Market: The big generation gap on sustainable investments in France

(BFM Bourse) – The French are showing increasing interest in sustainable investments. Especially those under 35 who are most likely to find these products interesting. They represent half of investors who have subscribed to sustainable funds since 2022, according to the latest AMF survey

The younger generations are more and more inclined to green their investments. Investors under the age of 35 represent half of investors who have subscribed to sustainable funds since 2022, according to a survey conducted in April 2023 by the OpinionWay institute of the Autorité des marchés financiers (AMF).

More generally, this survey of 2,000 savers shows that the French’s interest and knowledge of sustainable investments has increased compared to the previous survey conducted in June 2021.

Two-thirds of the French actually attach importance to issues of sustainable development, including in their choice of savings. This is four points more than in 2021. The majority (54%) say they take these sustainable development issues into account in their choice of investment, when 75% of respondents consider the impact of investments on the environment “as an important issue”.

The study also shows that the holdings of these investments have also increased. Almost one in five French people say they have at least one investment “related to sustainable development”, i.e. 19% of respondents. This share has increased by two points compared to 2021.

A generation gap

Respondents mainly cite collective investments, shares or bonds bought directly and linked to sustainable and solidary development (LDSS). However, this regulated savings account is used to finance loans to small and medium-sized businesses and does not constitute a responsible investment invested in financial instruments. By removing this savings product, the inventory ratio drops to 13%.

As for responsible fund holders, who represent 8% of respondents, more than a quarter have invested recently, in 2022 or early 2023. Half of these new investors in sustainable funds are under the age of 35. Women make up half of recent subscribers.

A little less than half of the respondents, i.e. 44%, consider these sustainable or responsible investments “interesting”. A share unchanged compared to the last survey. Behind this relative consensus, however, hides a “significant” generation gap, the study underlines. If 42% of those under 35 have a good image of this type of investment, only 24% of those over 65 do.

This generation gap is also visible in investment projects: 44% of those under 35 plan to invest part of their savings there in the short or medium term, compared to 15% of those over 65.

A need for information to better understand sustainable investments

Although these investments tend to become more popular over the years, savers say they feel the need to be better informed about these products. They want to better understand the pros and cons of sustainable investments, their real impact and how they work.

64% of them declare that it is important for their bank or financial advisor to ask them about their desire to make “responsible” or “sustainable” investments, while only one in ten French people have already been asked about their ESG preferences (environmental, social and governance criteria). In particular, since August 2022, bank advisors must collect their client’s “sustainability” preferences, just like financial investment advisors since January 1, 2023, the AMF reminds.

Overall, the notoriety of this financial universe has improved, the study notes. 57% of respondents are able to define what sustainable investments are, which is 5 points more than in 2021.

However, respondents feel that they are not familiar with the main concepts of European regulation regarding sustainable finance. They are thus 26% who say they know the “taxonomy” (including 19% vague) and 24% the SFDR regulation on the disclosure of information about sustainability in the financial sector (including 18% who have heard of it).

The more specific terms “Article 8” funds (taking into account environmental and/or social criteria) or “Article 9” funds (having a sustainable investment objective) are less accepted, as only 16% of respondents said they knew these two terminologies.

Sabrina Sadgui – ©2023 BFM Bourse

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