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TRANSCRIPT
Policy Webinar #17
Unifying For Impact:
who are the facilitators
of the social impact investment ecosystem?
Tuesday, 24th September 2019 | 15:00–16:30 CET
WELCOME
Bianca Polidoro
Policy Manager
European Venture Philanthropy Association
(EVPA)
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3
Policy @ EVPA
CatalystThought Leader
4
Policy Webinar Series
5
201425.06.2014 Policy Webinar #1 | EuSEF Regulation
25.09.2014 Policy Webinar #2 | Impact Measurement
2015
05.03.2015 Policy Webinar #3 | Social Impact Bonds in the EU
17.06.2015 Policy Webinar #4 | How can VP/SI Practitioners access EU funding
23.09.2015 Policy Webinar #5 | Social enterprises and Public Procurement
2016
16.03.2016 Policy Webinar #6 | Crowdfunding for Impact
21.06.2016 Policy Webinar #7 | Ordinary People as Social Impact Investors
23.11.2016 Policy Webinar #8 | EU Funding Update for VP/SI Practitioners
2017
22.03.2017 Policy Webinar #9 | Foundations & Social Impact – Going beyond grant-making
14.06.2017 Policy Webinar #10 | The Sustainable Development Goals & VP/SI
12.12.2017 Policy Webinar #11 | Fostering public private collaboration to address social issues
2018
11.04.2018 Policy Webinar #12 | How EuSEF’s recent reform can impact the VP/SI sector
20.06.2018 Policy Webinar #13 | Outcome Funds - Challenges and Opportunities
11.12.2018 Policy Webinar #14 | Invest EU: What‘s in it for venture philanthropists and social investors?
2019
06.03.2019 Policy Webinar #15 | Incubators and Accelerators: Bridging the gap for new impact ventures in Europe
13.06.2019 Policy Webinar #16 | Social Proofing, Impact Measurement and InvestEU
Unifying for impact:
who are the facilitators
of the social impact investment ecosystem?
Welcome to our e-Speakers!
7
Jose Luis Ruiz de Munain
Founder CEO
Foro Impacto
Cyrille Langendorff
Managing director of the Private Equity
and International Affairs Department
Crédit Coopératif (CC)
Uli Grabenwarter
Deputy director of Equity Investments
European Investment Fund (EIF)
Programme
Time Description Speaker
15:00 – 15:10Welcome to participants
Introduction to the topic, agenda and speakersBianca Polidoro, EVPA
15:10– 15:25 France NAB Experience Cyrille Langendorff, Crédit Coopératif
15:25 – 15:40 Spain NAB Experience Jose Luis Ruiz de Munain, Foro Impacto
15:40 – 15:55 European Priorities and Challenges Uli Grabenwarter, EIF
15:55 – 16:20 Q&A with speakers All panellists
16:20 – 16:30 Concluding remarks and next steps Bianca Polidoro, EVPA
8
National Advisory Boards (NABs)
• NABs: Catalysing impact investment in their countries by connecting several stakeholders to facilitate the growth in the social impact sector
• GSG: o Established in August 2015o Catalysing impact investment and entrepreneurship to
benefit people and planeto 23 countries + EUo Chair: Sir Ronald Coheno Brings together leaders in finance, business and
philanthropy
France NAB experience Cyrille Langendorff
Managing director of the Private Equity
and International Affairs Department
Crédit Coopératif (CC)
• France NAB & iiLab
• Social Impact Investing in France
• European Perspectives
Agenda
• France NAB & iiLab
• Social Impact Investing in France
• European Perspectives
Agenda
France NAB & Impact Invest Lab
2013
• G8 social impact investing taskforce
• 3 representatives of France in the Taskforce including the chair Hugues Sibille
2014
• Report of the NAB with22 recommendations, submitted to the Secretary of State for social and solidarityeconomy
• 30 participants
2016
• Creation of Impact Invest Lab (iiLab) to work on the recommendations, withfocus on SIBs
• Government launchescall for SIB proposals
2019
• 7 SIBs signed
• Government launches a working group to accelerate the development of SIBs
• Update of the 22 recommendationsunder way
France
NAB
• 35 members (no legal form) including Government (Social and Solidarity Economy, Europe
and Foreign Affairs, Treasury), financiers, intermediaries, market builders
• 2 meetings/year covering French news, international & GSG news, debates
iiLab
• Association (non-profit) gathering 16 members
• 3 operational staff in charge of the NAB secretariat
• Government sponsors the Lab for SIB-related activities, NAB recommendations and
international development
• Activities: research & publications, training, SIB feasibility studies, international representation
Impact Invest Lab, a project born in 2016, out of the recommendations of the French
National Advisory Board on social impact investing
Impact Invest Lab
Founding
Members
Missions
• Training and raising awareness about social impact investing and social impact bonds in particular
• Conducting research and developing resources (academic, theoretical and operational) in order to
broadly share expertise
• Conducting feasibility studies for social impact bonds / pay-by-result schemes, to assist either project
operators or government entities
• Partly fund structuring fees for social impact bonds
For more information : https://iilab.fr
Funding
Partners
International
NetworkFor more information : http://gsgii.org/
• France NAB & iiLab
• Social Impact Investing in France
• European Perspectives
Agenda
SII differs from Socially Responsible Investment (SRI), in which social benefit is marginal or non-
intentional, and is not measured.
It also differs from philanthropy or grant-making, in which there is no preservation of capital.
The French National Advisory Board provided a definition for Social Impact Investing
An investment that explicitely combines social and financial returns on investment.
As such social impact investing (SII) requires setting priority and specific social objectives,
the impact of which shall be measurable through a regular evaluation process.
These investments can be made into organisations of any legal form and that have a
sustainable business model.
These investments can target financial returns ranging from no return to market return.
These investments shall intentionally target organisations that generate social benefits
alongside financial benefits, that set measurable social objectives and regularly measure their
achievement. Investment targets can be non-profit organisation or « profit-with-purpose »
organisations, the social mission of which shall drive all strategic and resource allocation
decisions.
French Social Impact Investing
A rigorous process was put in place last year to collect financial data
Source : State of the French Social Impact Investment Market, 2018 edition, 2017 data - A. Artis, iiLab - https://iilab.fr/publications/
2 key professional
networks
French Social Impact Investing
EUR 3,2 billion AUMat the end of 2017
EUR 408 million investedover the year 2017
Main sectors
Inclusive
jobs« social »
housing
Health and
social careEnvironment
Key figures for French SII market
Tailored financing tools
« titres
participatifs »
« titres
associatifs »
Social impact bondsPatient
capital
The general public plays a significant role in social impact investing in France
Source : Zoom sur la finance solidaire 2019, Finansol - https://www.finansol.org/nos-publications/
Key figures for solidarity-based finance
Best practices: Solidarity-based finance
Best practices: Solidarity-based finance – ‘90/10 funds’
Source : Study on 90/10 funds, Finansol - https://www.finansol.org/_dwl/Study-On-2090-10-20Funds-20Finansol.pdf
Savings products
available at many
retail banks
Since 2008, all companies (> 250 employees)
are compelled to offer at least one
solidarity-based fund as part as their
savings plans for employees
The first solidarity-based fund (or ‘90/10’ fund) was created in 1994 (insertion emplois dynamique,
managed by Mirova) and the solidarity-based company savings law was passed in 2001
Best practices: Solidarity-based finance – ‘90/10 funds’
Source : Study on 90/10 funds, Finansol - https://www.finansol.org/_dwl/Study-On-2090-10-20Funds-20Finansol.pdf
Market return on
investment…
… allowing for below-market,
to 0% return on investment
=> No profitability requirement
put on social businesses
Very-close-to-market return on investment
Solidarity along the whole financing chain, from the saver to the social business
The first solidarity-based fund (or ‘90/10’ fund) was created in 1994 (insertion emplois dynamique,
managed by Mirova) and the solidarity-based company savings law was passed in 2001
Commitment of Government, public banks, independent facilitator as well as raising awareness amongst social businesses and
impact investors are key to start developing the SIB eco-system
2014
• NAB recommendsto experiment SIBsin France
2016
• Call for proposalsby Government
• 60 proposalsreceived, 13 certified
• Launch of iiLab
• iiLab publishes a SIB ethical charter
2017-19
• Long structuringprocesses
• 7 SIBs launched
• 2 other certifiedproject understructuring
• Other SIBs underdevelopment
mid-2019
• Working group in charge of streamlining, in order to acceleratethe emergence of SIBs in France
• Toolkit launched in September
Tomorrow
• iiLab guidebookon SIB feasibilitystudy
• Outcomes-payment fund? Centre of expertise?
The story of SIBs in France
And DIBs :
• Jan-May 2019: AFD and the French Government commissioned a study that confirmed the feasibility
of financing menstrual hygiene management projects in Sub-Saharan Africa thanks to DIBs
• Aug 2019: such project is promoted at G7 level (Development Ministers’ statement, Sahel action plan)
Best practice: Social Impact Bonds (« Contrats à Impact Social »)
• 1 non-profit « holding »: France Active
• 3 independent financial vehicles: capital
investments, loans & guarantees, all tailored
to social business specific needs
• 42 local associations, all over France
• Hybrid business model, resorting to public
(e.g. EU, EIF, CDC) and private (e.g.
solidarity-based finance) funding
A unique organisation dedicated to impact businesses, covering a great range of financing needs, with a significant footprint all over
the country
Best practices: France Active
• France Invest is the professional network dedicated to Private
Equity investors in France
• They launched an Impact Sub-group in 2012
• As of today, it gathers 33 impact investors, who manage €1,7bn
There is a growing interest for impact investing in the finance community, even if there is still a long way to go to reach scale
All members adhere to the France Invest Impact Charter, relying on 3 pillars:
o Combining impact and financial performance
o Active commitment towards financed entrepreneurs to maximize impact
o Measuring impact, including aligning carried on impact performance
Best practices: Impact private equity
• A couple of French Big Corporates have set up impact
investing funds
• These funds target social businesses which operate in
sectors close to the corporate’s core business
The corporate can provide technical assistance/expertise
in addition to financing (+ skills-based sponsorship)
• These impact funds sometimes mix an endowment by the
corporate with solidarity-based company savings plans
(90/10 funds)
There might be more to come on that matter with the B4IG initiative that was launched during the latest G7 summit
Best practice: Impact investing by Corporates
• France NAB & iiLab
• Social Impact Investing in France
• European Perspectives
Agenda
Several measures could help accelerate the development of social impact investing across Europe
• Promissory notes are often used by 90/10 funds to finance social businesses. However,
they are currently not eligible into funds regulated by the UCITS5 directive. Allowing
promissory notes for social businesses into UCITS5 funds would be beneficial to the
development of 90/10 funds across Europe.
• The EuSEF label could also benefit from several improvements such as: allowing
promissory notes for social businesses, opening to non-qualified investors, allowing funds
bigger than €500M, allowing investments in businesses located in developing countries…
• Introducing a social supporting factor, related to a social taxonomy, in the European
Capital Requirement Regulation would incentivise banks in doing more social impact
investing.
UCITS : Undertakings for Collective Investment in Transferable Securities
EuSEF: European Social Entrepreneurship Fund
European Perspectives
Cyrille Langendorff Chair – France NAB & Impact Invest Lab [email protected] [email protected] 34 bis, rue Vignon – 75009 Paris
Thank you for your attention
Spain NAB experience Jose Luis Ruiz de Munain
Founder CEO
Foro Impacto
Unifying for impact: who are the facilitators of the social impact investment ecosystem?
EVPA - EU Webinar24 September 2019
The way to GSG
Some data of the Spanish market
DEMAND
SUPPLY
INTERMEDIATION
SRI market€185bn (AUM
with ESG criteria)
Ethical banking€1.3bn (yearly
loans)
Social economy10% of Spanish
GDP
Foundations€5.2bn (annual
spending)
ImpactInvestment€90 million
AUM
Division between traditional social economy and emerging trend of social entrepreneurship
8-12 leading social incubators and accelerators in creating pipeline of investable social enterprises
Emerging public sector interest with new funds and tools In 2019 Eur 80mm public funding announced to be investment in II funds. Very early stage for institutional investors, who consider the market too risky and
lacking investment opportunities
Growing number of impact investment funds Emerging initiatives to implement 4 Social Impact Bonds in different Spanish
regions. No specific regulation for impact investors / Slow take-up of EuSEF regulation
Basque Government the pioneers Foro Impacto has convened more than 70 organizations interested in contributing
to build the impact investing market
Absence of Spain in the GSG
Canada
USA
Mexico
Brazil
Uruguay
Argentina
Chile
EU
UK
Finland
Germany
France
Italy
Portugal
Israel
India
Japan
New Zealand
South Corea
Southafrica
Bangladesh
¿Where was Spain?We have talent and strong track
record to join the GSG
¡We had to ACT!
Building the II Taskforce and its Secretariat
In this context, three leading entities in the ImpactEntrepreneurship and Investment space decided to ACTand create Foro Impacto Association, with threeobjectives:
• Mobilize and coordinate the key players in the ImpactInvestment Ecosystem through the organization of largeevents in different cities, focussing each on the differentpillars – impact investment offer, supply, intermediationand public policies
• Build consensus around Impact Investment and itsdevelopment in Spain through the organization ofWorkshops gathering more then 70 leadingorganizations (the “Taskforce”)
• Lead the process for Spain to join the GSG
Announcement of GSG
candidature to the
GSG
8th May, 2018FINAL REPORT
SPAIN JOINS
GSG
10 June, 2019
We started a process…
SUPPLY OF CAPITAL
DEMAND OF CAPITAL
INTERMEDIATION OF CAPITAL
PUBLIC POLICY
July / Aug 2018
MADRID
Intermeditate
report
Oct / Nov 2018
BILBAO
Intermediate report
Nov / Jan 2019
BARCELONA
Jan / March 2019
OCDE
Report
Intermediate
report
MADRID
Governmentexplicitsupport
70 organizationsparticipated in
the process
1000 peopleattending the
6 events
5 reports
Intermationalbenchmark
according toGSG
… participative, bottom-up …
…and impactful !
PUBLIC AFFAIRS AND COMMUNICATION
FINAL REPORTSPAIN JOINS GSG
10 June, 2019
IMPLEMENTATION ACTION PLAN 2020-2021
Jan - Dec 2020
ELABORATION ACTION PLAN AND GOVERNANCE 2022-2024
Jan - June 2021
New SPAIN NABJune 2021
RECOMMENDATIONS IMPLEMENTATION
ELABORATION ACTION PLAN 2020-2021
Sept – Dec 2019
Where we are now
Recommendations
STRENGTHEN SOCIAL ENTERPRISES THROUGH INCUBATORSAND ACCELERATORSLeaders: Public Sector, Financial Sector, Third Sector
1.1 Creation of an alliance of social incubators and accelerators to share best practices, standardizeprocesses and cover the different needs of social enterprises.
1.2 Creation of a support program through subsidies (or adaptation of existing ones), with public and / or private capital, to cover the costs borne by social incubators and accelerators to support and offer technical assistance to entrepreneurs.
1.3 Creation of a financing vehicle, with public and / or private capital with no expectations offinancial return, for social enterprises in their initial phases (idea / pilot).
1.4 Creation of a financing vehicle, with public and / or private capital, for social enterprises in seedand startup phase.
1.5 Creation of a financing vehicle, with public and / or private capital, for innovation and transformation projects at consolidated social enterprises.
ATTRACT PUBLIC AND PRIVATE FUNDS TO CATALYZE IMPACTINVESTINGLeaders: Public Sector, Financial Sector
2.1 Use of domestic and supranational public resources to catalyze new impact funds and reinforce existing ones.
2.2 Capture Structural Funds from the European Union (period 2021-2027) to catalyze new impact funds and strengthen the social impact of existing ones.
2.3 Create a specific vehicle to invest in different risk-return-impact strategies such as technical assistance, and blending.
2.4 Create and distribute dedicated impact funds by private capital asset managers and financial institutions.
2.5 Incorporate social and environmental impact variables in the financing offered by financial entities and fundmanagers.
2.6 Participate in the drafting of the Sustainable Finance Plan of the European Union to reinforce the importance ofimpact investing to institutional investors.
2.7 Promote an EU harmonized legal framework (regulatory and fiscal) for venture capital entities qualifying as EuSEF. In particular, improve the tax treatment of financing instruments under EuSEFs.
2.8 Promote public and private investment instruments that foster innovative structures to enhance social impact.
RELYING ON THE CAPITAL AND KNOWLEDGE OFFOUNDATIONS TO BOOST IMPACT INVESTINGLeaders: Third Sector, Public Sector
3.1 Clarify the regulatory framework (state and regional) to allow foundations to make mission-relatedinvestments, both through their endowment and reserves and their annual budget, based on revenues and income.
3.2 Raise awareness and train foundations on the possibilities to use impact investing for mission fulfillment.
3.3 Create a joint pilot financial vehicle between several foundations to allocate part of their endowment to impactinvestments.
3.4 Use endowments and reserves of foundations to create new vehicles of patient and hybrid capital that investthrough a combination of equity, debt and non-refundable contributions.
3.5 Promote venture philanthropy from foundations to support social organizations towards internal transformationprocesses and financial sustainability.
3.6 Promote venture philanthropy from foundations to support social enterprises in their initial stages ofdevelopment.
3.7 Use the budget of foundations to build part of the infrastructure required for the development of the impactinvestment market (studies, databases, spreading of initiatives, etc).
PROMOTE PAYMENT-BY-RESULTS CONTRACTS TO PROMOTESOCIAL INNOVATIONLeaders: Third Sector, Public Sector
4.1 Give greater visibility to PbRs that are being implemented in Spain and abroad to raise awareness, and train relevant actors.
4.2 Train public administrations on the opportunities offered by PbRs.
4.3 Experiment with public policies that promote payment-by-results contracts and evidence-basedpolicies, in order to introduce these mechanisms in the new Public Procurement Law.
4.4 Establish a line of financing from the central administration, along with philanthropic resources, whichcould be blended in to pay for feasibility studies and PbRs design.
4.5 Promote the creation of outcomes funds from public administrations to co-finance and expedite implementation of PbRs for innovative projects addressing wicked problems.
4.6 Create a pilot for a PbR scheme in which an alliance of foundations acts as the 'outcomes payer'.
4.7 Establish PbR-dedicated impact investment funds.
CREATE KNOWLEDGE AND MARKET INFRASTRUCTURE TOBUILD AN IMPACT ECONOMYLeaders: Intermediaries, Public Sector, Third Sector
5.1 Conduct studies to better understand the characteristics of the sector,
5.2 Emphasize communication regarding impact investing to increase visibility of domestic and international success stories.
5.3 Training and awareness-raising about the potential of impact investing for relevant actors in the social, public and private sectors.
5.4 Promote the measurement and management of social impact through commonly acceptedmethodologies and tools.
5.5 Create an evidence-based interventions database, including information on PbRs, to share knowledgeamong public administrations at all levels and with other interested actors.
5.6 Create a unit costs database to allow measuring and comparing of impact from specific social interventions.
5.7 Training and awareness-raising for the new generations to increase perception and understanding ofcompanies as key actors in solving social and environmental challenges.
Governance
Advisory body to disseminate and boost the impactinvestment economy in Spain according to the Action Plan
SUPPLY COMMISSION
DEMAND COMMISSION
INTERMEDIATION COMMISSION
Being part of the SPAIN NAB, they group the Taskforce (70organizations) into 3 pillars (supply, demand andintermation) and led the process of identifying challengesand recommendations
STRATEGICAL PARTNERS
Pro-bono services from top organizations to support theprocess in their fields of expertise (research, legal,communication and public affairs and public policy)
Technical Secreatariat of the SPAIN NAB. Led the processof Spain joining the GSG and now leading and facilitatingthe elaboration and implementation of the Action Plan
ROLE ORGANIZATION BODY
Sponsor
Sponsors
Sponsors and promoters
Technical leaders
Research Legal Comms andpublic affairs
Publicpolicy
European Priorities and Challenges Uli Grabenwarter
Deputy director of Equity Investments
European Investment Fund (EIF)
European Regional Advisory Board of the Global Steering Group for Impact Investment
GSGII Framework for Europe
GSGII in Europe
Other ?
OECD ?
EVPA ?
EIF
EIB
ECNAB Finland
NAB France
NAB Italy
NAB Portugal
NAB Germany
NAB Spain
European NABs European RAB
Quarterly NABs/ European RAB members Meeting
NAB Netherlands ?
WEF ?
Qu
arte
rly
Euro
pea
nR
AB
Mee
tin
gs
European Regional Advisory Board
• Seeks bringing together organizations and bodies that have a genuine interest in
developing the impact investing market in Europe across its full spectrum of
stakeholders
• Works on the basis of the complementarity of various market actors and engages its
members in initiatives depending on the value added they are able to contribute based
on their stakeholder community
• Engages its members in a flexible way in pan-European initiatives based on their value
added and the interest of the stakeholder community they represent
• Seeks to be the bi-directional link for feeding the debate on market development and
policy action from/to the global GSGII structure
EuropeanImpact
Investment
Objectives
Mutual Support at national and
pan-European Level
Fostering Public-Private-Partnerships
Leveraging bi-directional
interface to NABs for roll-out of
initiatives
Early Feed-in in policy design and
pan-European initiatives
(stakeholder involvement)
European Regional Advisory Board –
Governance Principles
• Operates with a lean non-incorporated structure based on a commonly agreed
Charta
• Meets on a quarterly basis
• Designates on a bi-yearly basis a spokesperson as the interface to the GSGII global
structure
• Does not preempt any positioning of its members with respect to concrete policy
action/initiatives or instruments but focuses on a transparent exchange between
members to raise awareness of stakeholder expectations in various market
segments
European Outcome Fund Initiative
• Outcome fund for social inclusion
• Objective to defragment approach to outcome fund initiatives in response to
refugees crisis and social inclusion challenges in Europe
• Brief for feasibility study has been passed by the Board of Trustees
• Feasibility study for Outcome Fund will look at:
– Scope (refugees, unemployment at large, social inclusion at large?)
– Instrument (is outcome fund the right response)
– Level of intervention (central or decentralized instrument)
– Governance and implementation efficiency for such instrument
Q&A: Unifying For Impact: who are the facilitators of the social impact investment ecosystem?
Jose Luis Ruiz de Munain
Founder CEO
Foro Impacto
Cyrille Langendorff
Managing director of the Private Equity
and International Affairs Department
Crédit Coopératif (CC)
Uli Grabenwarter
Deputy director of Equity Investments
European Investment Fund (EIF)
Thank you!
EVPA SPECTRUM
INVESTING
WITH IMPACT
INVESTING
FOR IMPACT
SPOs with a
business model that
will never be
financially / self-
sustainable
SPOs with a
potentially
financially / self-
sustainable
business model
SPOs with a
proven financially
sustainable
business model
For-profit
businesses
with intentional
social impact
Building social infrastructure
For-profit
businesses
ESG compliant(often listed
companies)
GRANT-MAKING
SOCIAL INVESTMENT
TRADITIONAL
GRANT-MAKING IMPACT INVESTING
https://www.pioneerspost.com/collections/the-impact-papers
The Hague, 6-7 November 2019: Join us!
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conference.evpa.eu.com
ANNUAL CONFERENCE
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Survey
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