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📋 #France has taken a significant step by implementing new, more ambitious rules for sustainable investments from March 1, 2024, in line with the Corporate Sustainability Reporting Directive (CSRD) which was put into effect in 2023 to regulate green reporting across Europe.
🚫 First introduced in 2016, the Investissment Socialement Responsable (ISR) label is strengthening its climate position by requiring the exclusion of investments in coal, unconventional hydrocarbons, and new hydrocarbon projects.
✅ ISR funds now need to allocate at least 15% of their portfolios to companies with carbon transition plans in line with the Paris Agreement, a figure that will increase over time.
⚠️ Currently, there are 1,200 ISR-labelled funds, representing €773 billion in assets. However, 45% of these funds have exposure to the traditional energy sector, with assets around €7 billion, highlighting the importance of shifting towards more sustainable investments.
🌱 Despite progress, unfortunately investments in cleantech are still trailing behind. We need to direct more financial resources into sustainable businesses in order to speed up the transition to a green economy to ensure we reach our climate targets.
🌍 France’s approach to enhancing the CSRD's effect demonstrates the power of national initiatives in driving changes and encouraging a more rigorous and transparent approach to sustainability in finance.
💚 The financial sector's adaptation to these new regulations is a clear signal of the growing commitment towards meeting net zero targets and hopefully France’s implementation of these new rules will serve as a strong signal for other countries to follow suit. .
👀 Stay tuned this week as we dive further into corporate green claims!
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