France's retail market for social impact investments rises to €29.4 billion
In the heart of Europe, France is witnessing a surge in social impact investment, a testament to the nation's commitment to sustainability and social equality. This transformation is being driven by a variety of channels, each playing a unique role in shaping the landscape of social impact finance.
Patrick Sapy, CEO of FAIR, has reiterated the sentiments of Julia Robin, advocacy officer for the same organisation, who affirmed that enthusiasm for solidarity-based products remains strong. This sentiment is reflected in the growth of various enterprises, including 3 Colonnes, Habitat et Humanisme, Terre de Liens, and many more, which have benefited from direct contributions.
One of the key drivers of this growth is Socially Responsible Investing (SRI). Integrating Environmental, Social, and Governance (ESG) criteria into investment choices has become increasingly popular in France. This approach, which supports companies contributing to positive environmental and social impacts, is gaining traction among investors. However, specific data on the growth of solidarity-based savings products in France is not extensive.
Employee savings schemes, such as PEAs (Plan d'Épargne en Actions), offer attractive tax regimes and can include allocations to socially responsible investments. While these schemes primarily cater to employee savings, they align with broader social policies. The focus on employee savings could lead to growth in this area, although more detailed data is needed.
Direct investment through shares and bonds in social enterprises, including green bonds, is another significant aspect of social impact investing in France. The Banque de France has shown a strong commitment to supporting social and environmental projects through direct investment channels, with a portfolio valued at EUR 10.2 billion as of December 2024.
The growing interest in social impact investing is evident in the statistics. Total investments through all three channels increased by 8% over 12 months, reaching €739m. Direct investments into social enterprises, the smallest channel, grew by 10% to €1.2bn. Employee savings schemes, which make up 60% of France's social impact finance, grew by 6%. Retail social impact savings and investments in France increased by €2bn in 2024, representing a 7% growth.
However, challenges remain. France's current political instability and economic challenges might influence investor confidence and the growth of social impact investments. Despite these challenges, the future looks promising. Julia Robin has called for more investment to address social inequality and environmental challenges, and events like the Global Social and Solidarity Economy Forum (GSEF) in Bordeaux highlight France's role in promoting social and solidarity economy practices.
Raising awareness among the general public and distributors offering these products is central to dispelling misconceptions and showing that returns and impact are not mutually exclusive. In 2024, investments improved access to essential goods and services in developing countries, with 29 microfinance institutions, agricultural cooperatives, and social enterprises financed, 6,675 people supplied with electricity from renewable sources, and 168 farmers supported.
The 23rd annual Social Impact Finance Barometre, published by France's social impact investment association FAIR and daily newspaper La Croix, provides a comprehensive overview of the current state and growth trends of social impact investment in France. With a growing focus on ESG criteria, a maturing direct investment segment, and an increasing appetite for impact-focused solutions, the future of social impact investment in France looks bright.
- The growing focus on Environmental, Social, and Governance (ESG) criteria in investment choices, known as Socially Responsible Investing (SRI), is one of the key drivers for the surge in social impact investment in France.
- To facilitate growth in the area of socially responsible investments, employee savings schemes such as PEAs (Plan d'Épargne en Actions) offer attractive tax regimes and can include allocations to socially responsible investments.
- The Banque de France has demonstrated a strong commitment to supporting social and environmental projects through direct investment channels, with a portfolio valued at EUR 10.2 billion as of December 2024.
