There is a difference in perception between investors who put their money into tangible assets and promote growth in the real economy and financial traders who seem to gamble on immaterial assets, winning or losing vast sums at the click of a mouse. The former is seen as being more virtuous than the latter, which is widely blamed for causing the financial meltdown of 2008 and continuing problems in the eurozone.
“Of course, the purpose of our funds is to perform positively for our investors and also to make money,” says Commercial Director Laurent Vidal. “However, we also want to act in a socially responsible way. We believe in setting out an evaluation framework with which customers can assess the companies we invest in not just according to their bare performance figures but also according to their social performance and base investment decisions on such criteria too.”
Three quarters of the investment opportunities offered by Ecofi Investissements are categorized as socially responsible investments (SRI). Specific filters are in place to evaluate the performance of the companies in which Ecofi invests according to environmental, social and governance aspects. “We use filters from two companies – Vigeo and Sustainalytics,” says Mr. Vidal. “They allow us to build a more three-dimensional picture of a company by analyzing its performance in three suplementary areas.”
These areas cover, for example, a company’s environmental track record or ‘green’ credentials, its human resources, health and safety and employee protection policies, and its ethical management strategy. This strategy means that companies in certain industries are excluded by their very nature. For example, Ecofi Investissements refuses to invest in any company involved in the manufacture of controversial weapons technology such as landmines.
Contrary to popular belief, there is no difference in terms of investment performance between a company that scores highly for sustainable businss practices and one that doesn’t. “We have a long track record in ethical investments,” says Mr. Vidal. “Our first SRI fund, Epargne Ethique Actions, was created in 2000, and we have been signatories to the Principles of Ethical Investments since 2009.” Around 10% of the SRI investments offered by Ecofi Investissements are designated as social investments. These are defined as investments that support activities with a high social and environmental impact that make it possible to create jobs and social housing as well as foster development in deprived areas and build environmental projects.
These investments are not listed on the stock exchange and, in the case of Ecofi Investissements, are focused on more than 60 medium-sized French companies and associations which comply with the principles of social impact finance. “The companies making up our social investment portfolio all satisfy a set of four criteria in that they act for the benefit of the planet, for a more equal society, for international solidarity and more ethical ways of doing business,” says Mr. Vidal.
Social investment funds are growing in popularity both with individual and institutional investors, and are an antidote to what is often seen as greed-driven economy. The success of its ethical funds has also helped Ecofi Investissements to win a number of awards.
Ecofi Investissements has traded under its current name for the past ten years, but its activities have existed for more than 40 years. The company is a 100% subsidiary of Crédit Coopératif Group, one of the major players in ethical banking for the real economy. The group is uncompensed by two banks, Bank Crédit Coopératif and Bank BTP. Ecofi Investissements operates on behalf of both in the area of asset management, offering a range of funds and investment vehicles. It currently has assets worth eight billion EUR under management and ranks among the top 50 asset management companies in France. At the moment its focus is on the French market, but it is looking at expanding into Europe and, in a third step, worldwide.