Bruno Le Maire and Olivia Grégoire launch the reform of the Socially Responsible Investment (SRI) label
In order to launch the process of renovating the Socially Responsible Investment (SRI) label, Bruno Le Maire, Minister of the Economy, Finance and Recovery and Olivia Grégoire, Secretary of State for Social, Solidarity and Responsible Economy, initiate a consultation on the evolution of the governance of the SRI label.
The SRI label is one of the leading labels in Europe, as evidenced by the constant growth of the number of labeled funds. As of March 8, 2021, 690 funds have received the SRI label for a total of nearly 470 billion euros according to the latest data from the French Ministry of the Economy and Finance.
This label contributes to the evolution of finance towards a more transparent socially responsible management. The success and momentum of the SRI label, encouraged by the Pacte law of May 2019 with the systematic listing of SRI-labeled funds in life insurance units of account and retirement savings plans, will be continued and accentuated.
In July 2020, the second version of the specifications defined new requirements for SRI-labeled funds in terms of transparency and performance improvement of the portfolios under management with ESG considerations. However, the report submitted by the IGF last January 2021 offers twenty recommendations for further development of the SRI label and thus to contribute to the refinement of the responsible savings offer while meeting the expectations of the savers.
These objectives involve, in particular, renovating the way its governance operates and continuing to improve the specifications over the next twelve months. During its assessment mission, more than fifty actors from the financial sector were heard (federations, management companies, non-financial data providers, certification bodies, NGOs, etc.) as well as members of the SRI label committee and the administrators of other European savings labels.
The IGF report underlines the need to continue strengthening the requirements of the label, so as to meet the expectations of savers and investors and to accentuate its action in terms of orienting savings towards the financing of a more sustainable economy.
« Unless it changes radically, the SRI label is exposed to an inevitable loss of credibility and relevance. Notwithstanding its quantitative success, it has intrinsic weaknesses which hamper its adaptation to a rapidly changing market. Indeed, the SRI label makes a confused promise to the saver. Its ambition is to have a social and environmental impact, but its requirements, based on the ESG rating of issuers, cannot guarantee effective funding towards activities under a sustainable economic model. (…)
The need for a label is shifting into the realm of extra-financial materiality. It is about offering the investor, in addition to the financial return, an effective contribution to sustainable development, for example measured from the alignment of investments with the United Nations Sustainable Development Goals (SDGs). »Report of IGF
Bruno Le Maire, Minister of the Economy, Finance and Recovery, and Olivia Grégoire, Secretary of State for Social Economy, Solidarity and Responsibility, are therefore launching a consultation on the evolution of the governance of the SRI label.
This consultation will be followed, in April, by the launch of a call for expressions of interest intended for market structures specialized in environmental, social and governance criteria (ESG) that could be interested in hosting the team that will constitute the secretariat of the SRI label committee.
« In 2016, we made the choice of a place label, inclusive and innovative, oriented towards good governance and shareholder engagement. Thanks to this approach, the SRI label has been a success. I would like to thank Nicole Notat and the members of the SRI label committee for their fruitful work over the past five years. We wish to consolidate the label by continuing to adapt it to the new expectations of savers and investors. I hope that the SRI label will remain in the years to come a decisive instrument for the mobilization of the savings of the French in favor of the financing of a more sustainable economy. »Bruno Le Maire, Minister of the Economy, Finance and Recovery
Following the establishment of new governance, consultations will also be carried out very soon with all stakeholders to assess the proposals in this report with regard to the content of the future repository.
The IGF report is available here
Article : Joana Foglia – Sources : Rapport IGF, MINEFI