You want your money to work for you, but also for the planet? You wonder how to combine financial performance with ecological convictions without falling into marketing traps? What if investing was one of the most powerful levers to accelerate the transition towards a more sustainable world?
Investing in the environment is no longer just a trend; it is a necessity and a tremendous opportunity. It is about giving a profound meaning to your savings by turning them into a driver of positive change. Far from being a sacrifice, this choice can prove wise for your wealth. Let us discover together how to make finance your best ally for the planet.
What is a green investment?
A green investment, also called an eco-responsible investment, is an approach aimed at generating financial returns while producing a positive and measurable impact on the environment. The idea is simple: to direct capital towards companies, projects, or technologies that actively contribute to the ecological transition. This can range from financing a wind farm to investing in a company innovating to reduce its water consumption, or supporting decarbonization technologies.
However, the world of green finance is more complex than it seems. The impact of your money is not always transparent, and some marketing claims can be misleading. Did you know, for example, that an average savings portfolio of €25,000 can emit up to 11 tonnes of CO2 per year? That is equivalent to five round trips between Paris and New York by plane. Your money therefore has weight, and it is crucial to ensure that it weighs on the right side of the scales. The challenge is to go beyond mere declarations of intent to finance concrete actions.
The advantages of an eco-responsible investment
Choosing to direct your savings towards sustainable solutions is not only a gesture for the planet but also a relevant wealth strategy. Here are the main benefits that could convince you:
- Positive and concrete impact: Your money becomes a tool for change. It helps finance projects that reduce carbon emissions, protect biodiversity, improve resource management, or develop clean energy.
- High growth potential: The ecological transition is one of the greatest economic challenges of our century. Sectors related to the environment, such as renewable energies, energy efficiency, or the circular economy, are expected to experience significant growth. Investing in these areas means betting on the economy of tomorrow.
- Portfolio diversification: Green investments allow access to new asset classes and sectors, which can reduce your overall portfolio risk while contributing to a meaningful cause.
- Alignment with your values: More and more savers seek their investments to reflect their personal convictions. Sustainable investment allows you to grow your wealth without compromising your values.
- Potential tax advantages: Some savings products or green investments may offer tax incentives, making the operation even more attractive financially.
How to ensure that an investment is truly ecological?
When it comes to investing responsibly, vigilance is your best ally. The term “green” is sometimes misused. To make informed choices, it is essential to understand the tools at your disposal but also their limits.
The challenge of greenwashing and the limits of labels
Greenwashing, or eco-labeling deception, is a misleading marketing practice whereby a company or investment fund portrays itself as ecological in a way that does not reflect the reality of its activities. To help investors navigate this terrain, several labels have been created.
The best known in France is the ISR (Socially Responsible Investment) label. While it has the merit of existing, it has significant limitations for an investor aiming for a purely environmental impact. Indeed, the ISR label is based on an ESG (Environmental, Social, and Governance) analysis, meaning a fund may be rated well for its social practices while having a mediocre environmental impact.
For a more precise focus, other labels are more demanding:
- The Greenfin label: Created by the Ministry of Ecological Transition, it is considered one of the strictest. It guarantees that funds invest in activities linked to the energy and ecological transition while explicitly excluding controversial sectors such as fossil fuels and nuclear energy.
- The "Article 9" classification (SFDR): At the European level, the SFDR (Sustainable Finance Disclosure Regulation) classifies financial products according to their degree of sustainability. An "Article 9" fund has sustainable investment as its primary objective.
Beware of greenwashing!
To avoid falling into the greenwashing trap, adopt the right reflexes:
- Do your research: Do not rely solely on marketing brochures. Look for impact reports, independent analyses, and understand exactly where your money is invested.
- Demand transparency: Favor actors who communicate clearly and in detail about their portfolio composition and selection methodology.
- Check the evidence: A "green" claim must be supported by concrete and measurable data (e.g., tons of CO2 avoided, share of renewable energies financed).
Beyond labels: the question of real impact
Labels are a good starting point, but the real question is the actual impact. Financing an already virtuous company is good. Financing a company that needs capital to green its production tools (called the Best in Class approach) is also an impact strategy.
But there is an even more direct approach to fight global warming: tackling the core problem, i.e., the right to emit CO2. The carbon quota market, or Emission Trading System (ETS), was designed for this. The most polluting companies must buy "pollution rights" to cover their emissions.
Did you know? Each carbon quota represents one tonne of CO2. By buying these quotas and removing them from the market, one prevents industries from using them. This action reduces the number of permits available, raises their price, and thus encourages companies to invest in less polluting technologies to reduce their costs.
At Homaio, we make this climate finance tool, previously reserved for experts, accessible to all. We allow you to buy carbon quotas not to speculate but to remove them permanently from the market. It is a direct impact investment: every euro invested translates into a quantity of CO2 that will never be emitted.
The different types of green investments available in 2024
The landscape of green investments has considerably expanded. There are now solutions adapted to every investor profile, time horizon, and risk level.
Sustainable life insurance: a versatile envelope
Life insurance is one of the favorite investments of the French for its flexibility. It is a fiscal "envelope" within which you can put various investment supports. More and more contracts now offer unit-linked funds (UC) labeled ISR or Greenfin. These UCs allow you to invest in equity or bond funds focused on ecological themes.
Unlike euro funds, where capital is guaranteed, unit-linked funds carry a capital loss risk but offer a much higher long-term performance potential. You can thus invest in specialized funds:
- ETFs (trackers) on renewable energies
- Thematic funds on water or waste management
- Funds invested in companies leading the ecological transition
| Aspect | Description |
|---|
| Principle | Savings contract allowing investment in funds (unit-linked) focused on environmental themes. |
| Objective | Combine the potential growth of financial markets with a positive impact, while benefiting from the favorable tax framework of life insurance. |
| Advantages | Wide variety of supports, flexible payments, attractive taxation after 8 years, estate planning tool. |
| Disadvantages | Capital loss risk on unit-linked funds, management fees to monitor. |
ESG Retirement Savings Plan (PER): thinking about the future on all fronts
The Retirement Savings Plan (PER) is a solution designed to prepare for your old age. Like life insurance, it allows investment in funds via managed or free management. PER ISR integrates ESG criteria in their strategy, and some go further by focusing on green funds.
The main advantage of the PER is its tax benefit upon entry: your contributions can be deducted from your taxable income, generating an immediate tax saving. It is an excellent way to prepare for your retirement while financing the ecological transition. In return, your savings are locked until your retirement departure (except for early release cases such as purchasing a primary residence).
Green bonds: financing concrete projects
A green bond is a debt security issued by a company, a community (such as the City of Paris), or an international organization (such as the World Bank) with the exclusive purpose of financing projects with environmental benefits.
When you buy a green bond, you lend money to the issuer, who commits to using it for a specific sustainable project (solar power plant, building energy renovation, etc.) and to repay the capital by an agreed date, with interest.
The main advantage is traceability: the issuer must provide regular reports on the project's progress and its environmental impact. It is an interesting solution for prudent investors since bonds are generally less risky than stocks. You can access them through a securities account or bond funds held within life insurance or a PER.
Savings accounts: a solution for precautionary savings
For your short-term and precautionary savings, the Livret de Développement Durable et Solidaire (LDDS) is a well-known option. Its capital is guaranteed, and funds are available at any time. Part of the collected savings is supposed to finance social and environmental projects.
However, the LDDS suffers from a lack of transparency. It is difficult to know precisely how banks and the Caisse des Dépôts use these funds. To address this need for clarity, new specialized "green savings accounts" are emerging, offering full traceability of funds towards targeted projects, such as building energy renovation.
Expert advice
Clearly distinguish between your precautionary savings and your investment savings. Savings accounts (LDDS, etc.) are perfect to secure money you might need quickly, but their return, often below inflation, is not suited for long-term wealth growth. For that, turn to investments like life insurance, PER, or direct impact investments.
Direct investment and alternative solutions
Beyond classic envelopes, other solutions allow green investing:
- Crowdfunding for sustainable projects: Participatory financing platforms allow you to lend money or take equity in ecological projects (solar farms, circular economy startups...). The return potential can be high, but the risk as well (total capital loss). This is an option to reserve to a small part of your portfolio.
- Forestry investment: You can acquire forest plots, alone or via Investment Forestry Groups (GFI). Revenues come from wood cutting, hunting rights, or subsidies. It is a tangible investment that contributes to carbon sequestration and biodiversity.
- Green real estate investment companies (SCPI): Civil Real Estate Investment Companies let you invest in professional real estate (offices, shops). So-called "green" SCPIs specialize in acquiring and managing buildings with high energy performance, often labeled (HQE, BREEAM).
- Green Venture Capital Funds (FCPR): Venture Capital Funds invest in unlisted companies, often innovative. Some focus on green infrastructure (wind farms, biomass heating networks...), offering high return potential with significant risk and lock-in periods.
Building your green portfolio: a strategic approach
Faced with this diversity of options, how do you build a portfolio that reflects you? The first step is to define your objectives. Do you want simply to exclude the worst industries? Finance the best? Or have a direct and measurable climate impact?
You can opt for personal management via a Plan d'Épargne en Actions (PEA) or a securities account, selecting green companies’ stocks or ecological ETFs yourself. This approach requires time, knowledge, and good discipline to ensure sufficient diversification.
The alternative is managed investment, offered in life insurance policies and PERs. You delegate portfolio management to professionals who build and manage for you a portfolio aligned with your risk profile and sustainable convictions.
And what if, beyond financing virtuous companies, you could directly act on the primary cause of climate change? This is where climate finance and carbon quotas offer a new and powerful way. By choosing to invest in the withdrawal of carbon quotas, you do not support a company hoping it will reduce its footprint; you cause that reduction by making pollution more expensive. It is a different lever of action, complementary to other green investment forms, placing your capital at the heart of the economy’s decarbonization mechanism.
Green investing has matured. It is no longer a niche for activists but a full investment field, rich and diverse. Whether through funds, bonds, real estate, or innovative mechanisms like carbon quotas, solutions to align finance and ecology are now within your reach. The key to success lies in an informed approach: educating yourself, understanding impact mechanisms, being wary of promises too good to be true, and choosing partners who combine expertise, transparency, and convictions. Your wealth can be much more than a mere sum of money; it can become the reflection of your hopes for a sustainable future.
How to start investing green with a small budget?
Absolutely. Green investing is not reserved for large fortunes. Many life insurance policies are accessible from just a few hundred euros (for example, €300 with Mon Petit Placement). You can set up scheduled payments of a few tens of euros per month to invest gradually. Crowdfunding also allows participation in projects with small amounts.
Is a green investment as profitable as a traditional investment?
This is a legitimate question. Numerous studies show that, in the long term, sustainable investment strategies perform as well or even better than traditional strategies. Companies integrating environmental issues into their models are often better managed, more innovative, and less exposed to tomorrow’s risks (regulations, climate disasters). However, as with any investment, past performance does not guarantee future performance and capital loss risk always exists.
What is the difference between an ISR fund, Greenfin, and Article 9?
To simplify:
- ISR: The broadest. It analyzes Environmental, Social, and Governance (ESG) criteria. A fund can be ISR thanks to good social practices even if its environmental impact is limited.
- Greenfin: The strictest on the environment. It guarantees the fund invests in ecological transition activities (renewable energies, circular economy...) and excludes "brown" sectors (fossil energies, nuclear).
- Article 9 (SFDR): The European standard for funds with a clear sustainable investment objective. It is a mark of seriousness, often aligned with the Greenfin philosophy.
How can I concretely measure the impact of my ecological investment?
Measuring impact is the big challenge of sustainable finance. For traditional funds, this goes through impact reports that may mention indicators such as "carbon footprint of the portfolio" or "share of turnover from green activities." For green bonds, the impact is linked to the financed project (e.g., MWh of renewable energy produced). For solutions like those offered by Homaio, the measurement is direct and transparent: the number of tons of CO2 that your investment has helped remove from the market is displayed on your dashboard. It is one of the most concrete ways to visualize your contribution to fighting climate change.
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