Paris offers a new model for the world
The front line in the war on carbon emissions is in cities. More than half of the world's population live in urban areas, and 1.5 million people are added to the city total each week. Cities produce 85 per cent of global GDP, and whilst they occupy only 0.5 per cent of the world's land, they produce 80% of emissions.
But what impact can a financial actor like a bank have on cities? How will the financial sector accompany the transition towards more sustainable cities?
A city hoping to answer this question is Paris. The City of Lights, or the City of Love, now hopes to become the City of Sustainability.
The mission began in 2007, when President Nicholas Sarkozy declared that Paris would be transformed into a 21st Century icon of progressive development. It would be lead the way on low emissions. It would be a happier place, with better social integration of different communities. Public transport would be expanded to unite districts. The river Seine would be used as a transport route, along with tributaries. And it would be a smart city, with the government and private sector actors harnessing and sharing data.
The declaration was bold. Paris is tough testing ground for ideas like these. It's an ancient capital: a fusion of a medieval legacy, Baron Haussman's radical remoulding between 1853 and 1870, and the original home of experimental modern architects. The history is an obstacle. Unlike in Shanghai or Brasilia, the government can't simply knock down whole blocks and rebuild them anew.
At the heart of the project is a Grand Paris Express. This is one of the largest transportation projects in Europe. It's four new train lines totalling 200km long, with 68 new stations, 90 per cent underground. Every day two million passengers will ride the lines.
The Grand Paris Express is being built with sustainability woven into every aspect.
"What is interesting is the governance," says Annick Jager of Societe Generale. "It takes into account many subjects like real estate, other transportation modes, the reconstruction of suburbs, clusters around different types of technology, and universities. The main lesson is that we are really taking a holistic view of how a bit city evolves."
And what a place to deploy this way of thinking: ""100 to 200 bn additional GDP are expected around this major project ," says Jager. "It's the second great development of Paris after Baron Haussman!"
For companies working on the project it's the perfect chance to showcase their thinking around sustainability. Christophe Dumas, director of innovation at Societe Generale's real estate development arm Sogeprom, says, "Our new way when we make tenders is to put the human point of view in the centre of the project. First, we work with many different people, including engineering companies and sociological companies, to think about how people are going to live. This is the first step of designing. After that we move onto the technological point of view."
Dumas stresses: "We never put technology first in a project. The human now comes first. If the project doesn't work for the community then it does not go ahead."
Naturally, technology matters too. So Sogeprom seeks out and forms partnerships with companies able to make a difference. "We have strong relationships with start-ups in the sustainability space," says Dumas. "But it's not about finding the 'most exciting'. It's about technology which is actually useful. Again, we are providing services to people, so we have to find something that raises efficiency in terms of less waste or less energy."
Clever thinking can be enough. For example, a car park with smart sensors can help drivers find an empty space faster. It's great for drivers, reduces congestion, and cuts emissions.
"We have a storage system for power," says Dumas. "This means we can store energy from photo-voltaic panels, and surplus energy produced by elevators. We can store electricity for later use or recycle it for other buildings."
Sogeprom is also a leader in biodiversity systems, which help purify the air in buildings.
Finance plays a key role in taking innovation from the lab to the city. Sometimes it's about working out the optimum business model for a disruptive technology. Mobility as a service is a great example. "Users can hire cars when they need them," says Jager of Societe Generale. "But a big question is how that asset is put on a balance sheet. Someone needs to own it, but who?"
The hope is the one day all cities can be designed along the models developed for Grand Paris. Africa, in particular, needs radical rethink of the way it's major urban conurbations grow. The surge in population has, by one forecast, projected French as the most spoken first language in the world by 2050 – a view endorsed by President Macron. The number of Africans living in cities will rise from 14 per cent in 1950 to more than half by 2050.
Mario Pezzini, director of the OECD's development centre, has said there must be a holistic view of how cities are shaped, tying together issues such as jobs and infrastructure: "It is not possible to separate these issues … What we are really talking about is how do you create conditions and services, not only to provide a better quality of life, which is crucial, but also to create opportunities for economic development … If you don't create infrastructure, the jobs will not be there,"
Sustainable urban development is at an early stage. The Grand Paris project is only a decade old. Pioneers such as Sogeprom have been using sustainable development principles for around six years. Others in the sector are still grappling with the basic ideas.
Paris can be the launchpad for the ethos to a global audience. Over the next few years it will be in the public eye as host of the 2024 Olympic Games, as well as the 2018 Ryder Cup, amongst other events.
The development plan will take 30 years to complete. The philosophy behind Grand Paris is designed to ensure the planet thrives into the next century.