Guest speakers stressed the need for the creation of an enabling environment to facilitate investments in emerging countries and address the investment gap. They also emphasized the importance of adopting an “all hands on deck approach” from both the public and private sector, and the issue of further optimizing existing innovative solutions currently left aside.

Cinthya Pastor, Director of Economics at the Global Infrastructure Hub, outlined the private investment stagnation being witnessed in infrastructure since 2014. She underlined a durable trend suggesting that private investors prefer to direct their funds to high-income countries where renewable energy projects get mostly funded. In medium and low-income countries, transport and non-renewable energy infrastructure are the main investment targets, thus exacerbating the existing sustainable investment gap.

This highlights the urgency to find solutions to ease the capital flow coming from the private sector towards developing countries, and this can only be done through a better coordinated approach in Imad Fakhoury’s view, Director of the Infrastructure Finance, PPPs & Guarantees Group at the World Bank:

“It takes collective work, led by the client governments of these countries, in partnership with the private sectors, international organizations, and civil society, given the size of the challenge and the time frame we are facing to deliver on the 2030 Agenda.”

He further exemplified how critical the situation is in emerging and developing countries. He indicated that this group of countries would have to spend the equivalent of 4,5% of their GDP annually on infrastructure to close the current investment gap, and an additional 2,7% on operations and maintenance, further demonstrating the need for more robust commitments from the private sector in assisting public authorities in transitioning our economies.

Fakhoury also stressed the fact that private investments in emerging countries only amount from 10% to 15% of total investments in infrastructure at the moment. However, he pointed out that the recurrent excuse of the scarcity of capital is not founded as there is approximately USD 120 Trillion worth in assets being managed by the private sector that could easily be redirected to help emerging countries close the infrastructure investment gap.

In the same vain, David Uzsoki, Sustainable Finance Lead and Senior Advisor at the International Institute for Sustainable Development, pointed out that the pretext of the lack of existing innovative solutions is simply deceitful. In fact, innovative solutions do exist but are underused or misunderstood by policy makers. During the panel, he mostly focused on nature-based infrastructure (‘NBI’) projects, such as sand dunes that can be leveraged to prevent cities from being flooded, and argued that by swapping only 11% of our “grey” infrastructure into NBIs, it would be possible to globally save the equivalent of USD 248 Billion. He added that NBIs are usually 50% cheaper than common infrastructure projects, making more capital available to be directed to emerging countries.

However, he also noted that new actions need to be undertaken to establish innovative financial instruments to monetize the potential of NBIs, and make these solutions more attractive worldwide. What is certain in Uzsoki’s opinion is that “ignoring the role nature-based infrastructure can play in closing the infrastructure investment deficit would be a mistake.” He stressed that true political leadership and targeted regulations have to become the norm to unleash the full potential of NBIs.

Jean-Francis Dusch, CEO and Global Head of infrastructure at Edmond de Rothschild, and Jérôme Leyvigne, Managing Director at BlackRock Infrastructure, also addressed the tremendous opportunities that infrastructure investment can generate for the finance industry all across the globe.

Watch the full discussion

The post Infrastructure Investment: Empowering Emerging Countries first appeared on Building Bridges.

Supply chains worldwide have been put to a test, as most States have and are still experiencing shortages in many sectors. Recently, the United States had to launch a military airlift operation to cope with the supply chain disruptions of baby formula, a first of its kind. The Ukrainian war also clearly showed how untenable our dependence on fossil fuels is, as exemplified by the staggering increase of oil prices that followed the Russian invasion. It comes with no surprise that the issue of transitioning our global systems to sustainability was at the heart of the 2022 World Economic Forum (‘WEF’) in Davos.

Sustainable Finance as an Ally

Guest speakers have demonstrated how essential it is for States to move away from fossil fuels and to invest in renewable energies and other green initiatives. Still today, 80% of the energy globally produced is coming from fossil fuels despite the repeated calls to tackle this crisis humanity faces. But the latter will never be effectively tackled if we don’t promote a holistic and “all-hands-on-deck” approach where all sectors of activities are truly transitioning, and where both the private and public sectors can play their respective role.

Finance is key in this regard, as it can help set up investment strategies based on maximizing the impact they can have in relation to the achievement of the 2030 Sustainable Development Goals.

Take the food industry for instance. As discussed during the WEF, 30% of the worldwide food production is either lost or wasted, partly because of inaccurate demand management, thus creating huge discrepancies between supply and demand. But local farmers, however, can’t contribute effectively to the transition as they don’t have the means to invest in new technologies to render their practices more sustainable.

Finance may provide such tools to channel the opportunities presented by the necessity to transition by making more attractive R&D investments in order to provide innovative solutions for the food sector. As farming as a livelihood operates on very thin margins, should the financial sector not take on a leading role, the transition of this sector is doomed. 

But governments should demonstrate leadership as per the $ 500 billion annual agriculture subsidies they grant. The private actors in the food supply chain shall not wait on the sidelines either. Rather than being paid for the quality of their products and the sustainable practices they rely on, farmers are incentivized to supply an ever-growing quantity of products without any regard to the dire consequences their practices might have on the environment. Sustainable finance schemes should be revised accordingly to promote the exact opposite and foster partnerships that help build resilient local food systems, thus securing jobs and providing affordable nutrition.

Getting Rid of the “Degrowth” Taboos

Degrowth and Finance should not be met with fatalism. Transitioning to sustainability does not mean being forced to accept less profitable ventures. As argued during the WEF, transitioning to low-carbon, low-waste, low-inequality societies is not only a matter to correct the wrongs of the past that made our system function only for the very few, but it also means engaging in profitable fields that have yet to be developed to their full potential.  

To win over the more skeptics, one should remember that the equity values of sustainable companies were up by 46 percent on average in 2021, and we were then still witnessing the impacts of the pandemic. Further, in Switzerland alone, sustainable financial investments went from CHF 141.7 Billion in 2015 to CHF 1 163 Billion in 2019. A worldwide momentum is thus clearly in the making. And it’s only the beginning.

Let’s all dare a bit more, and leverage the true potential of sustainable finance. Only then could we seriously envisage respecting the ambitious transition imperatives we established for the sake of humanity. 

The post Back from Davos: Nature Positive Finance is Not an Option first appeared on Building Bridges.

Sustainable finance, if effectively leveraged, can become a powerful tool in ensuring the very survival of our planet. However, the finance world has yet to align its objectives according to the 2030 Agenda, the Paris Agreement, and the post-2020 Global Biodiversity Framework. “Without this alignment, there is no chance the Sustainable Development Goals can be achieved,” says Mark Halle, Senior Advisor at UN-convened Financial Centers for Sustainability. Mark Halle also insists on the dramatic detachment of the financial system from the needs of the real economy. From his perspective, the finance world needs to urgently refocus its activities to ensure that they serve the public good, rather than the goals of the industry.

Nevertheless, institutional investors have already started the transition, as emphasizes Yves Mirabaud, Chairman of the Board of Directors of the Mirabaud Group:  “No investor would consider an investment proposal that is not ESG compliant today, and this is a major change!” Furthermore, the UNEP recognizes that a giant leap has been made to tackle the triple planetary crisis. For instance, central banks are standing up to these pressing issues by adapting their practices. They comprehend that their capacity to deliver on their price and financial stability objectives will be severely endangered, if not impossible, should climate change and the biodiversity loss be left unanswered.

Investing in energy transition and innovative technologies rendering our economies more sustainable is only one application of the features of sustainable finance. New practices in terms of sovereign debt restructuring are also gaining momentum. States may, for example, refinance their national debts by investing in a conservation fund aimed at protecting biodiversity. Issuing green bonds, which contribute in investing in pioneering start-ups willing to make the fight against climate their own, is just another example of how we can unleash the full potential of sustainable finance.

“Soon, sustainable finance will not be best practice, but common practice.”

            -Jörg Gasser, CEO, Swiss Bankers Association (SBA)

And for many observers, Geneva offers a unique gathering opportunity to help humanity overcome these pressing challenges. Switzerland’s Ambassador to the UN in Geneva, Jürg Lauber, believes that Geneva’s multidimensional ecosystem is unique in its capacity to shape partnerships with a variety of actors that all share the same goal of attaining the UN 2030 Agenda. Members of the finance world all share a common duty in making finance a formidable ally in the global fight against climate change, and the nature and pollution crisis.

The post Tackling the Triple Planetary Crisis: The Role of the Finance Sector first appeared on Building Bridges.

Ghana is eager to tap into the growing demand for investment strategies that generate social and environmental benefits alongside financial returns. Sustainable investing is one of the hottest trends in finance, but very little of the money is making it to the countries that need it the most. While unlocking capital for emerging and developing economies is crucial to achieving the Sustainable Development Goals, many barriers are hampering these financial flows.

Prominent on the list is an exaggerated perception of risk, said Xavier Pierluca, managing partner at Enabling Qapital, a Swiss investment firm focused on emerging markets. 

“Generally speaking, there’s a perception of risk that is much higher than the risk itself,’’ he said. “It is actually in many cases less risky to invest in an SME (small to mid-sized enterprise) in Ghana with a local shareholder than investing in a bond or a listed equity stock on your stock market here (in Switzerland).” 

Pierluca was part of a panel discussion, organized by the SDG Lab during the 2021 edition of Building Bridges Week in Geneva, on how to drive more capital to emerging markets. Much of the conversation revolved around Ghana as it is the focus of a pilot of the Pipeline Builder, an initiative to connect investors with opportunities in emerging markets and developing countries. 

Building SDG pipelines

Launched in late 2019, the Pipeline Builder is a partnership between the SDG Lab and the Ground Up Project, a Swiss-based impact finance advisor. The aim of Pipeline Builder is twofold: One, to provide investors with a roadmap for turning country-level SDG priorities into investable opportunities that align countries’ specific development goals; two, to provide investors with real SDG-aligned investment opportunities more efficiently. Using a network of emerging market-based intermediaries, the Pipeline Builder can access opportunities on a global scale, which allows investors to build diversified portfolios of direct and fund investments in emerging markets at a lower cost and with potentially less risk. 

Panel participants said investors often stop listening and their eyes glaze over when the talk turns to low-income countries. One reason for that attitude is performance pressure, which can make asset managers reluctant to tie up money in regions where investments tend to be illiquid and unlikely to generate short-term returns. But sustainable finance also lacks leadership, Pierluca said, with investors tending to follow the pack rather than taking risks in uncharted territory. 

“We need to play on that herd mentality,” said Agi Veres, the UN Development Programme (UNDP)’s deputy director for Europe and Central Asia. “We need to get a first set of investors that will bridge that barrier.”

Panelists stressed the need to educate investors about market conditions in developing countries. UNDP is working to transform national SDG priorities into investor roadmaps. In April 2021, the organization introduced a platform that gives investors access to the market analysis underpinning the roadmaps. Ground Up leveraged the tool to identify US $55 million worth of small business investments in Ghana in the six months to September 2021.

Full article

Building Bridges 2021 recap

The post Building Bridges 2021: Pipeline Builder panel spotlights Ghana’s potential first appeared on Building Bridges.

Using public funds catalytically is an effective way to close the financing gap to achieve the SDGs. However, questions on additionality, minimum subsidy, or impact washing arise quickly for practitioners. The OECD DAC Blended Finance Principles provide guidance in this regard, for instance that blending is time-bound and avoids market distorsions. As a public sector actor that has engaged in blending for more than twenty years, SECO identified the following five aspects that can help to operationalize the Principles and use blended finance for impact:

Provide early stage technical assistance and funding to support innovative ideas

The design and launch of impact investment vehicles is complex, time-consuming and costly in relation to investment product sizes. The Private Infrastructure Development Group PIDG[1], of which Switzerland is a founding donor, nowadays has an array of instruments including guarantees, and early stage technical assistance to bring sustainable infrastructure projects in difficult contexts off the ground. Similarly, the recently announced SDG Impact Finance Initiative (SIFI)[2] will provide early-stage funding to incentivize innovative ideas and reward new forms of collaboration, ultimately contributing to the availability of more impact investment vehicles. It will be supported by Convergence, a recognized leader with a global network for blended finance that has been leading on early-stage funding of this kind over the past five years.

Plan a series of competitive calls to increase value-for-money

In 2017, SECO launched for the first time a competitive call for proposals for grants to technical assistance facilities linked to impact investment funds. It therefore shifted from selective partnerships with fund managers to an open and competitive call for proposals. By defining the contribution to selected SDGs, it stimulated innovation and introduced SECO to new approaches and themes. SECO was in a better position to compare the various proposals against defined criteria and against the Blended Finance Principles. SIFI will replicate this competitive approach and allow for best value-for-money.

Pool catalytic funds to get better blended finance deals and reach scale  

To achieve scale, actors need to join forces and work together. Not only is more collaboration needed between grant funding actors and the private sector but also within the two types of actors. By bringing together public and philanthropic actors and pooling their funds, the Initiative will mobilize more private capital by supporting blended finance vehicles for the SDGs. However, collaboration refers not only to funding but also to bringing together ideas, experiences and expertise. In this sense, SIFI will leverage the rich ecosystem of private, philanthropic, public and development actors.

Demand quality impact reporting to show you are making a difference

As a public donor committed to reaching the SDGs set out in the Agenda 2030, SECO measures, monitors and reports on intended and unintended impacts of its interventions. This applies also to blended finance initiatives. A recent example is the detailed impact report published for the Loans for Growth Fund, a blended finance vehicle that mobilized private sector funds with a 1:10 ratio thanks to a first loss co-financed 50-50 by SECO and a large Swiss bank. Since the fund’s launch in 2016, Symbiotics, the Fund manager, has published a comprehensive effectiveness report each year enriched with a variety of metrics including business outcomes, employment inclusiveness, and workplace safety. By providing detailed information on impact at both the financial institution and SME level, the report informs about tangible development results attributed to the additional private finance mobilized and demonstrated that investments in entrepreneurship clearly contributes to reaching the SDGs. Additionally, SECO was an outcome funder in the first Social Impact Bond in a developing country. Together with the Colombian government, it paid for job placement and retention of vulnerable people.

Support market reports to provide transparency and benchmarking as a public good

Catalytic funders need more transparency and benchmarking, which will contribute to a healthy development of the market. In order to make informed decision and use public funds effectively, key information, including financial information (e.g. average/median management fees; expected IRR for specific geographies/sector); as well as the amount of concessional capital and subsidies for blended finance deals (including first losses, guarantees and technical assistance) are needed for making decisions. These information are still difficult to find and hence to compare best practices. This underscores the importance of analytic studies, such as the PAIF report[3], which enhances transparency and benchmarking for about two-thirds of this industry worldwide. As a sponsor of the first and second editions, we expect that these kind of reports will become an important instrument for public donors to identify and prioritize their support where the impact leverage is at its highest, without substituting private actors.

Conclusions and further information

SIFI encompasses SECO’s past experience in the area of impact and blended finance such as in the Loans for Growth Fund, SECO’s first competitive call for proposals, its investment in impact funds and the Private Infrastructure Development Group PIDG, and its role as outcome funder. It thereby aims to provide different blending instruments under one roof.

Article for Building Bridges

Authors: State Secretariat for Economic Affairs SECO/ Liliana de Sá Kirchknopf, Christine Lewis, Massimo Bloch, Christian Brändli (Christian.braendli@seco.admin.ch)

[1] https://www.pidg.org/

[2] https://www.seco.admin.ch/seco/en/home/seco/nsb-news/medienmitteilungen-2021.msg-id-86208.html

[3] https://tameo.solutions/research/

The post Blending private-public funds for impact – A public sector perspective on the state of the art first appeared on Building Bridges.

Yet the SDGs recognize that sustainable development requires the balanced integration of all three dimensions – economic, social, and environmental.

A real technical framework needs to be put in place for sustainable finance to truly become a main element of our economic system.

In honour of Building Bridges 2021 taking place this week, Nadia Isler, Director of the SDG Lab and Sandrine Salerno, Executive Director of Sustainable Finance Geneva have written articles on the issue:

Read the article in Geneva Solutions

Lire l’article de l’AGEFI

The post It’s time to widen the lens of sustainable finance first appeared on Building Bridges.

But this agricultural model is now losing steam. Demand is increasing due to continued population growth and higher overall living standards in fast- developing countries such as China, while supply cannot keep up and being limited, notably, by stagnating agricultural yields, shrinking arable lands and growing climate concerns. Furthermore, consumers are increasingly sensitive to environmental issues and are rejecting the current, highly industrialised model’s environmentally damaging practices.. This paves the way for a fourth industrial revolution based on several technological solutions.

The first is agricultural robotics, or AgRobotics. Automation of farming machinery can deliver up to five times the yield of previous one, while drones can monitor crops more effectively than a farmer can, and thus replace extensive use of pesticides. Growth prospects for this segment are about +23% per year by 2025.

As for vertical farming, it is an innovative alternative to traditional production: it makes it possible to grow fresh fruit and vegetables above ground, including in urban areas, with little or no chemical use, all year round and close to the consumer. Meat substitutes make it possible to reduce livestock farming’s deeply negative impact on the environment. Representing less than 1% of total meat consumption, these substitutes could reach a 10% market share by 2030.

Finally, waste reduction and improved logistics are another part of this 4th revolution. The latest automated and artificial intelligence-assisted sorting technologies as well as new packaging techniques will drastically reduce crop waste, which currently amounts to about 30% of production.

Agriculture 4.0 will see a structural change in the way we farm in the coming years, with an outcome we believe will be as significant as previous previous leaps forward.

The post The 4th agricultural revolution in modern history has begun first appeared on Building Bridges.

The last two decades saw billions of dollars directed towards financial inclusion which has led to an incredible rise in the percentage of banked adults in developing economies. The last accurate data point available was in 2017 but projecting out to 2020 it is safe to assume that 70-80% of adults in developing markets are now formally financially included. A phenomenal achievement. But rather than nearing a conclusion, I see it more as an opening act.

Beyond Basic Financial Inclusion

If the global venture capital FinTech investment trend is anything to go by, business and consumer financial needs have still not been satisfied. Despite a Covid induced dip in 2020, global FinTech investment is projected to reach almost $150B in 2021 (Source: Traxcn) with thousands of new companies being created each year. The whole premise of venture capital is that there is a large addressable market and acute pain worth solving. So what are the financial pains that these FinTechs are seeking to address?

Credit 2.0:

The International Finance Corporation estimates that 65 million MSMEs in developing markets have an unmet credit gap of over $5 trillion. To serve the credit needs of these businesses, a more specialised approach is required and embedded finance business models are leading the way. The concept of embedded finance is simple and replicable across multiple sectors and typically goes like this:

1. provide a service to a specific subset of users (eg. FMCG goods to convenience stores)
2. gather alternative primary data, sector insights and develop a more advanced credit underwriting process than traditional lenders can manage
3. improve the user experience by offering credit as part of the offer or at the point of sale
4. lend higher amounts at a lower risk often with an automatic loan repayment process
5. embed an asset recovery process in case of default (optional)

Embedded credit examples:

• AgroCenta, Ghana: Beginning life as an off-taker of key grains from small-holder farmers, AgroCenta subsequently offered inputs (i.e. grains, fertiliser) and then the input financing in partnership with a bank. The financing is fully embedded with store credit provided and interest/principal deducted directly from the capital flowing back to the farmers through the app.
• Dastgyr, Pakistan: The 2 million convenience store owners in Pakistan face several challenges including being regularly stocked out, losing hours travelling to the market 2-3 times a week to restock, not receiving significant bulk buy discounts, slim margins and a lack of credit. Dastgyr aims to solve all this with a B2B ecommerce platform offering next day delivery and embedded credit.
• Ilara Health, Kenya: Small health clinics in Kenya don’t typically have the capital required to purchase key diagnostics equipment (eg. for diabetes or cardiac diseases). Ilara Health sources and imports the most appropriate devices for the African context and provides financing options. The devices permit clinics to serve a broader set of health needs and increase revenue and they can be recovered in the case of default. 

The list could go on and on covering various other sectors such as farmers purchasing tractors in Mexico/Argentina (Siembro), importers in Colombia (FinKargo), or second hand clothing retailers in Kenya (Zumi).

Many of these companies had to make a decision regarding the embedded finance component – buy or build. Some (like FinKargo and Siembro) built themselves as FinTechs from day one. Others added in the lending competent later on and many turned to specialist embedded finance service providers to support them. Another portfolio company, Pezesha, is providing the embedded finance infrastructure for companies like Zumi, Twiga and MarketForce.

Consumer credit killer?

Consumer credit has been available by fully digital means (a stark contrast to the pen and paper methods microfinance institutions started with and still frequently use) for years in most developing markets. However beyond the embedded financial literacy or reduced rate incentives, interest rates remain high. 

One innovation currently spreading rapidly across the globe has the potential to make a difference. It allows employees to access a portion of the salary they have already earned but won’t receive until month end. It’s aptly named Earned Wage Access and is NOT to be confused with payday lending. The key difference is that providers of an Earned Wage Access service must be plugged into the employers systems, have accurate data on the employees salaries and are paid directly by the employer each month. Fees are typically flat and drawdowns limited to some percent (eg 50%) of earned wages.

Going by the number of businesses we see launching this service, it’s going to be rapidly adopted by employers as a key value proposition for workers. Of course the service will only work for those that are formally employed but this is already 67% of the working adult base. As an example, Seedstars portfolio company MyRobin is offering this service for blue collar workers in Indonesia typically employed by ecommerce companies including Shipper and Lazada.

Full financial wellness:

Beyond savings and credit, a whole host of financial services from remittances, to insurance and investing are required by businesses and individuals before one can claim to have complete financial wellness. 

Remittances, a $700B annual capital flow, has been costly (the global average cost of sending $200 was 6.8%, 2x the SDG target of 3%) and a poor user experience until recently. Companies like Wise (ex. TransferWise) have dramatically lowered costs and made the process 100% digital. Wise is now 8x cheaper than banks or any other money transfer company with an average fee of 0.67% for each transaction, compared to +5% or more that banks often charge. The next level of service we are starting to see is a full financial service dedicated to the diaspora making remittances. Companies such InstaKin (for Pakistanis globally) aim to go beyond the simple remittance process and rather permit specific services or bills to be paid, errands to be run or gifts to be sent. The services crucially allow the diaspora to determine exactly what the remittances are used for.

Investing in stock markets remains a luxury for high net worth individuals in many developing markets. In Nigeria for example, prior to the recent arrival of digital brokers such as portfolio company Chaka, a minimum balance of $10,000 was required versus the $10 people can now invest. Affordable, digital insurance offers for everything from health to crops, cars and motorbikes are now available in many markets. However health and crop insurance for the low income segment remains a major challenge (eg. 8% health insurance coverage in Sub-Saharan Africa in 2020) and it’s an area we’re still searching for the right investment opportunities.

The super app most likely to deliver (or at least be the portal to) full financial wellness is of course the digital bank.  Digital banks are being created either as generic services (think Revolut) or with a specific user in mind (eg. gig economy workers – Friz, women – Jefa, Islamic + blue collar – JinglePay, children – Mozper). The challenge for all pure play digital banks is that unit economics are poor, regulatory hurdles and costs high and significant capital is required to sustain them. Capital is however free flowing (see chart above) and these companies have been able to finance their launch and growth. 

Many of the digital lenders we’ve spoken to have a goal to transition into a fully fledged bank once they’ve cracked the hardest most profitable service – credit. This dynamic will create an even more competitive landscape for the digital banks, already battling against the incumbents. While failures, regulatory issues and mergers should be expected, this competitive landscape will ultimately drive innovation and the delivery of a full financial wellness package for users. 

The future of finance remains core to our investment thesis, is our largest portfolio exposure and continues to be the top source of deal flow. We salute the founders of the financial inclusion movement that started decades ago as it has set the scene for a much broader opportunity to deliver financial wellness in developing markets. 

The post What lies beyond financial inclusion? first appeared on Building Bridges.

How consumer choices impact the environment

All emissions are generated ultimately to accommodate consumer behavior and spending patterns. Consumers’ day-to-day activities – from taking a shower, to buying products, to using transport, to watching television – all carry what the average person tends to underappreciate as their personal emission footprint.

This underappreciation and/or lack of understanding may, in turn, explain the difficulties in changing consumer behavior in order to reduce emissions and achieve long-term climate change targets.

How trees offer a solution

Reforestation offers potential in fighting climate change as trees are natural “capturers” of carbon dioxide (CO2); the primary culprit behind GHG emissions. Currently, approximately 30% of annual CO2 emissions get stored or captured by the world’s forests (natural sequestration). Some 47% of emissions remain in the atmosphere, with this share expected to grow under more extreme global warming scenarios and without aggressive (re)forestation plansⁱⁱ.

Unfortunately, in just over 30 years, a global total of 420 million hectares of forest has been lost due to deforestation. Even the Amazon forest has become a net emitter of carbon. Announced reforestation plans by key countries, whilst positive, appear to address less than 15% of current annual CO2 emissionsⁱⁱⁱ.

Lifestyle activities and their associated Treeprint

‘Treeprint’ refers to the number of mature trees (and their carbon-storage potential) needed in order to offset emissions associated with a certain activity. Once consumers appreciate the Treeprint necessary to counterbalance their carbon footprint, they can reduce certain activities accordingly, or plant the calculated number of trees in order to create a net carbon footprint.

The carbon footprint of some lifestyle activities – divided into eating and drinking, travel and tourism, clothing and shopping, fitness and entertainment, and domestic activities – and their associated Treeprint may be surprising. For example, switching from a steak frites meal to a vegetarian Bolognese would result in a 94% drop in emissions. Car-related emissions are predicted to make up 56% of all domestic travel-related transport emissions by 2030^iv. And a white tea is 87% better for the environment than a latte.

“All emissions globally are ultimately generated in order to accommodate consumer behavior and spending patterns.

There are no easy solutions to halting climate change and achieving net zero. By taking the time to understand and reduce their most environmentally intense daily activities, consumers can better appreciate their personal role in contributing to these global goals.

Read the full report: https://credit-suisse.com/treeprintreport

Article was originally published on credit-suisse.com on 29.10.2021

i According to the Intergovernmental Panel on Climate Change (IPCC) Assessment Report.

ii According to IPCC calculations.

iii According to Credit Suisse calculations in the Treeprint report.

iv According to the World Tourism Organization (UNWTO).

The post When emissions turn personal: How many trees are needed to offset your carbon footprint? first appeared on Building Bridges.

BNP Paribas Solar Impulse Venture fund: A solution accelerator

The BNP Paribas Solar Impulse Venture Fund is managed by BNP Paribas Agility Capital and intends to invest  €150 M in high potential startups committed to the ecological transition. The Fund aims to accelerate their development and help them scale up.

Based throughout Europe and the United States, the startups receiving support are active in many sectors, such as clean energy, sustainable food and agriculture, and circular economy. Each start up selected by the fund is evaluated by the ‘Solar Impulse Efficient Solutions’ label.

BNP Paribas commits € 75 M to the fund, with the remainder being opened to professional investors sharing the same ambition as BNP Paribas and the Solar Impulse Foundation to support the Ecological Transition and work towards the achievements of 8 UN SDGs (Sustainable Development Goals).

A long-standing commitment to green tech financing

The creation of this fund is fully in line with a process initiated several years ago by the Group, which aims to support young and innovative cleantech companies. At the end of COP21 in 2015, BNP Paribas created a team dedicated to investing in energy transition startups and allocated € 100 M for this purpose. Investments were then made in startups working in areas such as energy efficiency, and waste management, and sustainable mobility.

Over the past five years, BNP Paribas has developed a strong culture and expertise on financing and support issues for these startups from multiple geographical areas and with specific needs. Some of the companies already supported by the Group include: Heliatek, a German company that developed a low weight, low carbon organic photovoltaic film; or Metron, a French start up that is deploying a software solution designed to improve the energy efficiency of industrial sites, which is a key enabler for global industrial corporates to meet their Net-Zero carbon emission targets.

Innovative and cost effective solutions for the environment

For Jean Laurent Bonnafé, Chief Executive Officer of BNP Paribas, “The creation of this fund marks a new chapter in the joint actions carried out by BNP Paribas and Solar Impulse since 2017 to preserve the environment.” Prior to the creation of the BNP Paribas Solar Impulse Venture Fund, the Group’s support went to helping Solar Impulse achieve the labeling of ‘1,000 cost effective solutions to protect the environment.’ An ambitious target, which was reached on April 13th.

Sustainable development experts from across the Group have directly engaged with the Foundation to help achieve this goal as expert advisers.  Several business lines have also played a key role in creating and deploying these 1,000 solutions, through entrepreneurial projects developed within the Group or supported by it. These include:

• Climate Seed, a market place originally developed within BNPParibas Securities Services, which structures the voluntary carbon credit market;
• BNPParibas 3 Step IT, a joint venture with BNP Paribas Leasing Solutions that delivers comprehensive and sustainable technology equipment lifecycle management solutions.
• THEAMQuant Europe Climate Carbon Offset Plan, a fund created in partnership with BNP Paribas Global Markets and managed by BNP Paribas Asset Management.

Once labelled ‘Solar Impulse Efficient,’ these initiatives are also subject to rigorous assessments by independent experts, which measure both feasibility and efficiency from both an economic and environmental perspective.

The post Cleantech: BNP Paribas and Solar Impulse have launched an investment fund dedicated to startups first appeared on Building Bridges.