Impact Based Finance
To answer global environmental & social emergencies, many companies rethink their business models to generate a sustainable future for all, while creating long-term value for their stakeholders. Yet, the transformation pace is too slow.
IMPACT & STRUCTURING ADVISORY TO CO-CREATE AND FINANCE NEW BUSINESS MODELS
The SDG investment gap which was initially estimated at approximately US$2.6 tr/year, was revised upwards following the Covid-19 crisis at US$3.7 tr/year, calling more than ever for new business and financing solutions. Societe Generale developed a disruptive and unique approach focused on impacts. Impact-Based Finance addresses the need for advice from private companies and public entities that are shifting their businesses to deliver the SGDs in existing or new markets but struggle to finance their investments.
We assist our clients in shifting their business models to fully include environmental and social impact in their projects to facilitate funding and accelerate scale up. Our approach is threefold:
- Augment impact: by mutualizing costs and providing multiple services, to generate more social, environmental & economic impacts as well as additional revenues. Reducing the “cost-to-impact” leads to increased profitability, stronger resilience and financial attractivity.
- Enhance credit: we provide expert structuring advice to de-risk transactions, using blended finance mechanisms when relevant and to structure aggregation vehicles to reach critical size for placement in the global private debt and equity markets.
- Leverage digitalisation: throughout the process, we focus on the use of digital technologies to combine services, create more value, as well as collect and analyse data on operational performance, payment track record and impact to demonstrate a project’s success and support its scale up.
We focus on four key impact value chains with a particular emphasis on market segments with high impact and scale up potential but whose growth is currently limited by weak business models:
• SMART INFRA-STRUCTURE AND SUSTAINABLE CITIES
• ACCESS TO CLEAN ENERGY AND ENERGY EFFICIENCY
• WATER MANAGEMENT AND SMART AGRICULTURE
• CIRCULAR ECONOMY AND WASTE MANAGEMENT
We also integrate biodiversity into our approach with the objective to promote “nature positive” solutions in each of our value chains. Examples of projects include “multi-impact” off-grid solar power in rural and remote areas in developing countries, combined with access to connectivity, healthcare and education as well as smart agriculture; energy efficiency investments in buildings, industries and cities with “product as a service” business models, impact data monetization, etc.
Our holistic impact-based approach “augments” projects to deliver energy transition, sustainable economic growth, job creation and social well-being.
With both an Originate-To-Distribute and Distribute-To-Originate strategy, the Impact Based Finance group is product agnostic and acts as a catalyst to mobilize the capabilities of Societe Generale to deliver the best financing solutions for corporate clients and offer suitable investment opportunities to our investor clients. Thanks to Impact Based Finance, our clients can also benefit from the collective intelligence and best practices derived from our active participation in global initiatives around impact assessment, digital innovation, energy efficiency, sustainable cities and blended finance.