France’s Minister of the Economy, Finance and Recovery Bruno Le Maire announced today a series of updates to the French Socially Responsible Investment (SRI) label, aimed at making the label more demanding and climate-oriented, including new rules that would effectively exclude most oil and gas companies from SRI-labelled funds.
The SRI label was launched by the French Ministry of the Economy and Finance in 2016, aimed at allowing the general public to invest in savings vehicles that integrate ESG principles. The label, which is awarded following a strict compliance process conducted by an independent body, is systematically referenced in life insurance units of account and in retirement savings plans.
Currently, nearly 1,200 funds, representing more than €770 billion of assets under management, utilize the SRI label.
The update follows launch by Le Maire in 2021 of a committee aimed at reinforcing the ambition and requirements of the SRI label, which the Economy and Finance ministry said has not been significantly updated since 2016.
Based on the committee’s recommendations, the label will be updated with stricter requirements and climate impact as a key principle. Under the new rules, SRI-labelled funds will be required to exclude companies that exploit coal or unconventional hydrocarbons, as well as companies that launch new oil and gas exploration, production or refining projects.
The new rules will also require companies included in SRI-labelled funds to have a Paris Agreement-aligned transition plan.
Le Maire said:
“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.”
The new SRI labelling standard will be published later this month, and come into effect in March 2024.