France remains bullish on SRI

SRI funds under management reached 149 billion euros in 2012, up 29% over 2011, according to the latest survey published by socially responsible investment research institute Novethic. Institutional investors held 107 billion of those assets, or 72% (up 32% vs. 2011) while retail investors held 42 billion (up 22% over the preceding year). Led by employees’ savings, France’s over-performance in the SRI retail market is unique since in Europe as a whole, the socially responsible retail market accounts for only 6% of the total. The share of employees’ savings going to SRI funds was up 30% in 2012 over 2011. Within the institutional market, delegated management (mandates given to asset managers) were up 53% in part due to the conversion to SRI funds of a private insurer’s equity. Private insurers held 45% of this market in 2012 whereas pension funds and public funds held 17% and 16%, respectively. In terms of asset allocation, bonds account for slightly more than half or 53% of total SRI assets under management (up 44% over 2011) while equity lags at 20% of total invested assets. The Euro zone concentrates the majority of assets under management, or 66% of the total in 2012. When considering investment strategies, ESG integration is clearly dominant since it applies to 96% of SRI tallies, but the level of integration of ESG criteria varies. Indeed, most of this strategy consists in selecting companies according to loosely demanding “best in class”, “best in universe”, and “best effort” standards. Normative exclusion applies to 73% of assets. According to Novethic’s in-depth analysis of the use of ESG integration and research, SRI asset managers applied ESG research to funds worth 2.26 trillion euros in 2012. The consistent application of ESG criteria to asset valuation or target prices, however, affected only 38.5 billon euros. The consideration of ESG criteria by non-SRI funds (with the goal of avoiding the most poorly rated companies from the viewpoint of these values, for example) applied to 283 billion euros in 2012 while the ex-post valuation of non-SRI funds according to ESG criteria (with the objective of sensitizing non-SRI fund managers to these issues, for example, or of converting traditional funds to SRI) applied to 377 billion euros. Finally, 10 asset managers concentrated 80% of SRI funds under management in 2012, Amundi Asset Management leading the market by far with 65 billion euros in SRI funds. Translated by Sandrine Tesner Source : Novethic