On the occasion of the week of solidarity finance, Moneyvox returns to investments with social and environmental impact. What are they and how to choose them? Elements of response with Sarah Perrier, head of the Finansol label.
Sarah Perrier
Responsible for the Finansol label
Until November 14 runs the 15th edition of solidarity finance week. In order to raise public awareness of products and investments with a social and environmental impact, many events and conferences are organized throughout France. But what is solidarity finance? How to choose your investments in order to give them meaning?
Solidarity products, which have so far attracted nearly 25 billion euros, make it possible to finance solidarity and ethical structures and participate in promote renewable energies. Integration, social housing, microcredits to individuals or VSEs, environment, fair trade, sustainable development, support for poor countries, the activities concerned are very varied.
The Finansol label is essential in solidarity savings. The independent professional association grants its label to the solidarity investments offered by the financial organizations which have requested it since 1997. But to obtain the precious sesame, they must obey certain criteria. To find out how to choose solidarity investments, Moneyvox interviewed Sarah Perrier, head of the Finansol label.
What are the criteria for Finansol-labelled financial products?
Sarah Perrier: “Today there are two main criteria for labeling a product: the criterion of solidarity and that of transparency. For solidarity, there are two mechanisms. The solidarity financing mechanism for passbooks and life insurance for example: part of the outstanding is invested in activities with strong social and environmental utility. And the interest-sharing mechanism : the saver can decide to donate part of his remuneration in the form of donations to beneficiary associations. At least one of these two mechanisms must be used to be eligible for the label.
Comes next the transparency criterion : there must be perfect transparency between the saver and the company financed at the end of the chain, in which the savings are invested. The manager of a Finansol-labelled investment undertakes to be completely transparent towards the saver on the activities financed in his communication documents. It is also a guarantee of confidence for the saver. All types of investments and assets are concerned. The Finansol label committee also undertakes to verify that the placement meets the label criteria each year”.
“We are more demanding than the law on these solidarity funds”
Since 2001, there have been solidarity funds, also called 90-10 funds, available in the form of FCPE, FCP or SICAV for example, and which are not all labeled Finansol. What exactly are these funds and how does the Finansol label help differentiate them?
SP: “The law that defines a 90-10 fund says that the fund must invest up to 5 to 10% in companies approved ESUS (Social Utility Solidarity Company). The Finansol label goes a little further because we ensure that there is consistency between part 90 (listed pocket) and part 10 (solidarity pocket). We therefore ask that the fund have set up a socially responsible investment policy based on ESG criteria (for Environmental, Social and Governance). All this to ensure overall product consistency. The Finansol label is more demanding than the law on these solidarity funds”.
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How to invest in solidarity investments?
SP: “Savers have three channels for choosing solidarity investments. The first channel is with your bank or insurer to subscribe a solidarity savings investment via a passbook, a FPC, a SICAV, life insurance or a term account. Investors also have every interest in challenging professionals to find out about solidarity products.
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The second solution is through his company. Today, all companies are required to offer a solidarity fund within the framework of EPE (Company Savings Plan) or PERCOL (Collective Retirement Savings Plan). A good part of the employee savings funds are labeled Finansol.
There is a third channel: solidarity shareholding. Go directly to subscribe for capital shares, shares or cooperative shares. It is a question of going further by taking part in the governance of the company in question. You can act directly with your money with companies in your territory, for example”.
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What return can be expected for the saver?
SP: “The profitability of the investment will above all depend on its type, that is to say whether it is made up of shares, bonds or whether it is a monetary fund, for example. For 90-10 funds, it is the 90 part that will give the profitability. The more risk you take, the more return you can potentially get. All Finansol-labelled funds produce a key investor information document where all the risks and returns for past years are listed. It is advisable to keep your savings placed in solidarity funds for 5 years, which allows the solidarity organizations financed at the end of the chain to implement their projects. The idea is to provide financial resources so that the company can develop its long-term project. We call that patient capital.
Solidarity investments have a double return with the social profitability. For example, in 2021, subscription to Finansol-certified solidarity investments made it possible to house 1,619 people, support 38,758 jobs, supply 5,904 households with renewable energy, make 1,212 hectares of organic farming available in the year in France or to support more than 60 actors of international solidarity. These investments allow a direct social impact”.
“Many Finansol-labeled products allow you to benefit from a tax advantage”
Can the investor benefit from tax advantages by choosing a solidarity investment?
SP: “Many of the Finansol-labeled products allow you to benefit from a tax advantage. This is particularly the case when investing via a Company Savings Plan (PEE) or PERCOL: the sums invested and the interest generated will be exempt from income tax, if the sum is blocked for at least 5 years. Savers, holding a solidarity savings account or a term account who donate their remuneration to associations, benefit from the taxation of the donation: at least 66% amount donated will be deductible from their income tax.
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