The SRI beyond €100bn in France
Responsible investment - 13 April 2012
The outstanding amount of the Socially Responsible Investment (SRI) increased by 69% between 2010 and 2011 in France, to reach €115bn, according to Novethic, the Research Center on the ISR and the Social Responsibility of Enterprises (RSE) of Caisse des Dépôts.
This expansion of the SRI is based on the conversion of large equity and money market funds as well as of €2.2bn invested in funds in Euros, the principal vehicle for life insurance and preferred investment of French people. In all, €24.9bn have moved from traditional management to management including environmental, social and governance (ESG) criteria of assessment.
Individual savers still represent one third of the SRI market compared with two-thirds for institutional investors. The dynamic comes from employee savings. One Euro out of four invested in employee savings schemes is now SRI. With growth of 38%, the outstandings amounted to €13.2bn at the end of 2011.
French financial players are increasingly numerous in including ESG criteria. In particular, they undertake not to invest in companies which breach international conventions on human or environmental rights.
For the first time this year, Novethic has been able to quantify the outstandings subject to these exclusions. The most frequent involve the ban on investing in companies which produce controversial arms (anti-personnel mines and cluster munitions), banned by two international conventions transposed into French law in 2010. This exclusion is currently applied to €3,221bn by 26 players.
A dozen SRI institutional investors apply a wider normative exclusion which leads them to excluding companies which do not comply with the conventions of the International Labour Organisation (ILO) about social rights or the Universal Declaration of Human Rights. Even though these bans apply to €1,823bn of outstandings, their impact remains however limited because the black lists of companies are restricted to about twenty names.