Infotech The responsible finance boom

The responsible finance boom

Should we dare the Stock Exchange?

Since 2020, the stock markets have attracted 400,000 additional shareholders. But savers need to measure the risks. So how do you invest? In what titles? And according to what criteria? Follow the guide of “Obs”.

Even if it means earning little, you might as well invest your money in the service of the general interest. This is what many savers have said to themselves recently. In fact, the enthusiasm for so-called responsible funds is growing: 560 billion euros invested in 2020, or 24% of the total assets of collective management funds. The attractiveness of households and investors is such that the annual subscription rate for this type of investment is now higher than that of comparable products that do not bear the “responsible” label.

The sequel after the advertisement

Individuals turn above all to the three public labels, foremost among which is “SRI” finance (translate: socially responsible investment). In one year, the collection of these funds increased from 88 billion to 230 billion euros at the end of 2020! The principle ? These funds must reconcile financial performance with a positive impact on society and the environment. For that, it is a question of selecting in priority companies contributing to a sustainable development of the economy. Subscribers motivated by this ethical objective are not losing out. Because the performance of SRI funds on the stock market has nothing to envy that of traditional funds, they are sometimes even better: until June 2020, their averages were almost identical; in the second half of the year, SRI funds are doing better.

A more or less severe selection

The method is not without its criticisms, however. It consists of excluding from the portfolio the companies with the lowest ratings with regard to extra-financial criteria known as “ESG” – for environment, society and governance (of the company). A mixture, therefore, of “sustainable” objectives and criteria of progressive management. But the management companies that carry out this skimming do not all demonstrate the same requirements. Result: some SRI funds do not all correspond to the idea that the average saver can have of an ethical investment. Some, for example, contain some of the most polluting industries in their portfolio, and even arms manufacturers! Others, on the other hand, are extremely severe in their selectivity. This is why the SRI label is currently being reformed with a view to becoming more transparent. Objective: to consolidate the confidence placed by savers in these products.

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Another popular label: Greenfin. It is only allocated to funds financing companies very involved in the energy and ecological transition. It has the particularity of excluding funds that invest in companies operating in the nuclear sector and fossil fuels. The real positive impact of a Greenfin fund is a priori acquired. But it is much less widespread than the SRI label: Greenfin funds today total only 20 billion euros.

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