Life insurance: a product for a green economy

What is the relationship between life insurance and sustainable finance? Well, one allows the other to exist and endure! Life insurance is a very popular financial investment for the French, which allows savings with the aim of transferring to a beneficiary depending on an event associated with the insured: death or survival. It is partly invested in funds that must be valued. You have the option of choosing a mono-support life insurance contract, where all your savings will therefore be placed on a single support: the euro fund, managed by your insurance company, your banker or your management company. No risk, you charge annual interest at a rate set by the government. Otherwise, you choose the multi-support contract and distribute your capital among different securities, including the Eurofund and other supports called Units of Account (UC), such as shares, bonds, Sicav, investment funds, real estate funds, etc.

What is a fund?

A fund is a kind of common pool that is created by several investors who pool their capital. This money is managed by fund managers (financial professionals) who invest – instead of the organization that collected your money – in stocks that should pay off. Depending on the funds in which this cash is placed, we are talking about sustainable financing. And greener economics is increasingly fashionable in France.
It remains to be seen which funds our savings are directed towards. Olivier Rull founded the Caravel agency in 2020 in Paris. Startup with impact 2021 and labeled Best Retirement Product 2022, the company’s mission is to guarantee a retirement for everyone in a lively world. The agency created “responsible post-retirement”. Olivier Rull is a fine connoisseur of this nebula of means that revolves around our cash, and he wants to be reassuring about the legal obligations surrounding this investment.

Funding your faith

Insurance companies, bankers… have an obligation to ask policyholders about their investment preferences. “Above all, explains Olivier Rull, to exclude all funds that invest in companies that go against the insured’s beliefs. If the person is vegan, he will ask to avoid funds that finance the pork industry. If no one is sensitive to ecology, they will reject all funds that, for example, finance fossil fuels.”
In 2021, the outstanding amount of life insurance dedicated to solidarity financing increased by 3.5 billion euros. Of the 1,700 billion euros that this investment represents, it may not seem like much, but growth and demand are growing.

societal needs

For Olivier Rull, “These figures show the societal need to green Europe. Yes, responsible savings are gaining ground.” We are therefore talking about sustainable financing, which makes it possible to finance responsible companies, associations for the protection of the environment, children, medical research, etc., to work towards the preservation of the environment, biodiversity, for a more rational urbanization. .. Above all, these funds will exclude all controversial sectors.

Labels to find around

According to an estimate published in November 2022 in Le Monde, there would be around 790 so-called green funds out of the 40,000 to 50,000 funds referred to in France in 2021.
How to find it? “We focus on the eight activity sectors that fall within the framework of energy and ecological transition, the fight against climate change and solidarity, explains Olivier Rull: green energy, clean construction, responsible industry, new technologies, clean transport, waste management, pollution control, responsible agriculture and forestry.”
Caravel’s selection criteria are defined based on the Greenfin label, created by the Ministry of Ecological and Inclusive Transformation, which guarantees the investment funds’ green quality. “We have thus filtered 1,130 investment funds to pre-select 45 corresponding to our criteria. We can say that fifteen are, in our eyes, “super green”.
If we were to name a few, they would say Sycomore Eco Solutions, Mirova Funds Europe Environmental Equity Fund, Mandarine Global Transition, Solidarité Habitat et Humanisme, Solidarity Choice, Dynamic Employment Integration… Basically, there is a choice.


Life insurance, what is it?

Life insurance is a contract whereby the insurance company undertakes to pay an annuity or capital to one or more persons, as determined by the insured at the time of entering into the agreement. Three possible contracts: contract in case of life, in case of death or mixed contract (life and death).
Banks, insurance companies, mutual companies, wealth management advisers, association of savers, are the gateways to this type of contract. The idea: prepare for retirement or provide for family or beneficiaries.
You either place your capital in euro funds (safe) or in units of account (UA), riskier but potentially more profitable.
The tax framework for this contract is complex and particularly advantageous beyond eight years of ownership.

Good to know billion euros

Outstanding equivalent of French investments in life insurance products in 2022.

900 billion euros

Outstanding in 2021 corresponds to financial investments in sustainable funds. Doubled compared to 2020.

Possible transfer

Since the Pacte Law of 2019, it is possible to transfer the capital from your life insurance to another investment (staying with the same manager), without losing tax priority.

6 out of 10 French

Say they value the environmental impact of their investment decisions.

Right to choose

From 1 January 2022, all multi-support life insurance policies must include at least one solidarity fund, one SRI fund – socially responsible investment – ​​and one “green” fund. Since January 1, 2023, brokers, service providers and financial investment advisers must take into account and respect the policyholder’s preferences regarding sustainability.


Leave a Comment