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Summary of our market study
france's ESG assets total over 4.8 billion euros.
The global ESG finance market has experienced strong growth in recent years, representing 10% of total debt issued worldwide and exceeding one trillion dollars.
European and French markets play a key role in this sector, with France's ESG assets totalling over 4.8 billion euros. Europe is the world champion in green bond issuance.
The European Union's green recovery plan in the wake of the Covid crisis has given a further boost, aiming to channel an estimated 1,175 billion euros into climate action.
ESG bond issues are diversified, between and banks. Development banks account for around 70% of global issuance.
The market is witnessing a trend towards consolidation among ESG data and service providers, with major acquisitions such as Sustainalytics by Morningstar.
Sustainable investment in France
Around two-thirds of French investors are aware of sustainable development and consider it essential to their financial decisions. However, security and profitability remain the main investment concerns. Only 7% give priority to SRI criteria in their investment decisions.
The French ESG market occupies a dominant position in Europe. France manages 40% of European ESG funds, while accounting for just 16% of total assets under management in Europe.
French investment funds with sustainable development objectives account for more than half of all funds.
Life insurance policies in France include at least one SRI fund, and sustainable investments are increasingly common in employee savings plans, pension funds and even real estate funds.
The ESG finance landscape in France includes around 900 savings products bearing important French labels such as SRI, Greenfin and Finansol.
France plays a leading role in shaping European sustainable investment policy, with the European Commission focusing on harmonizing ESG offerings across the continent.
The European Union and France have been proactive in establishing a solid legislative framework to improve transparency and accountability in ESG reporting. The European SFDR regulation, as well as Article 29 of the French Energy and Climate Law, make it mandatory to disclose the integration of ESG criteria into financial decision-making processes. The European Taxonomy provides a standardized classification of sustainable activities, and tools such as the EU Climate Criteria Regulation are shaping the sustainable investment ecosystem.
Players in the global ESG finance ecosystem
- Rating agencies - Standard & Poor's (S&P), Moody's and Fitch remain key players in the integration of ESG factors into credit ratings, offering investors insight into the sustainability and ethical impact of their financial decisions.
- Extra-financial rating agency - Vigeo Eiris, a subsidiary of Moody's, specializes in evaluating and researching companies and organizations with regard to their practices and performance on environmental, social and governance issues.
- Index providers - Bloomberg, Thomson Reuters and MSCI provide indexes that enable investors to track the performance of stocks meeting specific ESG criteria.
- Climate risk specialists - Carbon Delta, a subsidiary of MSCI, is known for its expertise in climate analysis, providing asset managers and investors with risk assessment tools specifically designed to evaluate climate-related risks in their investment portfolios.
- Asset managers - BlackRock and Amundi are two of the world's leading asset management companies with a strong commitment to ESG investment. They offer a wide range of ESG funds and services, enabling investors to integrate sustainable strategies into their portfolios.
- Leading green bond issuers in the energy sector - Enel, Iberdrola and Engie represent the energy sector's commitment to sustainability through the issuance of large volumes of green, social and sustainability (ESG) bonds.
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Summary and extracts
1 Market overview
1.1 Definition and presentation
ESG (Environmental, Social and Governance)finance has become increasingly essential over the years, as the IPCC's warnings to massively reduce greenhouse gas emissions to keep global warming below 1.5°C become ever more pressing.
Meanwhile, investor enthusiasm for ESG-labeled assets continues unabated, with the European Securities and Markets Authority (ESMA) producing a report in 2022 highlighting the outperformance of ESG funds, particularly those with the most stringent requirements:
- The value of impact funds grew by 4% over the decade 2010-2020;
- Other ESG strategies saw their asset values increase by 2%;
- Strategies that simply exclude certain sectors grew by 1.7%.
The ESG finance market is governed by a set of standards, proposed by international associations or state institutions. At present, these regulations are not very restrictive, but they are set to become even more so with the gradual implementation of the European Taxonomy, and the impetus it gives to financial players worldwide.
This new trend in the financial markets means new opportunities for a number of players, who will have to deploy a variety of new activities:
- ESG risk management, which is already being taken up by consulting firms;
- ESG reporting, which European companies will gradually have to comply with;
- Green bond issuance, which will become increasingly stringent and a central issue for banks.
1.2 Global market
According to the Global Sustainable Investment Alliance, the sustainable finance market was worth US$** tr illion in ****. According to Deutsche Bank, this market is expected to grow at a CAGR of +**% per year until ****, allowing us to estimate its size at US$*** trillion. These figures correspond to the capital invested in ...
1.3 Domestic market
The French ESG finance market is very dynamic, particularly in recent years. It is the leading market in Europe, with **% of European ESG funds managed in France, whereas France's share of total assets under management is only **%. In addition, over **% of French investment funds have set sustainability objectives. [***]
assessment of the ...
1.4 Weight of France and Europe in ESG bond issues
Over the years, Europe has established itself as the world leader in ESG finance. By ****, almost half of all green bond issues were in euros.
Share of global green bond issuance in euros World, ****, % (***) Source: ****
With regard to ESG bonds in general, we can draw up a table summarizing the cumulative ...
1.5 The European Union's green recovery plan in response to the Covid crisis
In response to Covid-** and the climate crisis, the European Union has drawn up a climate investment plan, directing capital from a wide range of institutions, both public and private. This massive channelling of capital into sustainable investments reassures investors about this asset class, and should drive a broad-based change in ...
2 Demand analysis
2.1 A majority of French people are interested in sustainable development when it comes to their financial choices
**% of French people are aware of sustainable development issues and pay attention to them.
How important are sustainable development issues to you? France, ****, %, %, %, %, %, %, %, %, %, %, %, % Source: ****
To a lesser extent, the French are convinced that savings and finance have a role to play in these issues, with **% of them orienting their savings and ...
2.2 Security and profitability remain French investment priorities
Only *% of French people place SRI criteria at the top of their list of investment priorities. However, **% include them in their top * criteria. The top * criteria remain the security of the financial product (***).
In fact, a CSA survey commissioned by Amf shows that the choice of SRI investment is directly linked ...
2.3 Profile of ESG investment holders
The **-** age group is over-represented among ESG investors: **% of them own ESG investments, compared with **% of the rest of the population. According to a **** KPMG study, this generation is in search of meaning, which explains why **% of this age group would like to develop their knowledge of ESG investing. What's ...
3 Market structure
3.1 Increased credit risk for vulnerable sectors
The consequence of taking ESG data into account in economic forecasts is to redirect capital away from sectors that are less compatible with sustainability requirements, towards more virtuous sectors. The sectors listed below will therefore be the first to bear the brunt of exclusion strategies adopted by investors seeking to develop ...
3.2 ESG bond issuance by type of player
In Q* ****, the quantity of sovereign green bonds issued was double that of the previous year, reaching **% of total green bond issuance. The biggest issuers in Q* **** were corporates, responsible for **% of issues. Indeed, large companies, such as those in the energy sector like Iberdrola or Enel, regularly issue bonds worth ...
3.3 Extra-financial indicators essential for evaluating a company
The following extra-financial indicators are essential for evaluating companies of all sizes: Pillars Themes Essential ESG indicators Environment Climate / Green share Green share of sales in taxonomy Resources / Water Volume of water used or recycled Resources / Energy Total energy consumption Human capital Skills development Total training budget by legal entity Workforce ...
4 Offer analysis
4.1 Types of ESG financial products
Since ****, life insurance contracts have been required to include at least one SRI fund. Sustainable investments are also developing rapidly in employee savings funds, pension funds and real estate funds such as SCPIs. The governance dimension of ESG can also be found in shareholder engagement, which refers to dialogue policies within ...
4.2 ESG data providers: a multitude of offers available
ESG data and service providers have developed from players in different industries.
Source: ****
The sector is also undergoing consolidation. The latest acquisitions are Sustainalytics by Morningstar and RobecSAM by S&P.
We will distinguish six main categories of ESG offerings and services, identified in the Deloitte report on ESG data ...
5 Regulations
5.1 European and French regulations defining the transparency framework for ESG information
European and French legislation has gone to great lengths to establish a transparency framework, notably to identify activities relating to fossil fuels. The European Regulation (***).
the European SFDR has been extended by Article ** of the French Energy-Climate Law.
5.2 A European framework under development: the Taxonomy and the tools to implement it
In addition to the publication of non-financial information, the European regulatory framework is based on two pillars:
The European Taxonomy
Adopted on June **, ****, the regulation is soon to be revised to include gas and nuclear, as transition technologies. This is a common classification of economic activities aimed at achieving environmental objectives, ...
6 Positioning the players
6.1 Segmentation
- Engie
- Blackrock
- S&P
- Moody's
- Fitch Ratings
- Bloomberg
- Amundi
List of charts presented in this market study
- Capital mobilized in the sustainable finance market
- Assessing the role of sustainable finance in France
- Funds under management by ESG label
- Share of global green bond issues in euros
- Outstanding ESG bonds by theme
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Latest news
Engie accelerates battery development in the United States - 25/09/2024
- 1. Storage capacity added by Engie in the U.S. since January: 1 gigawatt (GW), bringing total U.S. installations to 1.8 GW.
- 2. Total capacity of Engie installations worldwide: 2.3 GW.
- 3. Engie's renewable generation capacity in the U.S.: 6 GW.
- 4. Percentage of flexibility required*: 20 to 30% for 100 megawatts of installed generation capacity.
Engie persuades BASF to acquire biogas for the long term - 05/07/2024
- Biogas contract duration: 7 years
- Delivery location: Ludwigshafen in Germany and Antwerp in Belgium
- - Biomethane use: Replacement of fossil gas in various production processes (automotive industry, packaging, detergents, textiles, etc.)
- - biomethane is almost three times more expensive than fossil gas
- - Number of similar contracts signed by Engie: 5, including one with chemical company Arkema
Engie launches Dutch biomethane production - 16/04/2024
**Engie's target for 2030**: to reach a biomethane production capacity of 10 TWh.
**Engie's current production capacity**: over 1 TWh
**Capacity of new units in the Netherlands**:- **Hardenberg**: 90 GWh, with possible extension to 140 GWh. - **Alkmaar**: 47 GWh, with potential to double capacity.
**Engie investment by 2030**: 3 billion euros in biogas
**Biomethane prices**: - In the Netherlands: between €90 and €105 per MWh. - In France: around €110 per MWh.
**Distribution of Engie capacity by country**: - Netherlands: 137 GWh. - United Kingdom: 217 GWh. - France: approx. 0.7 TWh.
Engie New Ventures bets on Upstream Tech, a start-up specializing in water management - 16/12/2023
- Creation of ENGIE New Ventures (ENV): 2014
- Total amount invested by ENV: Over 250 million euros
- ENV investment areas from 2020: Biogas, hydrogen, renewable energies and decarbonization
- Upstream Tech creation date: 2016
- Upstream Tech headquarters: Massachusetts, USA
- Number of Upstream Tech employees: Around 30
- Power of ENGIE's hydroelectric fleet worldwide: 18 gigawatts, equivalent to 18 nuclear reactors.
Install 11,000 charging stations in France in two years - 18/06/2023
- Engie Vianeo electric mobility brand
- 12,000 electric charging points planned in France by 2025
- 1,000 charging points already deployed
- 800 fast and ultra-fast charging points on APRR, SANEF, Vinci Autoroutes and ESSO motorway networks (Certas Energy France)
- Presence in 35 Indigo parking lots in 20 cities, Eurométropole de Strasbourg, Communauté d'Agglomération d'Epinal, Métropole Aix-Marseille-Provence, B & B Hotels parking lots and Norauto sites
- 4,500 fast and ultra-fast charging points (less than 20 minutes charging time).
- electricity from renewable sources (hydro, wind and solar)
- French national target of 400,000 charging points by 2030
Financial rating agencies: S&P, Moody's and Fitch - 31/05/2023
- S & P, Moody's and Fitch dominate the market for corporate and government ratings
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The ESG finance market | France
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