In an important move toward bolstering climate-centric investment practices, France’s Minister of the Economy, Finance, and Recovery, Bruno Le Maire, unveiled a series of revisions to the French Socially Responsible Investment (SRI) label.
The SRI label was created by the French Ministry of the Economy and Finance in 2016. As the ministry explains, it is the “first state label in France allowing the general public to choose savings vehicles integrating environmental, social and governance principles into their management.”
According to the French ministry, there are currently 1,174 funds with €773 billion in assets using the label, and the funds are “systematically referenced in life insurance units of account and in retirement savings plans.”
The new updates, announced on November 7, aim to enhance the label’s rigor and environmental focus. The updated label will impose stringent criteria, “making climate impact a key principle of the label.”
Importantly, the updates would exclude some fossil fuel companies from SRI-labelled funds.
“[T]he eligibility of funds will exclude companies that exploit coal or unconventional hydrocarbons, as well as those that launch new hydrocarbon (oil or gas) exploration, exploitation or refining projects,” the ministry reveals in the press release announcing the move.
The revamped standards will also demand that companies included in SRI-labelled funds devise a transition plan aligned with the Paris Agreement.
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This update follows Minister Le Maire’s establishment of a committee in 2021, tasked with fortifying the SRI label’s ambition and criteria. As the ministry explains, the committee was created because the label criteria had not been “significantly revised” since the label’s inception in 2016.
According to the ministry, the updated SRI labeling standard is set to be published later this month and will come into force on March 1, 2024.
Emphasizing the significance of these revisions, Minister Le Maire asserted:
“We must offer a simple and effective label to allow the French to give meaning to their savings. This is what we are doing with this new ISR label, in which the fight against global warming is becoming essential. We will thus allow savers to take into account the ecological transition and businesses to finance their decarbonization more easily.”