The Fiduciary Duty in the 21st Century programme – launched by the Principles for Responsible Investment (PRI), the United Nations Environment Programme Finance Initiative (UNEP FI) and The Generation Foundation – collaborated with Finance for Tomorrow to publish a France roadmap for sustainable finance, setting out recommendations for institutional investors and policy makers.

The primary version of the roadmap is in French and can be downloaded below. 

France is one of the leading responsible investment markets in Europe. There has been considerable momentum within the French financial community over the past three years in responsible investment.

Regulatory developments in France and Europe are requiring financial actors to clarify their fiduciary duty to incorporate ESG issues into investment strategies and investment tools, and to consider how investors assess the sustainability impact of their investment activities.

Such developments include the final adoption of the Action Plan for Business Growth and Transformation (PACTE), and work driven by the European Commission to clarify investor duties regarding integrating ESG issues and measuring the sustainability impact of sustainable investments.

Despite this progress, obstacles remain:

  • Governments and private actors, including investors, are not appropriately managing climate risks and opportunities to address climate change and limit global warming to 1.5°C above pre-industrial levels.
  • Although France is a leader in responsible investment, the sharing of best practices and cooperation between financial players is insufficient to reduce ESG integration costs.
  • There is limited training and education on sustainable savings products, causing an imbalance between supply and demand.
  • The complex framework of normative requirements means investors take varying approaches to ESG integration, resulting in higher implementation costs and a lack of clarity.
  • Upcoming regulatory changes are not communicated effectively to financial actors, creating uncertainty and higher costs of implementation, especially when defining the technical aspects of risk measurement and assessment of the impacts of investment activities.
  • Research and development has focused on ESG integration methodologies, leading to complex products, which are hard to compare and assess their sustainability impact.
  • Shareholder engagement with issuers on ESG factors remains limited and the exercise of voting rights by investors is perceived as complex and costly.
  • There is a lack of investment tools that incorporate the impacts of investment activities.
  • French service providers do not meet the investment requirements involved in more innovative methods of ESG integration and impact assessment.
  • Article 173 of France’s Energy Transition for Green Growth Law has not yet achieved its original intent. Following policy maker consultation with investors, the law was introduced on a “comply or explain” basis, meaning that investors must provide an explanation if they do not comply with any of the requirements outlined in the Act. There is, however, no further guidance or agreement about the expectation of what would be a satisfactory explanation for non-compliance.

To overcome these obstacles, the responsible investment movement in France needs a “second souffle” or second wind. The roadmap makes 10 recommendations to strengthen France’s role in the development of responsible investment, capitalising on progress:

Clarify and extend investors’ fiduciary responsibility

France roadmap recs 1-4

Encourage analysis and measurement of the impacts of investment activities 

France roadmap recs 6-7

Create an environment in which responsible investment can flourish

France roadmap recs 7-9

Strengthen collaboration between public and private actors

France roadpmap rec 10

Download the Executive Summary

  • Download report

    Fiduciary Duty in the 21st Century: France roadmap

    November 2018

Télécharger le rapport en Français

  • Download report

    La feuille de route de la finance durable pour la France

    Novembre 2018