France's market for socially responsible investments in retail surges to €29.4 billion
In 2024, retail social impact investment in France has experienced a significant increase, reflecting a broader trend towards sustainable and impact investing across Europe and the globe. This growth aligns with the UN Sustainable Development Goals (SDGs), as investors seek financial returns combined with positive environmental and social impacts.
Channels of Savings
The growth in retail social impact investment is channeled through various avenues. Private equity impact funds, for instance, target companies providing innovative solutions to environmental and societal challenges, using "acceleration capital" for sustainable economic transition. Sustainable and ESG-focused funds, which invest in companies prioritising Environmental, Social, and Governance (ESG) criteria, have also seen growing assets. Green bonds and sustainable loans offer retail investors opportunities to invest in projects with environmental or social benefits.
Moreover, retail investors can access sustainable finance products and reporting through platforms and capital markets, with initiatives like Euronext's strategic plans to empower sustainable investment by expanding sustainability-focused products. Real estate and retail sector investments, while specific to real estate, are strengthening, creating indirect social impact investment opportunities.
Impactful Results
This shift in investment patterns has led to more retail investors channeling savings into impact funds, ESG mutual funds, green bonds, and private equity structures that focus on measurable social and environmental impacts. In 2024, retail social impact savings and investments increased by €2bn, bringing total retail social impact finance to €29.4bn.
The increase has resulted in meaningful outcomes. Over 3,000 people were rehoused, 168 farmers were supported, and 21,000 jobs were created or maintained. 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 these achievements.
Looking Forward
Despite the progress, Julia Robin, advocacy officer for FAIR, emphasised the need for more investment to address social inequality and environmental challenges. Raising awareness among the general public and distributors offering these products remains central to dispelling misconceptions and showing that returns and impact are not mutually exclusive.
Patrick Sapy, CEO of FAIR, expressed enthusiasm for solidarity-based products remaining strong. Employee savings schemes, which make up 60% of France's social impact finance, grew by 6% over the year, with a net inflow of €600m. Direct investments into social enterprises, the smallest channel, grew by 10% to €1.2bn.
In conclusion, the growth in retail social impact investment in France in 2024 represents a step forward in aligning financial returns with positive environmental and social impacts. As awareness and understanding of these investment opportunities increase, it is expected that this trend will continue to gather momentum.
- Retail impact investing, bolstered by rise in private equity impact funds and sustainable ESG funds, now offers retail investors the potential to contribute to sustainable economic transition.
- The unprecedented growth in retail social impact investments, particularly in impact funds, ESG mutual funds, and green bonds, has induced significant social and environmental changes, contributing to the rehousing of over 3,000 people, supporting 168 farmers, and creating or preserving 21,000 jobs in 2024 alone.
- Future expansion of these initiatives in France and across the globe will necessitate raising awareness among the general public and investments in social enterprises to ensure the progress made in integrating personal finance with social impact continues.
