Retail social impact investment grew by €2bn in France in 2024, an increase of 7% on the previous year, according to the latest Social Impact Finance Barometer from FAIR and La Croix.
France’s social impact investment association FAIR and daily newspaper La Croix have published the 23rd annual Social Impact Finance Barometre, revealing a 7% increase in retail social impact savings and investments in 2024.
The increase of €2bn over the year, which brings total retail social impact finance to €29.4bn, marks a small increase from 2023 when savings grew by €1.2bn over 12 months, or by 4.5%. FAIR said that figures released in last year’s barometer contained inaccuracies but that these had since been corrected to ensure an accurate comparison with this year’s figures.
However, the increase in 2024, which includes both net savings and investments and market appreciation, represents a negligible increase in social impact savings as a share of total French household savings, which rose from 0.45 % in 2023 to just 0.46% in 2024.
Speaking to Impact Investor, Julia Robin, advocacy officer for FAIR, repeated calls made last year by the organisation that much more investment was needed to address social inequality and respond to today’s environmental challenges. However, she added that overall they are pleased with the results, which demonstrate a continued commitment to social impact finance on the part of French savers.
“The pandemic years focused people’s attention on the value of social impact finance and accelerated the rate of savings, albeit we are now seeing a slight slowdown. This could have been driven by a number of factors, including mounting pressures on the cost of living, geopolitical instability and recent government incentives to invest into tech, which may have redirected savers’ attention.
“We are nevertheless encouraged by this year’s figures and that French social impact finance has continued to grow despite these headwinds,” said Robin, adding that FAIR’s aim was to grow social impact finance to 1% of total French savings by 2030.
Savings channels
As with previous years, the barometer covers three solidarity-based finance channels: solidarity-based savings products provided by banks and mutual insurers, employee savings schemes, and direct investment through shares and bonds issued by social enterprises.
Employee savings schemes, which represent €16.3bn, or 60% of the total, make up the lion’s share of France’s social impact finance and grew by 6% over the year, with a net inflow of €600m, and a gross increase of €900m. The majority of these savings were made through 90/10 funds, which invest between 5% and 10% of their assets into accredited ‘solidarity-based enterprises of social utility’. These are unique to France and a legal requirement in all employee savings schemes offered by companies with 50 or more employees.
The bank and insurance channel also grew by 7% to €11.9bn but the biggest increases were recorded in the direct investment channel into social enterprises. Despite being the smallest channel by a large margin, direct investments grew by 10% to €1.2bn.
Robin said investors’ increasing appetite for impact-focused solutions combined with the growing maturity of this segment, is driving growth in direct investments.
“Many social entrepreneurs now have robust business models, reassuring funders who want to combine returns with social utility. It’s very likely that this channel will become even more attractive as ESG criteria and sustainable development goals become integral to investment strategies,” she added.
Some of the enterprises to have benefited from direct contributions include 3 Colonnes, a cooperative which works to support elderly home care, Habitat et Humanisme, an association which focuses on improving housing and social inclusion for vulnerable people, and Terre de Liens, a civic movement promoting the rights and access to land of smallholder and sustainable farmers.
Impact results
Total investments made through all three channels have also rebounded after experiencing a dip last year, rising to €739m -an increase of 8% over 12 months.
These and past investments have been translated into tangible impact, with FAIR and La Croix reporting that in 2024, 2,400 hectares of organic agriculture was financed, 168 farmers were supported, 6,675 people were supplied with electricity from renewable sources, 3,000 people were rehoused, and 21,000 jobs were created or maintained. In addition, 29 microfinance institutions, agricultural cooperatives and social enterprises were financed in developing countries, improving access to essential goods and services.
Comments from Patrick Sapy, CEO of FAIR, echo Robin’s view that enthusiasm for solidarity-based products remains strong.
“Nearly 2 million savers now understand that solidarity finance is not only based on strong values but also offers concrete, useful solutions for all French people. Beyond this, raising awareness among the general public and distributors offering these products remains central to dispelling misconceptions and showing that returns and impact are not mutually exclusive.”
