While it still remains a niche of responsible investment*, solidarity finance continued to grow well last year, reveals the annual FAIR/La Croix barometer. After a relatively exceptional jump of 33% in 2020 – effect of the coronavirus crisis – its overall outstandings reached 24.5 billion euros in 2021, i.e. an increase of 26% (+€5.1 billion) and its highest strong historical increase in absolute value.
A buoyant market environment
During this post-Covid period, investments in funds labeled Finansol or identified as solidarity-based (90/10** funds), savings accounts or even crowdfunding benefited from the dual effect of the rise in financial markets and the Pact law, such as the lowering of the social package for VSEs and SMEs or the obligation for insurers to offer at least one solidarity unit of account in life insurance contracts “, analyzes Frédéric Tiberghien, president of the association FAIR (ex-Finansol).
Bank savings is the channel that experienced strong absolute and relative growth, with an increase of €2.4 billion (+38%, to €9.5 billion). Outstandings in passbooks and term accounts increased by almost 20%, to reach 2.73 billion euros. Solidarity mutual funds recorded growth of one billion euros in assets, due to the appearance of new products and an increase in products already labeled. ” However, it is the life insurance channel that has been the most dynamic in terms of new products “, thanks to the Pacte law, reports the Barometer.
Solidarity employee savings, for its part, increased by 21% to reach 14.1 billion euros in assets. Finally, savings collected directly by solidarity companies increased by 15% (0.9 billion)
Nearly 700 million euros of projects financed over one year
In terms of financing, 699 million euros have made it possible to support more than 1,350 projects with a social or environmental impact. More than half of these flows were intended for a social objective (52%), in particular housing “ a catch-up effect from the previous year when many construction sites suffered delays or were paralyzed due to the coronavirus pandemic “, explains Jon Sallé, head of the Social Impact Finance Observatory at FAIR. 17% of funding supported environmental projects (organic sector, renewable energies, etc.) and 13% initiatives linked to territorial cohesion and the local economy.
With 178 Finansol-labeled products at the end of 2021 and around forty funds eligible for life insurance solidarity unit-linked products, the investment offer for individuals is gradually increasing, but still remains limited, at least if compared to the myriad of SRI products available on the market today.
A still limited offer in the banking networks
However, with the regulations, this offer of solidarity products is promised to expand. Since the beginning of 2022, the Pacte law has required distributors of life insurance contracts to offer at least one “solidarity” unit in their catalogs.
” We are still only at the beginning of the effects of the Pacte law, which will accelerate the phenomenon of new entrants, but it is also necessary that solidarity products be better offered in the banking networks. », Considers Jon Sallé.
In the meantime, competition that is limited for the moment allows the management companies present in this niche to achieve good performance: “ Mirova and Amundi are seeing rapid growth in their solidarity funds”. Among the handful of newcomers, Novaxia Investissement’s Novaxia R fund, created in the spring of 2021, also got off to a good start. Listed with six insurers, this investment support specializes in the rehabilitation of office buildings into housing.
The company provides free of charge the premises awaiting work to solidarity associations. For its first year of existence, the fund collected 194 million euros, fully allocated to 10 commercial assets, and delivered an annualized performance of 5.08%.
*Estimated at 777 billion euros in assets at the end of 2021 for the French SRI label alone, according to Novethic. The size of the French responsible investment market is debated. The responsible finance specialist Axylia thus considers that this market would not in reality exceed €216 billion.
**90/10 funds: these funds are required to invest between 5 and 10% of their assets in approved “solidarity business” organisations. This rule, which is specific to solidarity employee savings funds (solidarity FCPE), has been applied, in practice, by fund managers to all other solidarity UCIs (FCP, SICAV). Source: FAIR.