Two Financial Titans Open Their Vaults to Impact Investing
Monday, June 30, 2014
Started a few years ago by a small band of pioneers, impact investing has gained traction and is now drawing the attention of large international banks. Large financial institutions such as BNP Paribas and Citigroup, based in Europe and the United States, respectively, are developing various projects in the field of social and sustainable finance. Because of their size and prestige, they offer credibility and recognition to impact investing, and investors tend to trust them because of their name and reputation. But it is not yet certain if their presence will add any value to the sector.
This year, a J.P. Morgan and Global Impact Investing Network survey indicatedthat investors intend to commit 19 percent more capital in impact investing activities than they did in 2013. Because of this, BNP Paribas and Citigroup are following the trend and launching impact investing projects and products for their clients—and it’s why representatives of these institutions shared their collective experiences at the TBLI CONFERENCE USA 2014 in New York this past May.
BNP Paribas, a Paris-based bank, is mainly financing microfinance institutions and social businesses, says Emmanuel de Lutzel, vice president of social business at the institution. Currently, the bank invests 360 million euros in social businesses in France and surrounding countries like Belgium, where the institution is widely present. BNP Paribas supports enterprises offering jobsthat consist of simple tasks like gardening, cleaning or recycling to the long-term unemployed. It also supports institutions that provide a job and adapted working conditions for the handicapped. Furthermore, the bank is involved in social housing by financing the construction and maintenance of various buildings.