Socially Responsible Investment will give meaning to your savings. What is its principle? You invest your money in companies or activities that meet social, environmental or ethical criteria.
-7%, is the historic drop in consumption recorded in France in 2020. As a result of the uncertainty created by the health crisis and the many restrictions that have hampered holiday, leisure and shopping plans, this collapse in consumption has, at the same time, enabled households to save record amounts.
More than €26 billion for the Livret A alone in 2020, i.e. double that of 2019. Taking all vehicles together, Banque de France anticipated a savings surplus of some €130 billion at the end of 2020 compared to a year without a pandemic.
At first sight, if not to support the national economy, this shift from consumption to savings is at least good news for the environment. But only at first sight. Because the French people’s nest egg is used to finance the economy. It is therefore invested in many sectors, including those that emit greenhouse gases. But there is a very simple way to control the use of your money: opt for a socially responsible investment.
What is socially responsible investment (SRI)?
It was in the 17th century, in the United States, under the impetus of the Quaker religious community, that the concept of socially responsible investment emerged. At the time, the community decided to subordinate its investments to religious or moral criteria, by refusing, for example, to support companies producing or distributing alcohol, tobacco or weapons. The initiative, which has been widely adopted throughout the world and over the centuries, gradually evolved into the concept of Socially Responsible Investment or SRI in the 1980s.
Investment no longer based on religious criteria, but on ethical, societal and environmental criteria. Transforming the economy to meet the many demographic, social, health and environmental challenges facing the planet, is a popular idea. However, it is still struggling to gain acceptance in France.
Socially responsible investment, where do the French stand?
In 2019, according to an IFOP survey, only 37% of French people said they were aware of SRI and only 5% had tried it out .
The entry into force in 2020 of the Pact law (law for the growth and transformation of companies) is intended to change the situation. It compels all organisations issuing life insurance or pension policies to offer investments in green or solidarity finance. This is good news for the 6 out of 10 French people who say they attach importance to environmental and social impacts in their investment decisions. And this is all the more true since the financial performance of SRI products is comparable to their traditional equivalents . However, it is important to be able to find one’s way through all the investments on offer.
SRI, how to find your way around?
In recent years, many labels have been created to help investors identify SRI funds.
● Among them, the SRI label, created in 2016 at the instigation of the French Ministry of Finance, guarantees compliance with environmental, social and governance (ESG) criteria in the management of funds. At the end of 2020, 656 funds had the SRI label for a total of €350 billion in assets under management . The CIES label is specific to employee savings products and also ensures compliance with ESG criteria.
● More selective, the Greenfin label launched by the French Ministry of Ecological Transition distinguishes funds that invest mainly in the ecological transition and the fight against climate change.
● Issued by the eponymous association, the Finansol label applies to products that contribute to the financing of activities with a strong social impact in the employment, social housing, social inclusion, fair trade, organic farming or renewable energy sectors.
● Lastly, created in October 2020 by the French Ministry of the Economy in response to the health crisis, the Relance label identifies investment funds committed to supporting French SMEs.
All these labels apply to the majority of savings products: Life insurance, securities accounts, equity savings plans, retirement savings plans, individual or collective, employee savings, etc.
As you will have understood, with SRI, it is now easy to bring your financial objectives and convictions into line with each other, so that you can participate, through your savings, in transforming society, just as you do on a daily basis, through each of your consumption choices.