Socially responsible investment: what are we talking about?
Socially responsible investment in France
Responsible Investment includes:
- SRI (Socially Responsible Investment) funds: "SRI is an investment which aims to reconcile economic performance with social and environmental impact by funding companies and public institutions that contribute to sustainable development regardless of their business sector. By influencing governance and corporate behaviour, SRI contributes to a responsible economy." (AFG-FIR definition, 2013);
- Funds that adopt other ESG (environmental, social and governance) approaches, such as thematic ESG funds, ESG integration funds, exclusion funds, engagement funds, solidarity funds and impact investing funds.
According to surveys published by the AFG (French Asset Management Association), the SRI management market accounted for approximately 13% of the third-party asset management market at the end of 2019—a sharp increase (+76% over three years). When other ESG approaches are included, this figure rises to 44% of the market.
In France, the prevailing approach remains the selection of companies demonstrating the best practices within their specific sector ("best-in-class"), ahead of selection based on best practices across all sectors ("best-in-universe"), the greatest improvement in practices ("best effort"), or thematic Environmental, Social, and Governance (ESG) criteria.
Socially responsible investment in Europe
According to surveys published by the AFG (Association Française de Gestion - French asset management association), the SRI management market accounted for approximately 13% of the third-party asset management market at end-2019, having grown very significantly (+76% in 3 years). If we also include the other ESG approaches, the percentage increases to 44%.
In France, the “best-in-class” approach (use of selection criteria to identify companies with the best ESG practices in their sector) is the most popular, ahead of the “best-in-universe” approach (covering all business sectors combined), the “best effort” approach (to select companies with the most improved practices) or approaches based on thematic environmental, social or governance criteria.
Quizz
Test your knowledge about SRI!
« Launched in 2010 at the initiative of the Forum for Responsible Investing (FRI), SRI Week has for the last four years been managed by the Ministry of Ecology, Sustainable Development, and Energy. Numerous actors participate alongside the government to promote awareness of this type of investment, which rigorously takes into account the issue of sustainable development, among the general public, businesses, and institutional investors. »
The entity that manages the mandatory public service additional pension scheme (ERAFP) is joining this effort and has put together this quiz as a way to answer your questions about socially responsible investing by pension funds.