French finance groups back regulatory moves for single SRI label

Introduction of one standard would heighten public awareness and boost RI market, say backers.

Some of France’s most prominent institutional finance bodies have backed the creation of a single SRI label for investment products in order to unify a number of different government initiatives and existing labels. The groups, including AFG, the French asset manager’s association, Paris Europlace which promotes the city as a financial centre, and CIES, the inter-union employee savings organization, have all signed a joint letter supporting the creation of a single SRI kite-mark. The letter has been timed to coincide with the consultation period on a French government white paper for the financing of ecological transition, which calls for the creation of a single label. The third principle of the white paper, also talks of French plans to “reinforce the taking into account of extra-financial issues for ecological transition (ESG criteria) within financial companies, investors and corporates, both public and private.” The white paper follows a number of different French regulatory initiatives that have all backed SRI as a component of French government plans for more environmental and socially orientated finance. The French government proposed that asset managers should be obliged to state their ESG policies under its Loi Grenelle II proposal of 2010, France’s multi-party, multi-stakeholder body for future environmental strategy.
More recently, in June 2013, the Brovelli-Drago-Molinié report named after its three authors and commissioned by the Ministry of Economy and Finance, the Ministry of Foreign Commerce, the Ministry of Ecology, Sustainable Development and Energy, and the Ministry of Work,Employment, Professional Training and Social Dialogue, said France should introduce a state-backed SRI label and consider tax breaks for responsible investments in private equity and the country’s huge life assurance fund market. The report said a label could be based on the joint RI transparency code of the French SIF (FIR), and AFG. A CSR platform launched by French President François Hollande last year also made SRI and responsible finance one of its three main working groups. France already has several SRI labels. The best known internationally is run by Novethic, the French responsible finance media and research company, which has signed the latest joint letter. Another is overseen by CIES, which focuses mostly on employee savings plans. A standard called “Finansol” is also available for French solidarity savings funds that are invested in social businesses. Some French investment providers have also signed up for AFNOR Certification, which is a quality audit of their SRI approaches. The new letter by the financial organisations said a single label would enhance public understanding of SRI issues and could make it a sustainable finance equivalent of France’s ‘bio’ standard for organic foods. It said the new label should have qualitative and quantitative impact measures for SRI funds and aim to be broadly recognised by private and public bodies. The letter calls for the French government to outline its objective for the SRI label as soon as possible with a dedicated working group, which the signatories have indicated they would like to join.