Insights from France: governmental interventions to enhance SRI

An analysis of the French government's contributions to its rapidly growing SRI market.

In recent years, France became one of the most dynamic European markets for socially responsible investment (SRI).

In 1997, only 7 asset managers supplied a marginal amount of SRI products; whereas in 2012, 53 asset managers (including the largest, Amundi) were actively involved in the management of more than 250 SRI products. Between 2012 and 2017 and, in particular, since 2013, the SRI market in France grew exponentially in terms of AuM subject to ESG criteria (from €200bn to €322 billion) and the number of new SRI funds created grew from 250 to 439 funds.

How has the French government contributed to the spectacular upscaling of sustainable finance in recent years? What role did policy-making play in stimulating or accompanying the development of the French SRI market?

Although commentators usually attribute this mainstreaming to aggressive policy-making, and in particular the Article 173-VI – which remains to date one of the most ambitious regulations of climate change reporting – our historical and qualitative analysis of the French SRI market (1997-2017) suggests that these recent changes reflect deeper transformations in the modes of governmental CSR interventions, capitalise on a legacy of at least twenty years of regulatory activities, and should be analysed in light of the multiple interactions between governmental interventions. 

We present these insights, and then discuss two of their key implications of policy-making, namely that;

  1. there is no silver bullet in the domain of SRI policy-making as interactions between multiple interventions should be diligently orchestrated to enhance their overall market impact;
  2. financial markets have become a key regulatory space for promoting socially responsible behaviour.

Reinventing Governmental Interventions: Blending Steering and Rowing

Traditionally, studies of regulative capitalism have distinguished two type of governmental interventions: steering and rowing. Steering relates to “governing by setting the course, monitoring the direction and correcting deviations from the course set” (Crawford, 2006: 453), and is regarded as governmental actors’ prerogatives. 

Rowing interventions, on the other hand, relate to the enterprise, products and service provision, and are usually handled by private actors. In line with other critical voices, our analysis of governmental interventions in the French SRI market suggests reconsidering this dichotomy as well as the neat sharing of tasks between private actors and governments it involves.

We found that even in a state-driven context such as France, governments move beyond steering through the active mobilization of state-owned organizations—a process that we labelled delegated rowing—or the capture of labeling initiatives developed by other actors—which we refer to as microsteering, as it corresponds to a form of governmental micro-management which takes place at low cost, by steering actors through specific devices such as labels.

Governmental interventions such as delegated rowing and microsteering recombine rowing and steering in an unprecedented manner, offering a more nuanced and blended approach to interventions.

The creation of a SRI label by the French government, offers a case in point of the blending of traditional rowing and steering, and the parallel blurring of private and public roles it involves. 

In order to create this public SRI label, the government enabled and organized deliberations between private actors, specified the criteria of the label to be implemented by private investors, and defined which private auditors were allowed to audit this label while formally remaining the owner of the label.

Capitalising on Pre-existing and Co-occurring Interventions: Layering and Catalysing

Our analysis also shows that innovative regulations such as the Article 173-VI do not appear in an institutional and legal vacuum, and suggest that their effectiveness is closely related to their interactions with prior or co-occurring governmental CSR interventions in domains such as corporate ESG reporting or state-owned pension fund management. 

On the one hand, we identified a mechanism of layering, which reflects governmental entanglement within a legacy of CSR regulations, as it suggests that governments can accumulate regulative components of an institutional puzzle waiting to be assembled.

In the French case, there were no omniscient technocrats with a 20-year regulatory “grand plan”. Rather, successive governmental CSR interventions designed the pieces of a multisided regulatory puzzle and, in so doing, developed the breadth and depth of the French SRI market.

On the other hand, catalyzing reflects a more pro-active approach to governmental regulation, as it involved leveraging market actors’ power through the alignment of their interests within a predefined regulatory context. 

In this regard, catalyzing consisted of French governmental actors purposively adding the last decisive regulatory pieces to the puzzle—through dedicated and targeted interventions—to trigger mainstream acceptance.

The mobilization of actors around the creation of the SRI public label and the drafting of Article 173-VI is a good example of the pro-active needed to achieve catalyzing. 

From 2012, the French state – through the Ministry of Environment and soon after the Ministry of Finance – engaged in the analysis of how to facilitate the energy transition, which led the state to take a special interest in what had been developed by asset managers, public asset owners, and service providers who were engaged in SRI. 

As one of our leading asset manager interviewees involved in this deliberative process recognized, the French government “was smart”, as it “met with all the SRI players and got them to talk about all the pioneering things they were doing”; the passage of Article 173-VI and the operationalization of its decree were organized through an ongoing dialogue with investors. 

Eventually, between 2012 and 2017, the French state pro-actively captured the previous trade union and state-related agencies’ efforts to create a label for SRI products and fast-tracked the passing of the pioneering Green Law Article 173 regarding climate change reporting. 

The latter was enhanced by the prominence of ESG issues and the finance sector in the twenty-first conference of the parties (COP 21) and was confirmed by the launch of the Paris Climate Change agreement in mid-December 2015.

In the space of only 4 weeks, the French state and its ministers released 3 ground-breaking application decrees for the public ecological transition label (10 December, 2015), Article 173-VI (29 December, 2015), and eventually for the public SRI label (8 January, 2016).

First Implication: A Need for Governmental CSR Interventions “Orchestration”

A first implication of our analysis of the French case is that a government mindful of the interactions produced by its CSR interventions can “orchestrate” its policies to maximize its influence on business actors.

 In line with prior political studies, we found that orchestration is relevant to making sense of the regulatory efforts of governments, such as the French government, which can and do engage in orchestration work; by regulating – in part – through a reliance on intermediary organizations (delegated rowing), or the creative capture and shaping of standards or labels (microsteering). 

While subjected to a path-dependency effect, this governmental orchestration work can be deployed by a pro-active government, which seeks to maximize the impact of its CSR interventions while keeping their costs down (that is, most of the rowing costs are covered by intermediaries).

Eventually we found that orchestration can result from part-emerging and part-purposive interventions that together enhance the effects produced by the coexistence of distinct governmental CSR interventions within the same policy mix.

Second Implication: Financial Markets as a Space for Governmental CSR Interventions

Finally, our analysis brings financial markets back into the scope of governmental studies of CSR by showing how financial markets became a relevant space for governmental CSR interventions, notably through the development of robust national SRI markets that pressure investors, as well as their investee companies, to adopt socially responsible behavior. Considering financial markets is crucial given their weight in national domestic policy making and the restrictions that may be imposed on governmental capacities to promote CSR. 

Neglecting finance as a “regulatory space” can misrepresent governmental capacities to regulate CSR given how financial markets weigh on governmental choices and policies.

Our analysis also shows notably the value of recognizing the importance of crucial yet often neglected categories of financial market intermediaries: State-owned, state-designed, and/or state-regulated banks, pension funds and/or financial intermediaries. In the French case, through delegated rowing, the government has actively reoriented a major state-regulated financial actor – the CDC – that has itself financially supported CSR and SRI rating agencies; and the purposive design of SRI-focused public pension funds has also created important peer pressure for SRI activities in the market. 

Accordingly, delegated rowing within the financial markets prepared other mainstream private financial actors for SRI acceptance, which occurred through further regulatory steering and microsteering types of interventions. 


Stéphanie Giamporcaro*, Nottingham Trent University, University of Cape Town. Email:

Jean-Pascal Gond, City, University of London. Email:

Niamh O’Sullivan, University of Nottingham. Email:

* Corresponding author

Long summary of the paper published by Giamporcaro, Gond and O’Sullivan’s (2019) in Business Ethics Quarterly. 

Figure 1. Overview of the Development of the French SRI Market (1997-2017)

 Source: 1) 1997-2001: Muet et al. (2001) report, and secondary sources for the number of funds; and 2) 2003-2018: 2a) Novethic, (2003 to 2015) – annual survey of SRI in France, and survey on a different perimeters for the AuM. 2b) Since 2016, Novethic produces a more focused survey of “so-called” high-impact SRI funds, i.e. SRI funds that obey the strictest definition and standards of SRI practices. Please note: We do not report the SRI AuM for the years 2016-2018, because Novethic has changed its perimeters of SRI evaluation. We thank Novethic for their support in checking the figures used to build this graphic.