrastructure development.

Furthermore, CTR encompasses both institutionalized and informal forms of cooperation. On the institutional side, this might include participation in local development agencies, involvement in strategic planning processes, or formal partnerships with public authorities. Informal cooperation might involve networking with other local businesses, supporting local initiatives, or contributing to territorial marketing efforts.

Importantly, CTR is not driven primarily by moral or legal considerations, as is often the case with CSR, but by a recognition of the mutual interdependence between company and territory. It represents a strategic approach where territorial engagement is seen as an investment that can generate returns through improved operating conditions, enhanced access to resources, and stronger stakeholder relationships. This strategic dimension distinguishes CTR from both traditional CSR and simple territorial presence, making it a more comprehensive framework for understanding and managing business-territory relationships.

This correlation manifests in two distinct patterns. In already dynamic territories, companies engage proactively, reinforcing existing advantages. In challenged territories, companies respond reactively to local needs, often helping to address socioeconomic challenges. In both cases, CTR operates through mutualistic logic, where companies' territorial engagement serves both their interests and broader territorial development.

The research particularly highlights the importance of economic governance - the institutionalized interactions between public and private actors. To test this hypothesis, the Chair conducted both quantitative and qualitative analyses. A large-scale survey of business leaders across France examined various forms of territorial engagement, from participation in local economic development initiatives to involvement in public-private partnerships. This econometric analysis revealed that certain types of corporate behaviors, particularly those involving coordinated action with public authorities, correlate significantly with urban dynamics. These behaviors manifest differently in dynamic versus declining territories, suggesting that economic governance can be both a driver and response to territorial development.

This quantitative approach was complemented by detailed case studies, notably a comparative analysis of Greater Paris and Greater London from 1990 to 2017 conducted by Edouard Dequeker, professor for the Chair of Urban Economics. This thesis and ongoing additional research and publications reveals how different models of public-private cooperation significantly impact metropolitan development. London's dense network of institutionalized public-private interactions, inherited from a long tradition of local cooperation, has facilitated more effective adaptation to the Third Industrial Revolution. The model includes regular consultation with business leaders, formalized through bodies like the Mayor's Business Advisory Board, and active private sector participation in strategic planning. In contrast, Paris's more fragmented institutional landscape and lesser capacity to mobilize economic actors in metropolitan governance appears as a significant explanatory factor in the divergent trajectories of these capitals. This mixed-method approach, combining statistical analysis with detailed case studies, provides robust evidence for the role of economic governance in territorial development.

The results of the comparative analysis between Greater Paris and Greater London suggest that Parisian public decision-makers would benefit from establishing more systematic interaction spaces with the business community, moving beyond simple consultation toward strategic co-construction of metropolitan policies. The institutional fragmentation and lack of public-private coordination observed in Greater Paris significantly limit the reduction of transaction costs and hinder the emergence of a shared vision for territorial development. Public authorities should therefore rethink their governance structures to more substantially integrate economic actors, following the London model where the Greater London Authority functions as a catalyst for existing stakeholder systems, fostering exchanges and negotiations that contribute to the metropolitan system's adaptation to new economic and technological opportunities.

For private decision-makers, the London example demonstrates the value of proactive involvement in territorial governance issues, moving beyond the defense of sectoral interests to contribute to the development of a coherent metropolitan strategy. Parisian businesses would benefit from developing more robust and transversal territorial representation structures capable of interacting effectively with public authorities and actively participating in shaping metropolitan policies. This approach, fully embodying the concept of Corporate Territorial Responsibility, would not only improve the attractiveness and competitiveness of Greater Paris but would also constitute a strategic lever for the companies themselves, contributing to the creation of an economic environment more conducive to innovation and adaptation to contemporary technological changes.

As cities face mounting sustainability challenges, both social and environmental, the importance of CTR becomes even more pronounced. The research suggests that addressing these challenges effectively requires coordinated action between businesses and other stakeholders. Companies must move beyond viewing territory simply as a location for their operations and instead recognize their role in co-producing territorial sustainability.

This work has significant implications for both public policy and corporate strategy. For public authorities, the key is not to multiply incentive schemes but to create conditions for effective cooperation, including appropriate dialogue structures and shared project culture. For businesses, territorial engagement represents more than CSR - it constitutes a strategic investment that can reduce transaction costs, facilitate access to local resources, and enhance territorial attractiveness.

ESSEC's four decades of research in this field have not only advanced academic understanding but also provided practical insights for business leaders and policymakers. The Urban Economics Chair's work demonstrates how rigorous academic research can inform effective territorial development strategies, particularly in an era where sustainability imperatives demand new forms of public-private cooperation.

Looking ahead, the concept of CTR becomes increasingly relevant as territories grapple with social inclusion, environmental transition, and economic resilience. The Chair's research suggests that success in addressing these challenges will depend largely on the ability of territories to foster productive partnerships between public and private actors, guided by a shared understanding of territorial responsibility. Successful implementations typically include the creation of territorial economic councils that bring together business leaders, elected officials, and civil society representatives on a quarterly basis to align development priorities and coordinate investments. Another effective practice involves the establishment of jointly funded territorial promotion agencies, where governance is genuinely shared between public and private stakeholders rather than merely consultative. 

Businesses can demonstrate territorial responsibility through participation in localized employment platforms that connect educational institutions with employers to address skills gaps and reduce structural unemployment. Collaborative innovation districts, where public actors provide infrastructure while businesses contribute expertise and investment, exemplify mutual value creation. Resource pooling for shared services among businesses in industrial zones, facilitated by public authorities, represents another practical application. Joint public-private territorial marketing strategies, where both sectors contribute to crafting and financing a cohesive territorial brand, strengthen regional competitiveness. Finally, cooperative urban revitalization projects, where businesses invest alongside public redevelopment efforts, particularly in distressed neighborhoods, demonstrate how territorial responsibility can address both economic and social challenges simultaneously.

This body of work represents a uniquely French contribution to global discussions about sustainable urban development, while also reflecting ESSEC's distinctive approach to business education - one that emphasizes the interconnection between corporate success and territorial wellbeing. As the school advances its Transcend strategy, the Urban Economics Chair's research on CTR provides a compelling example of how academic institutions can bridge theoretical understanding and practical impact in service of sustainable development. 

Bibliography

DEQUEKER E. (2020), "Paris and London: metropolitan dynamics and economic governances (1990-2017)", PhD Thesis supervised by Michael Storper, Sciences Po Paris School of Research, 441 p.

DEQUEKER E. (2024), "L'interaction public-privé dans le Grand Paris et le Grand Londres au prisme des écosystèmes de promotion économique", Transversalités, 2024/1, n.168, pp. 47-68

ESSEC – Chaire d’économie urbaine (2025), "La Responsabilité Territoriale de l'Entreprise", Cahiers de recherche de la Chaire d'Economie urbaine de l'ESSEC, n.1, janvier 2025, 102 p.

ESSEC - Chaire d'économie urbaine (2018), "Dynamique des villes et Responsabilité Territoriale de l'Entreprise (RTE)", rapport réalisé pour le Commissariat général à l'égalité des territoires (CGET) et pour l'Institut CDC pour la Recherche, 124 p.

SALLEZ A. (1998), "De la dynamique des villes au diagnostic urbain", Communication au 37ème colloque de la Western Regional Science Association, Monterrey (Californie), 26 p.

VALLERUGO F. (2013), "La gouvernance du Grand Paris au service de sa compétitivité", Numéro spécial Grand Paris de la Revue d'Économie Régionale & Urbaine, 2013/3, pp. 587-611

*The Chair’s research originated from the pioneering work of Professor Alain Sallez on business location theory. As the founding holder of ESSEC's Urban Economics Chair in 1987, he developed the initial framework for analyzing urban dynamics through the lens of business location decisions and their socioeconomic impacts. This work was later expanded by Professors Franck Vallérugo and Patrice Noisette, who developed a typological analysis of urban dynamics on the main 227 functional urban areas (aires urbaines / aires d’attraction des villes) that has become the cornerstone of the Chair's research methodology.