As of Tuesday, August 2, bank advisors are required to take into account their clients’ preferences relating to sustainable investments as part of their financial investment advice mission.
This new obligation, resulting from European regulations, should result in the establishment of a “green questionnaire” whose purpose is to define the preferences of savers in terms of the “sustainability” of their financial investments, in order to offer them investments corresponding to their preferences, or, if this is not possible, more suited to their wishes.
A profile determined in three axes
More specifically, the questionnaire should apply to determine the “sustainable profile” of investors according to three axes: the proportion (from zero to one hundred percent) of the investments in their portfolio that they wish to see invested in activities considered as sustainable on the environmental plan by the European classification called “taxonomy”; the share (from zero to one hundred percent) that they wish to see invested in sustainable investments within the meaning of the “SFDR” regulation (publication on sustainability in the financial services sector), which covers a wider field than the ” taxonomy” since it is not limited to certain economic activities; as well as taking into account the “main negative impacts” of their investments (such as greenhouse gas emissions, water management, production of hazardous waste, but also impacts on the social aspect, such as the respect for human rights, gender equality, etc.).
To translate these somewhat technical lines of analysis, professionals must apply themselves to formulating the preferences of their clients based on concrete questions. For example: “Would you like, through your investments, to support a particular environmental objective (protection of biodiversity, preservation of the oceans, innovation in the production of green energy, etc.)? » ; “Do you want to completely exclude certain sectors from your investment? (fossil energy, etc.) or do you agree to invest a certain percentage of your investments in it? » ; “Do you want your investment to have no negative impact on the fight against climate change? “. These questions will not be identical from one institution to another, each financial intermediary being responsible for establishing them.
Of course, if the banks must now collect the “sustainable” wishes of their customers, these orientations are however not obligatory for the savers, who remain free of the choice of their investments.
A welcome boost
While the European taxonomy is still recent, and the classification of sustainable investments remains complex – in particular because the collection, processing and analysis of ESG data are not harmonized from one structure to another – these questionnaires will bring a welcome additional boost to savers to navigate the jungle of responsible investments.
But this same complexity also represents a difficulty for financial institutions, insofar as it is likely that a certain number of their clients’ wishes will not find the right fit. So that this measure does not remain just a stab in the water, the establishment of relevant questionnaires and a corresponding offer will certainly require the profession a time of adaptation, and efforts, both pedagogical than in terms of commercial offer.
For the time being, the green questionnaire is only imposed on bank advisers. Financial investment advisers (CIF) will have to apply it from 1 January 2023.