Responsible investing in life insurance: what does it mean?
Socially responsible investment (ISR) involves integrating environmental, social and governance (ESG) criteria into the selection of financial investments. In life insurance, this translates into choosing unit-linked funds that meet these criteria: ISR equity funds, green bonds, ESG ETFs, labelled SCPIs, and more.
Since the PACTE Act of 2019 and the strengthening of European regulation (SFDR), the range of responsible options in life insurance has expanded considerably. In 2026, online insurers offer an average of 50 to 100 ISR or Greenfin-labelled options in their policies, compared to barely ten just five years ago. This growth reflects rising demand from savers, but also regulatory pressure requiring financial players to integrate sustainability into their offerings.
Responsible investing is not limited to "avoiding polluters". It encompasses a comprehensive approach that evaluates companies across three complementary dimensions: the environment (carbon emissions, waste management, biodiversity), social factors (working conditions, diversity, human rights) and governance (board independence, executive pay, transparency). Companies scoring highest on these criteria are considered better managed, more resilient and potentially more performant over the long term.
Responsible investment labels
The ISR label (Investissement Socialement Responsable)
Created in 2016 by the French Ministry of Finance, the ISR label certifies that a fund integrates ESG criteria into its management in a rigorous and verifiable manner. Since its major reform in 2024, the ISR label has considerably strengthened its requirements, notably excluding companies involved in coal extraction and unconventional hydrocarbons.
Criteria of the reformed ISR label (2024):
- Exclusion of unconventional fossil fuels (shale gas, tar sands)
- Exclusion of thermal coal (5 % revenue threshold)
- Transparent and verifiable ESG methodology
- Active shareholder engagement (voting at AGMs, dialogue with companies)
- Detailed annual ESG reporting with impact indicators
- Audit by an independent body every three years
In 2026, over 1,200 funds are ISR-labelled in France, representing approximately 800 billion euros in assets. It is the most widespread and accessible label for savers, but also the one with the broadest scope, which can include funds with varying ESG commitment.
The Greenfin label
More demanding than ISR, the Greenfin label (formerly TEEC) guarantees that the fund invests in activities directly contributing to the energy and ecological transition. It totally excludes companies operating in the fossil fuels sector, with no tolerance threshold. Greenfin funds must demonstrate that at least 75 % of their portfolio finances green activities (renewable energy, energy efficiency, clean transport, circular economy, climate change adaptation).
The Finansol label
Dedicated to solidarity finance, the Finansol label certifies that the fund devotes a significant share of its investments or revenues to financing activities of social and environmental utility: social enterprise, social housing, organic farming, fair trade, microfinance. It is the label for direct social impact. Finansol funds generally offer slightly lower returns than standard funds, but they finance concrete and measurable projects.
The SFDR classification
The European SFDR regulation (Sustainable Finance Disclosure Regulation) classifies funds into three categories according to their level of sustainability commitment. This classification has become the European reference standard and is mandatory in every fund's documentation.
| SFDR category | Description | ESG requirement level |
|---|---|---|
| Article 6 | No sustainability objective | No specific ESG obligation, simple risk disclosure |
| Article 8 | Promotes ESG characteristics | Integration of ESG criteria into management, regular reporting |
| Article 9 | Sustainable investment objective | Measurable positive impact objective, strict exclusions |
Article 9 funds are the most demanding and correspond to genuine impact funds. Article 8 funds are the most widespread in life insurance and cover a broad spectrum from weakly ESG funds to highly committed ones. It is therefore essential not to rely solely on the SFDR classification to evaluate a fund's ESG quality.
The ISR offering in life insurance in 2026
Legal obligation since the PACTE Act
Since 1 January 2022, every multi-fund life insurance policy must offer at minimum:
- 1 ISR-labelled unit-linked fund
- 1 Greenfin-labelled unit-linked fund
- 1 Finansol-labelled unit-linked fund
In practice, the best online policies go far beyond this minimum. Linxea Spirit 2 offers over 80 ISR options, Lucya Cardif around sixty, and Boursorama Vie approximately 40. This depth of offering makes it possible to build a diversified 100 % responsible portfolio, which was impossible just a few years ago.
Available ESG options
The ESG offering in life insurance covers all asset classes: global equities, thematic equities (water, clean energy, healthcare), green bonds, sustainable property and solidarity funds. This diversity allows the construction of a complete responsible portfolio without compromising on diversification.
ISR ETFs are particularly attractive because they combine the low-cost index approach with ESG filtering. The Amundi MSCI World SRI, available on most online policies, offers global diversification across over 350 companies selected according to strict ESG criteria, with management fees of just 0.18 % per year. ISR-labelled SCPIs like Iroko Zen allow investment in sustainable property with an attractive yield.
ISR managed portfolios
Several providers offer managed portfolios entirely dedicated to responsible investing, providing a turnkey solution for savers who want to invest responsibly without selecting options themselves:
- Nalo: eco-responsible profile using 100 % ESG ETF options, with a personalised allocation based on the saver's project and horizon
- Goodvest: responsible investment specialist, all options are Article 9 SFDR, with a thematic approach (ecological transition, water access, forests, employment)
- Yomoni: responsible profile available with a selection of ESG ETFs
- Boursorama Vie: ISR managed mandate with an allocation of labelled funds
ISR and performance: the real picture
Performance convergence
One of the most persistent myths is that responsible investing sacrifices performance for ethics. Empirical data over the last decade shows this is not the case: ISR index performance converges with that of standard indices, with minimal gaps mainly explained by differences in sector composition.
| Index | 5-year cumulative performance | Annualised return |
|---|---|---|
| MSCI World (standard) | +68 % | 10.9 % |
| MSCI World SRI (ISR) | +64 % | 10.4 % |
| MSCI Europe (standard) | +35 % | 6.2 % |
| MSCI Europe SRI (ISR) | +33 % | 5.9 % |
The performance gap between standard indices and their ISR versions is in the order of 0.3 to 0.5 percentage points per year over 5 years. This gap is mainly explained by the exclusion of oil companies (which performed strongly in 2022 with rising oil prices) and lower weighting of the defence sector (which surged with the conflict in Ukraine). Over longer periods (10-15 years), the gap narrows further and even reverses in some years.
Favourable and unfavourable periods for ISR
ISR strategies typically outperform in certain market contexts. During economic growth phases, companies well managed on ESG criteria are favoured. During environmental or social crises, controversial companies are penalised by investors. When rates fall, "green" growth stocks (renewable energy, clean technology) benefit particularly.
They typically underperform during energy price spikes (due to oil sector exclusion), during rotation towards traditional cyclical and industrial stocks, and when rates rise sharply (as in 2022, a difficult year for growth stocks).
ISR is a sector allocation choice, not a performance sacrifice
Investing in ISR essentially amounts to making a sector allocation choice: less fossil energy, more technology and healthcare. Over the long term, this sectoral adjustment has a modest impact on overall performance. The bulk of an ISR portfolio's performance comes from the same factors as for a standard portfolio: investment duration, geographic diversification and the discipline of regular contributions.
Building an ISR portfolio in life insurance
Strategy 1: Core-satellite ISR
Build a portfolio with a core of broad ISR ETFs for global diversification and thematic satellites to target specific convictions:
- 60 % MSCI World SRI ETF (core): low-cost responsible global diversification, over 350 companies selected on strict ESG criteria
- 15 % green bond ETF (satellite): direct financing of the energy transition via green bonds
- 15 % ISR SCPI (satellite): responsible property with regular income
- 10 % Finansol solidarity fund (satellite): direct social impact, solidarity economy financing
Worked example: Lea, 31, CSR consultant
Lea, 31, a CSR consultant at a Nantes-based advisory firm, invests 400 euros per month in this core-satellite ISR allocation via her Linxea Spirit 2 policy. Convinced that her investments should be consistent with her professional values, she built a 100 % responsible portfolio. With an estimated average return of 6 % net of fees, her capital would reach approximately 186,000 euros after 20 years. For Lea, ISR investing is not a compromise: it is a conviction. She checks her funds' impact report each year and ensures her portfolio's carbon footprint decreases progressively. In 2024, her portfolio showed a carbon footprint 62 % lower than the standard MSCI World index, while delivering a performance of 9.8 %, slightly below the standard index's 10.3 % but within an entirely acceptable range for her.
Strategy 2: ISR managed portfolio
For those who prefer to fully delegate selection and management, ISR managed portfolios offer a particularly suitable turnkey solution.
The Goodvest case illustrates the most committed approach well: 100 % of options are Article 9 SFDR (the most demanding level). The allocation is organised by impact theme (ecological transition, water access, forests, employment and solidarity). Total fees amount to approximately 1.6 % per year (policy + management + options), which is reasonable for a specialised managed portfolio. The balanced profile's 2024 performance was approximately 8 %, comparable to standard managed portfolios.
Nalo offers an eco-responsible profile combining ESG equity and bond ETFs in a personalised allocation. Nalo's advantage is the automatic progressive de-risking as the project's horizon approaches, which is particularly relevant for a responsible investor with a specific objective (property purchase, retirement, children's education).
Strategy 3: Best-in-class in self-directed mode
Select the best ISR funds by category to build a bespoke portfolio. This approach requires more knowledge but offers full control over composition and fees:
- Best ISR equity fund France: Echiquier Positive Impact Europe (Article 9, ISR label, active shareholder engagement)
- Best global ISR ETF: Amundi MSCI World SRI (TER 0.18 %, over 350 holdings, strict sector exclusions)
- Best green bond fund: AXA WF Green Bonds (Greenfin label, direct green project financing)
- Best ISR SCPI: Iroko Zen (7.1 % yield in 2024, ISR label, environmentally high-performing property portfolio)
The pitfalls of greenwashing
How to detect greenwashing
Greenwashing refers to practices of presenting a fund as "green" or "responsible" without the reality of management justifying it. It is the main risk for the responsible investor: believing you are investing ethically when the selected funds have only a veneer of sustainability. Here are the main warning signs:
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Article 8 funds claiming to be "impact": Article 8 only means the fund promotes ESG characteristics, not that it has a measurable positive impact. Many Article 8 funds have minimal ESG policies. Only Article 9 funds have a genuine sustainable investment objective.
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Insufficient exclusions: a fund that excludes coal but invests heavily in oil or gas is only partially responsible. Check the complete exclusion list in the fund prospectus.
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No detailed ESG reporting: a genuine ISR fund publishes an annual impact report with measurable indicators (portfolio carbon footprint, average ESG score, implied temperature, percentage of alignment with the European taxonomy).
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ISR label without shareholder engagement: AGM voting and dialogue with companies are essential components of ISR. A fund that simply filters companies without engaging them is passive in its ESG approach.
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Misleading marketing names: a fund called "Green Future" or "Sustainable Growth" is not necessarily responsible. The commercial name has no regulatory value. Only labels and SFDR classification matter.
Systematically check the SFDR classification and labels
Never rely solely on a fund's commercial name. A "Low Carbon" ETF may simply underweight the most emitting companies without having a genuine ESG approach. Systematically consult the KID (Key Information Document) which mentions the SFDR classification, verify the ISR or Greenfin label on the official Ministry of Finance website, and read the fund's annual impact report. On Linxea Spirit 2 and Lucya Cardif, fund factsheets clearly indicate labels and SFDR classification.
Verifying the quality of an ISR fund
To ensure a fund is genuinely responsible, adopt a four-step verification process. First, consult the KID which mandatorily mentions the SFDR classification. Then verify the actual presence of the ISR or Greenfin label on the Ministry of Finance website (labelisr.fr). Read the fund's annual impact report to assess the concrete results of its ESG approach. Finally, compare the fund's carbon footprint with that of its benchmark index: a significant gap (30 % or more reduction) is a good indicator of genuine commitment.
Regulation and expected developments
The European taxonomy
The European taxonomy is the most ambitious project in sustainable finance. It classifies economic activities according to their contribution to six environmental objectives: climate change mitigation, climate change adaptation, sustainable use of water, transition to a circular economy, pollution prevention, and biodiversity protection. Funds will progressively have to publish their "green share" (percentage of investments aligned with the taxonomy), enabling objective comparison between funds.
The strengthened ISR label
Since March 2024, the ISR label excludes companies involved in coal exploitation and unconventional hydrocarbons. A further strengthening is expected for 2026, potentially excluding all fossil fuels without exception. This evolution would bring the ISR label closer to Greenfin and could reduce the number of labelled funds while increasing the quality and credibility of the label.
Strengthened advisory obligation
Since August 2022, financial advisers must systematically ask clients about their sustainability preferences (ESG preferences). This obligation has helped direct more flows towards ISR options and has made many savers aware of the existence of responsible investing. Online distributors like Linxea or Boursorama now integrate these questions into their subscription processes.
Conclusion
Responsible investing in life insurance is no longer a trade-off between ethics and performance. ISR and ESG options deliver returns comparable to their standard equivalents, with a measurable positive impact on the environment and society. The offering has expanded considerably in recent years, and it is now possible to build a 100 % responsible and diversified portfolio on the best online policies like Linxea Spirit 2 or Lucya Cardif.
Whether you opt for an ISR managed portfolio at Nalo or Goodvest, or for self-directed selection of labelled options, the essential thing is to verify the genuine quality of the options (labels, SFDR classification, impact reporting) to avoid greenwashing and invest in a truly responsible manner. ISR investing is above all a choice of consistency between your values and your savings, without giving up long-term performance.
Disclaimer
The information presented in this article is provided for informational and educational purposes. It does not constitute personalised investment advice. Past performance is no guarantee of future results. All investments carry a risk of capital loss on unit-linked options. Before making any investment decision, we recommend consulting a qualified wealth adviser.