FRANCE Trends and Developments Contributed by: Rima Maitrehenry, Racine
• the introduction of a minimum compulsory share of investment in unlisted assets in life insurance contracts and retirement savings plans. New climate savings plan A new savings plan for individuals of less than 21 years old the ( plan d’épargne avenir climat , or PEAC), has been created to support the financ - ing priorities of the French economy and the eco - logical transition. The PEAC may be distributed by banks and insurance companies. It takes the form of a capitalisation contract distributed by insurers or a securities account combined with a cash account. Payments made into the PEAC are allocated to the acquisition of financial securities that con - tribute to the financing of the ecological transi - tion, as well as financial instruments with a low level of risk exposure and whose issuers have their registered office in France, in another EU member state or in another state party to the Agreement on the European Economic Area that has entered into an administrative assistance agreement to combat tax fraud and evasion. The PEAC benefits from favourable income taxation and social security contributions. The existence of this new savings plan does not sub - stantially affect private equity fund managers, but it does demonstrate the public authorities’ determination to raise awareness of the chal - lenges of the ecological transition. Minimum share of green investments in life insurance contracts The Act introduced a general reference obli - gation regarding certain unit-linked ( unités de compte ) life insurance contracts that have obtained government-recognised labels meet - ing ecological transition or socially responsible
investment objectives. It requires life insurance contracts to include at least one unit-linked con - tract made up of 5% to 10% securities issued under government-approved labels. The decree setting out the list, and which issues proce - dures and criteria for state-recognised labels for financing the energy and ecological transition or for socially responsible investment (adopted on 13 December 2023 – Décret 2023-1180), refers to two labels: • the Investissement Socialement Responsa - ble (ISR) label, whose main criteria are an elimination of the 20% worst values from an investment universe as well as certain com - mitment obligations (the ISR label is governed by Decree 2016-10 of 8 January 2016); and • the France finance verte (Greenfin) label, which consists of a minimum percentage of investment in sustainable sectors (energy, construction, waste management, industry, etc) and exclusions (coal, gas, nuclear) (the Greenfin label is governed by the Environ - mental Code). These two labels are currently under review. Additional labels may be added in the future. This measure will encourage fund managers to set up private funds eligible for either ISR or Greenfin labels. However, these labels may not be available for all alternative investment strate- gies: most ISR labels are granted to real estate funds, and most Greenfin labels are granted to infrastructure funds. Minimum compulsory share of investment in unlisted assets in life insurance contracts and retirement savings plans The Act gives policyholders easier access to unlisted assets in order to help finance the green industry. The Act makes it compulsory for
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