Green Investment: Combining Performance and Positive Environmental Impact

While historically, investment was primarily measured in percentages of profitability, dividend lines, and growth curves, green investment introduces new concepts: sustainability, eco-responsibility, positive environmental impact, positive social impact, ecological and energy transition, and more. Faced with the consequences of the climate crisis, investors are no longer just scrutinizing their portfolios; they are examining them through the lens of responsibility. They are essentially seeking to reconcile performance with a positive environmental impact. So, to the question of whether it is possible to aim for profitability while reducing one's carbon footprint, the answer is clear: yes, thanks to green investment. But what are we talking about? What are the principles and advantages, and above all, how can one invest sustainably?

The Emergence of Green Investment: Good News for the Planet!

While it truly gained prominence after the COP21 in Paris in 2015, green investment is not exactly new. Its predecessor? Sustainable investment, born in the USA in the 1970s, during the Vietnam War. At that time, civil rights activists sought to have a positive impact on society, creating the very first sustainable investment fund, the Pax World Found, in 1971 – a platform for investors opposed to the war.

However, the emergence of the founding principles of green investment, or sustainable investment, can be traced back to the 1990s with the first ethical funds. Activity grew, and ten years later, at the beginning of 2001, a local initiative in San Francisco continued to pave the way with the issuance of green bonds dedicated to financing solar panels. On the other side of the Atlantic, the European Investment Bank took up the challenge of responsible investment in 2007 by also issuing the climate awareness bond: the first green bond of its kind. The World Bank followed suit in 2008, marking a new acceleration in the sector's development.

Still, the Paris Agreement in 2015 represents a decisive turning point for sustainable finance. Actors like Al Gore with Generation Investment Management have contributed to the emergence of a new ecological awareness in financial circles. Today, giants such as BlackRock, Amundi ESR, BNP Paribas AM, and Mirova are massively directing their funds towards assets aligned with environmental criteria and the climate objectives of the various COPs that have followed.

Green Investments, or Investing in Sustainability

Investing in a "green investment" involves putting money into projects, companies, or funds that support the ecological transition and environmental protection. This can include renewable energy production, energy efficiency, sustainable mobility, or carbon finance. The ambition of green finance? To finance a sustainable future while generating economic returns. In short: to combine financial performance and a positive environmental impact.

But between ethical convictions, economic logic, and marketing storytelling, it's a fact: the line between sincere commitment and greenwashing is often blurred, if not very thin.

Because beware of confusion. The landscape of sustainable investment is an archipelago of interconnected notions, terms, and acronyms that are similar but distinct, and often complementary in reality.

This is the case with "SRI" and "ESG." One does not go without the other. SRI (Socially Responsible Investment) applies ESG (Environmental, Social, Governance) criteria to guide investment decisions and allocations. It favors the best performers in each sector. As for ESG, it is an analysis framework rather than a label in itself.

50 Shades of Green That Calls for Caution

The term "green investment" encompasses a diversity of approaches: combating climate change, preserving biodiversity, energy transition, circular economy, development of renewable energies, water management, sustainable agriculture, etc. It is thus possible to invest in a company whose approach qualifies as "green" through its products, processes, supply chain, or even its customers. This broad spectrum requires investors to thoroughly examine the real intentions behind each financial product.

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The Main Green Investment Vehicles

As an investor, you have a range of possibilities for making a sustainable investment. Bonds, insurance products, real estate investments, banking products... let's take a look.

1. SRI-Labeled Life Insurance
   
   Life insurance is a flexible and tax-advantaged investment vehicle. It allows you to choose SRI (Socially Responsible Investment) unit-linked funds, managed on a discretionary or non-discretionary basis. The most innovative contracts (like those from Goodvest or Moka) offer a 100% sustainable allocation, with transparency on the projects financed.
   
   
2. SRI Banking Saving Products
   
   The French “Plan d’Épargne Retraite” (PER) ISR which is a Socially Responsible Investment Retirement Savings Plan, and the French “Livret de Développement Durable et Solidaire” (LDDS) which stands for Sustainable and Solidarity-Based Development Account, are two banking savings products solutions oriented towards responsible and sustainable objectives.
   
   The SRI PER allows you to prepare for retirement while investing in companies that respect ESG criteria. It offers attractive tax advantages, including the possibility of deducting contributions from your taxable income, and great flexibility in managing contributions – whether one-off or regular.
   
   As for the LDDS, it is a regulated, low-risk savings product designed to finance projects with a strong social and/or environmental impact. It is ideal for those who want to secure their capital while contributing to causes of general interest. Its interest rate is currently set at 2.4% (5).
   
   
3. The Equity Saving Plan
   
   The Equity Savings Plan (Plan d’Épargne en Actions in France) can become a lever for green investment by selecting stocks or funds labeled SRI, Greenfin, or ESG. It allows you to invest in listed companies committed to the energy transition, clean technologies, or the circular economy, while benefiting from tax advantages after five years of holding. By orienting your PEA towards green securities, you support more sustainable finance without sacrificing performance. It's an interesting solution for reconciling profitability and environmental impact.
   
   
4. Green ETFs
   
   Green ETFs (Exchange Traded Funds) make it easy to invest in a basket of stocks that meet ESG criteria. They track indices composed of companies involved in the energy transition, renewable energies, or the reduction of carbon emissions. Green ETFs offer broad exposure to responsible markets with reduced fees. Integrated into a PEA or a securities account, they represent a simple solution for actively participating in sustainable finance and supporting the green economy. Some examples:
   
   
   • iShares Global Clean Energy UCITS ETF: Tracks the largest global companies in renewable energies (wind, solar, etc.), such as Enphase Energy or Orsted.
   • Lyxor MSCI World ESG Leaders Extra: Invests in international companies with high ESG ratings, excluding controversial sectors (weapons, tobacco, coal).
   • BNP Paribas Easy ECPI Global ESG Blue Economy: Targets companies linked to the blue economy (ocean preservation, marine energies, sustainable fishing).
   • Amundi MSCI Europe Climate Action UCITS ETF: Focuses on European companies most active in reducing their carbon footprint.

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5. Green Bonds
   
   Green bonds are sustainable investment vehicles worth considering. These are debt securities issued to finance ecological projects. Their stable returns attract institutional investors. A sign of the enthusiasm for green bonds, France will issue 15 billion euros of green bonds in 2025.
   
   
6. Ecological Crowdfunding
   
   Platforms like Lendosphere, Enerfip, or Solylend allow direct investment in solar, wind, or biomass projects, among others.
   
   
7. Eco-Responsible Real Estate
   
   Reconciling real estate and a positive environmental impact is possible. And it is even the specialty of vehicles such as green SCPIs (Sociétés Civiles de Placement Immobilier - Real Estate Investment Trusts) like Novaxia R or Kyaneos Pierre. They invest in properties with a view to transforming them into high energy performance housing. Stable rental yields, long-term appreciation, and potential tax advantages are among the other strengths of this vehicle.
   
   
8. FCPRs
   
   FCPRs (Fonds Communs de Placement à Risques - Venture Capital Funds) focused on greentech offer the opportunity to invest in innovative startups. The advantages and characteristics to know? High potential profitability for products intended for informed profiles because capital is not guaranteed.
   
   
9. Carbon Tokenization / Blockchain Assets
   
   Blockchain allows for real-time tracking of carbon credits generated or exchanged. Startups like KlimaDAO offer tokens backed by certified projects.
   
   
10. Homaio: Investing in European Carbon Allowances
    
    At Homaio, we offer an original sustainable investment solution with an intrinsically positive environmental impact: the purchase of carbon allowances from the EU ETS (European Union Emissions Trading System).
    
    This carbon market requires certain polluting companies to hold allowances to emit CO₂. Each year, the European Union reduces the total number of available allowances to encourage emission reductions.
    
    Homaio thus allows individuals to buy and remove these allowances from the market. In concrete terms, this reduces the quantity available for companies and increases the cost of pollution.
    
    

Performance and Profitability: A Winning Duo in Green Investment

Contrary to popular belief, green investments do not sacrifice profitability. Some studies show that SRI and climate funds exhibit either comparable performance to traditional investments or even superior performance .

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But what are the drivers of performance for sustainable investment vehicles?

The growth in demand for clean energy, regulatory pressure, and technological innovation play a key role. Companies that anticipate ESG standards often prove to be more agile and attractive in the long term.

However, caution remains necessary. Some labeled funds have high management fees. The lack of reliable extra-financial data can lead to speculative bubbles. And some "green" startups can fail despite their promises.

Engaging with Green Investments and Avoiding the Pitfalls of Greenwashing

In recent years, green finance has become a trendy term. Maybe too trendy... Many offers are adorned with green without any real ecological basis. "Sustainable" funds still finance oil giants; labels are awarded without any requirement for results. This is the drift of greenwashing. It threatens both the credibility of the sector and the trust of savers. To avoid it, you need to learn to read between the lines.

Greenwashing is a trap, but a trap that can be avoided. The challenge: to orient your investment decisions towards truly sustainable vehicles with a real impact on climate.

But how can you avoid falling into the trap of greenwashing? Selection criteria and labels help to distinguish the true from the false, the green from the gray.

Understanding and Using ESG Criteria to Avoid Greenwashing

ESG criteria evaluate a company's Environmental, Social, and Governance practices. Example: waste management (E), respect for human rights (S), financial transparency (G). But a good ESG score does not equate to a coherent climate strategy. TotalEnergies can obtain a good G score without being a player in decarbonization.

The Main Labels Under Scrutiny

Labels are designed to guide investors in their choices. Several exist.

• The Greenfin label, created by the French State, is the strictest: it excludes fossil fuels and nuclear energy and requires precise traceability of environmental impacts.
• The SRI label, broader in scope, evaluates the integration of ESG criteria. Under reform since 2023, it has been criticized for its permissiveness. In 2023, the reform of the SRI label began to strengthen its requirements regarding the exclusion of fossil fuels and the transparency of environmental impacts. This evolution responds to the growing pressure from investors and NGOs who denounced its excessive tolerance towards certain sectors.
• Finansol certifies solidarity-based savings products.
• The SFDR (Sustainable Finance Disclosure Regulation) has imposed a classification of funds since 2021: Article 6 (without ESG ambition), Article 8 (promoting ESG criteria), Article 9 (impact funds).

The European Taxonomy

The EU has built a green taxonomy to classify economic activities considered sustainable. Based on the "Do No Significant Harm" principle, it aims to standardize sustainable finance. A company or fund will soon be able to prove its alignment with this taxonomy.

Our Advice for Getting Started

Structuring a Coherent Green Portfolio in 2025

For an investor concerned about their environmental impact, structuring a portfolio of green investments requires rigor and coherence. First, one must analyze their risk profile, investment horizon, and objectives: financial performance, positive impact, diversification, etc.

Numerous sustainable solutions exist: SRI life insurance, low-carbon ETFs, labeled funds, green bonds, ecological crowdfunding, sustainable SCPIs, or participatory financing in renewable energy projects. One can also invest via a responsible PER (Retirement Savings Plan) or in the shares of companies committed to the energy transition.

Platforms like Goodvest, Homaio, or Lita.co offer high-impact investment products adapted to different investor profiles. These actors integrate ESG criteria into their management while ensuring transparency on performance and ecological impacts. The watchword: combine profitability, purpose, and sustainability.

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FAQ – Green Investment: Everything You Need to Know

1. What is a green investment?

A green investment involves placing your money in projects or companies that have a positive impact on the environment: renewable energies, sustainable mobility, energy efficiency, resource preservation, etc. It is part of a logic of economic performance and ecological impact.

2. What is the difference between green investment, SRI, and ESG?

Green investment directly targets ecological sectors. SRI (Socially Responsible Investment) evaluates companies according to environmental, social, and governance (ESG) criteria.

3. Are these investments as profitable as traditional investments?

Yes, numerous studies show that sustainable investments offer comparable, or even superior, long-term performance.

4. Which sectors offer the most potential for green investment?

Key sectors include renewable energy (solar, wind), decarbonisation, energy renovation, electric mobility, the circular economy, and sustainable agriculture. The low-carbon building sector is also attracting more and more investors.

5. What labels or guarantees can help in choosing a good green product?

In France, the ISR, Greenfin, or Finansol labels provide reliable benchmarks. At the European level, the green taxonomy aims to standardize what can truly be qualified as a sustainable investment.

6. Can individuals act directly by reducing companies' carbon allowances?

Yes, thanks to initiatives like Homaio, individuals can buy allowances from the European market (EU ETS) to seize them, preventing polluting companies from using them. This is an innovative way to put pressure on emitters.

7. What are the risks associated with green investment?

Like any investment, there are market risks. It is also important to watch out for greenwashing: some products claim to be "green" without any real impact. Hence the importance of analyzing funds, verifying labels, and seeking guidance.