Never before has sustainable investing been so popular — this is also the case in France. It is high time to delve deeper into this phenomenon.
Sustainable investing is an investment strategy that focuses not only on financial returns, but also on social and ecological impact. So it starts with determining how you can and want to contribute to sustainability, and what your financial goals are. Then look for investment products that match both your sustainable and financial vision.
Please note: A term that is often mentioned in the same breath when it comes to sustainable investing is 'green investing'. However, green investing is not the same as sustainable investing. Both are sustainable, but only through green investing can you benefit from certain tax benefits. Green investing is done through so-called ‘green funds’. In this article we only focus on sustainable investing.
Sustainable investing is important because it goes beyond just making money: it's like investing in a better future for everyone. When you choose sustainable investments, you focus on companies that are committed to environmental conservation and that take their social responsibility. It is a way to combine financial success with positive changes in the world.
Sustainable investment products go further than just making a profit, to drive positive change. Consider, for example, companies with a strong focus on environmental friendliness, social responsibility, and good governance. A concrete example of this is investing in a company that focuses on developing sustainable energy sources, such as solar or wind energy. In short, sustainable investments strive to combine financial success with a positive impact on the world.
In sustainable investing you often come across abbreviations such as ESG and SRI. ESG stands for Environment, Social, and Governance. This means that when assessing investments, we look at how a company deals with environmental issues, social responsibility and good governance. Companies are often assigned an ESG rating, which should give the investor an indication of their level of sustainability.
SRI stands for Socially Responsible Investing, i.e. investing with a focus on social responsibility, through investments that contribute to a positive social impact and respect ethical values.
In addition to ESG and SRI, there are also a number of other relevant abbreviations within sustainable investing. For example, a common term is ESGR, where the 'R' stands for 'Risk'. This emphasizes the importance of evaluating risks in the areas of environment, social policy, good governance, and finance. Another term is SDG, which stands for Sustainable Development Goals. This refers to the 17 goals set by the United Nations to promote global sustainable development. The above classifications can help you find sustainable investment products.
If you are looking for sustainable investment products, there are several options available on the market. We'll go through them below.
One option is to invest in sustainable stocks, choosing companies that are not only focused on profits, but are also actively pursuing environmentally friendly practices and reducing their own carbon footprint. Companies often receive a certain ESG rating, which you can easily find online or in your broker. For example, a company dedicated to producing solar energy panels or a company committed to reducing their own plastic waste through recycling. Read more about how to invest in the stock market here.
A second option is investing in sustainable ETFs (Exchange-Traded Funds), which are investment funds that track a specific index. Sustainable ETFs focus on indexes made up of companies with a known strong ESG performance, so you automatically invest in a diverse portfolio of companies that are classified as 'sustainable'. You can usually immediately see from the name of the ETF whether it is focused on sustainability (e.g. by the abbreviations ESG, SRI).
In addition to the responsible investment products we went through in this article, there are several other ways in which you can become involved in sustainable investment.
The various regulated savings solutions, such as the Livret A or the LDDS (savings book for sustainable development and solidarity), help to finance social or environmental projects. Minors can also open a PEAC (future climate savings plan). However, these offers are not the most attractive from a financial point of view.
To ensure that you are dealing with a socially responsible investment, you can also place your trust in the various labels. For example, the Greenfin label, launched by the French Ministry of Ecological Transition following COP 21 guarantees the sustainability of an investment fund, by excluding those that continue to invest in unsustainable sectors. Other labels you might be interested in for sustainable investment are the Finansol label, which guarantees that part of the sums deposited are invested in projects with a social and environmental impact, and the FPCV label (participative financing for green growth).
Risk Disclaimer – There are risks associated with investing. The value of your investment may fall or rise. Losses of the capital invested may occur. Past performance, simulations or forecasts are not a reliable indicator of future performance. We do not provide investment, legal and/or tax advice. Should this website contain information on the capital market, financial instruments and/or other topics relevant to investment, this information is intended solely as a general explanation of the investment services provided by companies in our group. Please also read our risk information and terms of use.
