Sustainable finance serving ecological transition, fundamental rights respect, social development and competitiveness
The success of the ecological transition requires mobilization of significant financing, including long-term and private funds. In a context of a generalized financial crisis and limited public resources, it requires the implementation of innovative financial instruments that will come in complement of conventional financing instruments. Preserving corporate competitiveness involves financial support to promote their development and economic resilience in the long term, particularly through fostering innovation. SRI is one of these levers for innovative financing.
Socially Responsible Investment (SRI) is the most well-known form of sustainable or mutually supportive financing. It consists for investors in taking into account "extra-financial" criteria: environmental, social and governance (ESG approach).
For ten years, SRI has known in France an important development. In 2011, its assets increased by 70% compared to 2010, to reach 115 billion Euros. Since 2001, incentive public policies have contributed to this development.
The first legal provisions regarding socially responsible investment date back to 2001. The Act of 19 February 2001 on the generalization of employee savings introduced an incentive into the Monetary and Financial Code for managers of employee savings funds to take into account environmental and social criteria in their asset management policy.
The amended Article 224 of the Act of 12 July 2010 on the national commitment to the environment, as well as its implementing decree of 30 January 2012 on information provision by Asset Management Companies (AMCs) on social, environmental and governance criteria taken into account in their investment policy, subject these companies to new customer information requirements and define a presentation framework. AMCs must specify how they deal with sustainable development criteria concerning environmental, social and governance goals (“ESG” goals) in their investment and voting policy.
One of the work objectives defined following the September 2012 Environmental Conference for the Ecological Transition was the creation of an official SRI certification label to complement the facility created by Article 224 of the Grenelle II Act and better guide investors to choose funds promoting environmental and social responsibility.
In addition to regulatory action, public authorities encourage initiatives by SRI stakeholders in coherence with the principles and policies they promote. A pioneering role is played by public pension funds such as the pension reserve Fund (FRR) or the Additional Civil Service Pension Establishment (ERAFP).
Updated on: 12.02.13