Environmental

French responsible investment market grows by 29%

Novethic publishes its annual survey on responsible investment.

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Responsible investment in France has grown to reach €746bn in assets – up 29% from 2014 to 2015 – according to the annual survey on RI in France by Novethic, the French ESG research and media company, in partnership with the Forum for Responsible Investment (FIR), the French SIF. Within this number, more than €600bn represents sectorial exclusion and €200bn carbon exclusion, although definitions of responsible investment can vary from investor to investor, the survey notes.
Therefore, it divides the €746bn number into three categories that represent the different impact levels of responsible investment strategies on portfolios:

  • Limited impact (investments for which some ESG screening is applied but of which only 25% of companies have been excluded because of said ESG criteria).
  • Significant impact (where between 25% and 50% of the investment universe is excluded)
  • Very selected impact (‘conviction’, which groups together the most selective approaches to responsible investments)
    Overall, Novethic evaluated at €54bn of the total as being higher than the three main categories and having ‘very significant’ impact.The growth in the market, it said, had come mostly from the insurance sector – which accounts for more than two-thirds of the total figure, due to the conversion of traditional insurance assets into responsible investments.
    Novethic and the FIR also measured the impact of responsible investors’ climate investment strategies, based on three main themes: low carbon index funds, green bonds and thematic environmental funds for renewable energy, energy efficiency and water.
    Novethic says the strongest impact dynamic at the moment comes from green bonds. Given this – and the context of the COP21 climate talks in Paris late last year – Novethic and FIR questioned environmental funds on their climate strategies.
    Seventeen responded, saying that they understand the financial importance of responsible investment practices because of risk rather than reputation reasons. Furthermore, 22 have measured their carbon footprint and a third have already announced clear carbon reduction targets. The survey unveils that thematic investments have now reached €43bn, of which 34% are invested in exclusively green assets. Link