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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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