Starting August 2, when you push on the door of your banker’s office or any other intermediary offering investment advice or portfolio management services, expect to be questioned. These professionals are already required to conduct interviews with their clients to ascertain their risk profile. The latter is based on several characteristics, such as the size of assets, knowledge of financial products, investment horizon, risk appetite … “Before each subscription, our consultants conduct a customer survey,” explains Laetitia Bernier, director of sales and marketing at real estate fund manager Perial. This is the stage of identifying the depositor in order to find out his wishes for investment projects in order to propose appropriate solutions.” From this summer, distributors of savings products (life insurance, savings plans, securities accounts, funds, etc.) will also have to ask you about your preferences in terms of sustainable financing.
This new obligation is part of a broader regulatory project that is incumbent on the financial sector. “This new regulation is part of the European agenda aimed at redirecting savings to responsible products,” says Laetitia Bernier. And thus direct capital towards green activities that contribute to the climate neutrality adopted by Europe. A priori, investors should favor investment products that combine non-financial, environmental, social and good governance (ESG) criteria. According to the latest edition of CPR AM’s Responsible Investment Barometer, 64% of contributors surveyed rate the non-financial impact of their investments as at least the same as their financial results.
Three questions asked
But the texts go much further than just asking if you want to prioritize responsible products. Distributors will have to examine you on three well-defined points, “most accurate to least accurate,” emphasizes Thibaut Michelich, director of ESG at Lazard Frères Gestion management company. First of all, they will have to ask you what is the minimum share of your investment you want to align with the European taxonomy. This is a very precise classification of green activities that contribute to climate change mitigation and adaptation, pollution control, the transition to a circular economy, the protection of biodiversity… This approach is very rigorous because, according to the European Commission, these activities are currently time accounts for only 1% to 2% of the turnover of listed companies. In practice, asking to be taxonomically aligned with all of your investments will result in a concentration of assets in a very limited number of companies and sectors, and therefore high risk.
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The second question is broader and concerns the desired share of sustainable investment. The definition this time is much less precise and broader, since it includes not only the environmental aspect, but also the social one (employment, equality between men and women, respect for workers, etc.). Each management company will have to indicate and justify the proportion of their sustainable investment in their products in accordance with a methodology that has yet to be determined. Risk ? To see the emergence of very different approaches, more or less serious, from one promoter to another. “Over time, we will see a homogenization of the definition of sustainable investment,” says Thibault Michelich.
Finally, consultants will ask their clients about their desire not to invest in companies whose activities have a negative impact on the environment. Indeed, by the end of the year, companies will have to report on a certain number of indicators in order to measure the impact of their activities on global warming, biodiversity loss … They will have to provide information on 14 indicators. “Fund managers will have to prove that they give preference to companies that are the best in these matters,” says Thibaut Michelich. At this stage, it will be impossible to go into details, but in the future, each contributor will be able to put forward the criteria that are most important in his eyes.
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Proper implementation of this new, relatively complex regulation requires significant training for contributors. “Therefore, one of the tasks will be to popularize all the technical terms and jargon as much as possible, using a simple vocabulary so that everyone can understand it,” says Laetitia Bernier. At the same time, management companies are working on creating new products to better meet the expectations that will be disclosed in this new questionnaire. “We expect customer demands to grow,” emphasizes Thibault Michelich. The consultants still have a few weeks to think about this issue.
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