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September 20, 2000
French Social Investment Poised for Rapid Growth
A rush of socially responsible mutual funds and a pending pension law stand to boost social
investing in France.
SocialFunds.com --
Social investing movements in other countries have very different histories and distinct
personalities from that in the U.S., where decades of development have resulted in a recent growth
spurt. In France, which has only discovered socially responsible mutual funds in the last two
years, that history is best summed up by the word "explosive."
 In two short years, French financial groups
have introduced 20 socially screened mutual funds managing over $600 million, overshadowing the
mere 200 percent growth in the U.S. over the same period. Social investing in France is an emerging
market representing tremendous potential growth, attracting the interest of both businesses and
investors.
"When in 1998 we carried out a major assignment for the Schneider Group, a
French electric distributor, we became acutely aware of the link between employee satisfaction and
shareholder satisfaction," said Eric Loiselet, Founding Partner at Terra Nova Conseil, a French
management consulting firm. "Moreover, our intuition was confirmed when we discovered that one of
the shareholders was a U.S. socially responsible fund."
Terra Nova has been active in the
promotion of socially responsible investing since 1998, attending international conferences and
translating key references on U.S. social investment into French. The company has been instrumental
in the establishment of a French Social Investment Forum, to be effective by the end of the year,
and publishes "SRI in Progress," a quarterly on-line newsletter on social investing in France and
Europe, available in both French and English.
Among the recent new offerings in social
investing, Banques Populaires Group launched its first socially screened fund in March, called the
Fructi Capital Ethique Fund. The fund selects French and European companies on the basis of five
social and environmental criteria defined by ARESE, the first and only French social and
environmental rating agency.
Along similar lines, Credit Mutuel de Bretagne launched a
socially responsible mutual fund called Fédéral Actions Ethiques, Apogé launched one called
Actisocia Europe, and Groupe Caisse d'Epargne launched one with the enticing name, 1,2,3...Futur.
In May, AXA Gestion Intéressement launched an ethical fund dedicated to job creation support,
called Capital Emploi Croissance, and the list goes on.
But if the burgeoning number of
funds is the fuse of socially responsible investing in France, a pending bill in Parliament will be
the lighted match. In October the French government plans to file new legislation on Employee
Savings Plans will initiate a whole new market, of which socially responsible funds are expected to
take a significant portion.
The new law, which is to be implemented by January of next
year, will allow for long-term savings opportunities comparable to pension funds, with a potential
$4.5 billion in annual investments. A board composed of more than 50 percent of employees, most of
them trade union members, will manage the new "co-managed employee savings plans" for each company,
adding to the socially responsible focus of the plans.
"We are convinced that a major
portion of Employee Savings Plans could be invested in a socially responsible manner," said
Loiselet. "There is a true need in France to link consumerism, values, and savings behavior. As in
the U.S., a growing portion of the French population is interested in socially responsible
investing."
Terra Nova Conseil is ideally positioned to provide educational and business
services to the future Employee Savings Plan fund managers interested in social investing, and to
introduce international products to this exciting new market. At the current rate of expansion,
France will likely be a major player in international social investing in the coming years and one
worth watching.
©
SRI World Group, Inc. All Rights Reserved.
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