French ESG assets reach €746bn in 2015

French assets managed under strategies applying environmental, social and governance (ESG) criteria guidelines have hit €746bn in 2015, up 29% year-on-year (€578bn in 2014)

The figure has been recently released in the annual report of French SRI research center Novethic and the Forum pour l’Investissement Responsable (FIR).

Novethic assesses some €542bn of these ESG assets have little impact on investors portfolios as they are invested in strategies that exclude less than 25% of stocks on a ESG basis.

Some €150bn of assets have a significant impact on investors portfolios as they are managed under strategies applying best-in-class selection and excluding 25 to 50% of stocks on a ESG basis.

The remaining €54bn have a highly significant impact. These assets are invested in strategies that rely on a strict best-in-universe selection.

Per asset class, French ESG assets are invested primarily in bonds (75%) then equities (20%), money market funds (3%), real estate (1%) and other investment solutions (1%).

Novethic’s study shows a net dominance of institutional investors, holding 90% of assets invested into ESG-compliant strategies.

The carbon footprint reporting obligation for French institutional investors, voted in a law setting up the energy transition in France in 2015, coupled to the COP21 momentum have boosted green and low carbon investments in the country.

French institutional assets invested in green and low carbon investments have therefore hit €20.2bn last year against €3.8bn in 2014.

Regarding thematic environmental strategies, they gathered €43bn of assets at the end of 2015, of which 34% were exclusively invested in green strategies.

Novethic notes thematic strategies arouse the interest of retail investors since they held one third of assets invested in 2015.

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