Responsible Saving: A Study Reveals Surprising Trends

Responsible Investing in France: A New Study Reveals That 87% of Certified Investment Funds Invest in Fossil Fuels

Epsor, a company specializing in employee savings and retirement plans, has published its latest annual study on French investment funds. The study provides a detailed analysis of more than 800 certified and non-certified funds, revealing surprising trends in the investment world.

In 2022, despite a market environment favorable to companies in the energy sector, a concerning trend emerged. Not only were fund managers drawn to the major oil companies, but this trend also affected certified funds. The main findings are as follows:

87% of certified funds invested in at least one company in the fossil fuel sector, marking an increase from the previous year (80% in 2021). Certified funds’ exposure to fossil fuels increased by an average of 29% over the course of a year, rising from 4.7% to 6.1% in 2022.
TotalEnergies became the second-most-funded company in non-labeled funds and the fourth in labeled funds, with a significant increase in investment.

Nearly 1.6 billion euros—an 80% increase over the past year—have been invested in TotalEnergies, representing 1.49% of the total assets under management of the funds included in the study.

Increased support for sustainable sectors

Despite the increase in investment in fossil fuels, the study reveals a surprising paradox. In 2022, certified funds also showed increased support for companies in sustainable sectors. The key points are as follows:

The share of investments in companies in green sectors—such as renewable energy, green transportation, and energy efficiency—rose from 11.5% in 2021 to 14% in 2022, compared with 11.5% in funds without a green label.
 

Less investment in companies in controversial sectors such as GMOs, pesticides, and palm oil.
 

Certified funds have an average carbon footprint that is 17% lower than that of non-certified funds, amounting to 121 metric tons of CO2 per 1 million euros in revenue.

The SFDR (Sustainable Finance Disclosure Regulation) is expected to become more stringent, which has already led to the downgrading of many funds. Article 9 funds have been downgraded to the Article 8 category in anticipation of the new technical requirements that took effect in January 2023. At the same time, an overhaul of the SRI (Socially Responsible Investment) label is being considered, with stricter criteria, including the exclusion of companies that derive a significant portion of their business from coal or unconventional fossil fuels.

Julien Niquet, president of Epsor, stresses the need to raise regulatory standards to ensure greater transparency for investors in light of the climate emergency.