Crédit Agricole next bank guides you through responsible investment

Published on September 5, 2021Reading time 4 min.
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Ethical finance, responsible investment, consideration of social and environmental criteria, the search for sustainable investments in every sense of the word... Investment is becoming increasingly committed, in the image of increasingly involved investors.

The first step is to make it easier for you to find your way around a customer journey littered with acronyms. CSR, SRI, ESG: let's take a look at a few acronyms to help you combine the search for meaning with the search for profitability.

CSR, or Corporate Social and Environmental Responsibility

More and more companies are voluntarily incorporating social and environmental concerns into their strategy. By integrating CSR, they hope to have a positive impact on society, without sacrificing their economic viability.

CSR means taking four major issues into account in the activities of companies:

  • Environmental
  • social issues
  • Ethical issues
  • And of course economic issues

To understand CSR further, we need another acronym: "ISO", which stands for the International Organisation for Standardisation. Based in Geneva, ISO is an independent NGO that federates national standards bodies, such as SNV (the Swiss Standards Association).

ISO members develop international standards for voluntary application, based on consensus, relevance to the market, support for innovation and the search for solutions to global challenges.

So when you see that a company, whatever its legal status, geographical location, size or sector of activity, has adopted the ISO 26000 standard, you can be sure:

That it respects the major international founding texts such as the Universal Declaration of Human Rights or the conventions of the International Labour Organisation.

That it has adopted behavioural guidelines based on seven major themes and principles.

These themes are as follows:

  • Governance of the organisation.
  • Human rights.
  • Labour relations and working conditions.
  • The environment.
  • Fair practices.
  • Consumer issues.
  • Communities and local development.

The way in which the companies concerned integrate these principles and values, on a voluntary and sometimes binding basis, must be accessible to the public, so that they know who they are lending their money to.

When it comes to investing or saving, the question "What's in it for me? is now joined by a second, increasingly insistent question: "What is my money actually being used for?

SRI, or socially responsible investment, is the answer to this question of meaning.

SRI, or Socially Responsible Investment

Socially responsible investments (SRI) are investments that aim to reconcile economic performance with social and environmental impact. Only investments in companies that attach particular importance to their social and environmental responsibility (SER) can be classified as SRI.

To make responsible and sustainable investments, in every sense of the term, an SRI fund favours shares in companies that meet the following conditions:

These companies integrate environmental, social and governance (ESG) criteria into their operations, production processes, choice of raw materials and behaviour towards employees.

They are monitored by third-party bodies responsible for assessing their compliance with ESG criteria, giving them ratings and calculating their ESG index. And, of course, they perform well financially!

The acronym ESG stands for environmental, social and governance criteria: a third acronym to master as we conclude this first journey into responsible savings and investment.

ESG, or Environmental, Social and Governance criteria

Environmental, social and governance (ESG) criteria are analytical criteria used to assess the integration of these three major long-term issues into a company's strategy and activities.

These criteria are all tools used by SRI investment managers.

In concrete terms, here is what each of these criteria takes into account.

  • Environmental impact: climate change, energy consumption, use of resources such as water or forests, CO2 emissions, pollution, waste recycling, etc.
  • Social climate: working conditions, respect for employees and labour law, equal treatment of men and women, quality of dialogue, employment of disabled people, employee training, etc.
  • Governance: transparency of executive remuneration, the fight against corruption, the independence and gender balance of boards of directors, auditing of accounts by an independent committee, etc.