SRI funds: how to combine performance and ethics?

The february 11, 2020

Socially responsible investing (SRI) involves investing your money in a fund that meets environmental, social and governance criteria (ESG criteria).

To begin with, what is a fund? It is a portfolio of assets such as stocks and bonds of several companies, states ... You have access to a fund when you invest in a life insurance contract, a securities account, a French 'PEA', 'PERP' or new 'PER'...

Through these different supports, you therefore have the choice of directing your savings towards SRI labeled funds, in total agreement with your personal values.

How are the criteria for considering a fund as socially responsible determined?
- The environmental criterion takes into account the impact of the company on its environment (its ability to manage its waste, limit pollution, its consumption of electricity water, etc.). Companies with a positive impact on the environment are therefore all the more eligible for the SRI label.
- The social criterion takes into account the company's relationship with the various stakeholders (well-being of employees, control of the supply chain, transparency towards shareholders ...)
- The governance criterion checks the transparency of the company's management, the existence of an effective checks and balances ...

An SRI fund can target companies from various and varied sectors or target companies operating in a specific area (water treatment, renewable energy, reforestation, etc.). Certain sectors can also be excluded depending on the fund (armaments, tobacco, alcohol, fossil fuels, etc.), just like companies tainted by controversy (dieselgate, etc.) or corruption.

In addition to being part of a sustainable development approach, SRI funds are not outdone in terms of performance, quite the contrary! Numerous studies indeed prove that the most virtuous companies are also the most successful.

However, be careful, not all SRI funds on the market are created equal, this is why it is advisable to be accompanied by an expert in choosing the socially responsible funds that will make up your portfolio.

Do you want to benefit from the best SRI funds on the market? Make an appointment with our Wealth A7 experts!


Article by : Orane TREHET

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