Would you like to invest in sustainable and ethical funds, but aren't sure you can trust them? This article is for you.
Why choose a durable bottom? What are the selection criteria? And many other points will be covered in this article.
1. Why a durable background?
To achieve the European ecological ambitions of the Green Pact, a new financial regulation is under construction: the taxonomy. It will’identify sustainable activities for direct investment towards «green» activities.
This European taxonomy classifies economic activities that have a positive impact on the environment. Selected activities must meet at least one of the 6 environmental criteria (such as adaptation to climate change, water protection, waste treatment, biodiversity), without compromising any of the other criteria.
2. What are the different selection criteria?
The aim of the new regulations is to direct as much capital as possible towards sustainable investments, with as much transparency as possible. And good news! As an individual, you also have access to these new investments. In fact, your savings can be invested in financial funds that meet the taxonomy's criteria.
To do so, 3 categories of investment funds have been identified by the taxonomy according to their requirements:
- Article 6 : includes all funds
- Article 8light green« funds: meet classic ESG (Environmental, Social and Governance) criteria.
- Article 9dark green« funds: sector and thematic funds invest in companies that have a strong positive impact on climate and social objectives.
3. Would you like to invest in one or more sustainable funds?
Focus on «Article 8» funds: ESG criteria
By choosing an SRI (Socially Responsible Investment) fund, you are committing yourself to an approach designed to apply the principles of sustainable development to investment. The choice of an investment will not only be dictated by short-term financial considerations, but will also take into account extra-financial criteria, the ESG criteria:
- E for the respect of’Environment
- S for the Social and employee well-being in the workplace
- G the right one Gopen governance within the latter
An additional criterion can be added: respect for human rights (combating poverty, etc.). Article 8« or SRI funds then respect at least one of the ESG criteria, such as respect for the environment or good corporate governance. This approach is a first step towards more sustainable investment of your savings.
Focus on article 9 funds: impact funds
If ESG criteria aren't enough for you, you can go one step further by using impact funds, sectoral or thematic. It is then possible to exclude certain areas of activity from one's stock portfolio (such as arms, tobacco, nuclear power, etc.) and focus on the following to a more specific investment theme (for example, investing in funds that are primarily involved in water protection).
These thematic funds respect article 9 of the taxonomy.
Focus on existing products
While we wait for the taxonomy's criteria to be put in place, to be as precise as possible, and for companies to assess how they correspond to European criteria, for the time being you can turn to sustainable funds the ecolabels. These labels were created to guarantee investment in activities with a reduced impact on the environment.
They are based on the following principles: (source : www.ecolabel.eu)
- precise criteria and thresholds
- criteria developed in consultation with manufacturers, distributors, environmental and consumer associations
- freely consultable specifications
- regular review of criteria
- certification by an independent body
They exist exclusively for the environment, social issues, etc. Choosing a fund that complies with a label of your choice is also an opportunity for thematic or impact investing, thanks to these ecolabels. In France, you'll find the Greenfin for the environment, for example, and in Germany the FNG, very exclusive and selective.
4. High-performance financial investments
In the wake of the various crises we have experienced (Covid, war in Ukraine), it seems that SRI funds have held up better and are therefore increasingly popular.
What's more, they now rival «classic» or traditional funds in terms of performance, with equivalent or even superior returns depending on the field.
The choice is yours!
Depending on your sensitivities, wishes investment and preferences, You can invest in high-performance sustainable funds that meet all your criteria.
If you want to invest in a sustainable economy, don't hesitate to contact us ! We'll work with you to find the best investment for your savings. taking into account your own criteria and selections, not to mention your sensitivity to risk, which we also take very seriously.
You can invest in SRI funds for your retirement, either directly or through life insurance.
