Is solidarity savings a good investment?

Invest ethically, combining efficiency and personal values.  Photo: GettyImages

Invest ethically, combining efficiency and personal values. Photo: GettyImages

Financing companies of a social, environmental or ethical nature is in the spirit of solidarity investment funds. More and more investors now want to combine their quest for efficiency with social issues and personal values. However, the prospects of productivity and achievement of personal goals remain a major issue for them before committing.


  • Resume

  • Why ethical investing attracts savers

  • Making sense of your investment through socially responsible investing (SRI)

  • How to recognize an ethical investment?

  • Three benefits of solidarity funding


  • Why ethical investing attracts savers

  • Making sense of your investment through socially responsible investing (SRI)

  • How to recognize an ethical investment?

  • Three benefits of solidarity funding

Why ethical investing attracts savers

Citizens’ savings, which emerged in the mid-1980s, are involved in the fight against unemployment and alienation, allowing them to invest in companies based on solidarity. However, these are not the only goals that retail investors are pursuing. These savings can be invested in activities related to the social and solidarity economy, such as access to drinking water, health care, a healthy environment or housing. It is also about fighting the debt of the most dangerous people or against unsanitary conditions in some living quarters. Solidarity savings can also support SME financing and the provision of microcredit to individuals or SMEs.

French investors are increasingly joining solidarity funds. In 2020, according to the Fair Association (better known as Finansol), their outstanding investment exceeded 20 billion euros. Specifically, the funds invested have relocated 1,400 people, provided renewable energy to more than 8,000 households, offered organic farmers about 1,000 hectares of land, and created or maintained nearly 40,000 jobs.

If the solidarity savings are very successful, it is not only for the shares associated with this investment. In fact, the Pacte Act particularly increased penalties by allowing life insurance to become joint and several. From 1 January 2020, insurance companies must offer multi-supported life insurance contracts by transferring at least one account provided by a solidarity fund, an SRI-labeled fund or a Greenfin-labeled fund.

The healthcare context did not particularly encourage savers to invest ethically. Indeed, the main vector of solidarity savings is workers’ savings of € 11.7 billion totaling € 20.3 billion. The share paid by the companies (bonuses for profit distribution or participation in the company’s savings plans), therefore, contributed to the development of solidarity savings. On the other hand, the missions represent the health crisis associated with Covid-19, recording a sharp increase in social loans to individuals.

Making sense of your investment through socially responsible investing (SRI)

SRI funds (socially responsible investments) allow the French to finance important matters and projects. A way to participate in the real economy without sacrificing one’s beliefs. Management companies have realized this attractiveness of the French to SRI funds and are responding to this by developing more and more cost-effective products based on environmental and / or social criteria.

How to recognize an ethical investment?

The Fair Association has created a label that allows investors to check whether investment funds are solidarity investments. These investments must address two main issues:

  • Transparency.

    The saver must be regularly informed about the use of his money.

  • Solidarity.

    Between 5% and 10% of outstanding savings must be invested in solidarity activities (solidarity fund) or within a joint fund. 25% of the income or the result of savings must be paid in the form of donations to solidarity organizations selected by the investor.

In France, there are three other labels that know where the savings are going. SRI (Socially Responsible Investment), CIES (Inter-Trade Union Savings Committee) and Greenfin label. Unlike traditional savings, solidarity savings allow investors to know how to manage invested capital and support project (s). Forms of joint savings are diverse in nature (savings account, life insurance, company savings plan, collective pension plan, equity investments, etc.).

Record payments for French savings

The € 20.3 billion invested in the social and solidarity economy in 2020 is a record amount and proves the viability of this investment. This allowed € 3.8 million in donations to be paid to associations that received € 566 million in solidarity funding to support social and / or environmental projects. If solidarity savings have made the leap, it is still necessary to consider the situation. In fact, this form of savings is only 0.36% of the financial wealth of the French. In 2019, it was 0.29%. Therefore, growth is real, but relatively slow.

Three benefits of solidarity funding

Solidarity funds have many benefits for promotion.

On the one hand, their management fees may be up to 30% lower than traditional funds.

On the other hand, they enjoy special taxation. In fact, donations made as part of a joint venture are deductible from income tax up to 66%, within 20% of taxable income (75% up to € 526 for associations to help people in need).

Finally, solidarity finance offers a really interesting investment in terms of profitability. According to a FIR / Ecole Polytechnique survey conducted in 2020, 62% of SRI-labeled funds are “superior” to the average market.

This is especially true of funds, which are mainly focused on energy and environmental transition. Thus, the FCP Agir pour le climat fund from Ecofi benefits from the triple labeling of SRI, Greenfin and Finansol. In 2020, it showed an efficiency of 21.31% against, on average, 20.20% for funds in its category. Therefore, ethics and finances can go hand in hand.