Can impact finance save the world?

Finance is first and foremost a means of creating wealth: an essential cog in the economy, it transforms the savings of households, businesses and governments into resources allowing them to invest to develop or overcome specific difficulties. It makes projects possible that would not otherwise be possible.

Responsible finance is a set of regulations and practices aimed at taking into account the extra-financial impacts of products in investment and management decisions, to promote a sustainable economy. Applied to investment decisions in terms of portfolio management or savings, we then speak of socially responsible investment (SRI).

The ISR label, including a new, more demanding version and more rigorous has just been published by Bercy, therefore identifies financial products making it possible to fight against the consequences of climate change and against systemic social inequalities. The Finansol or Greenfin labels also make it possible to identify, for investors and savers, solidarity or impact finance products.

Mobilization of the financial community is vital to achieve the 17 sustainable development goals set by the UN in 2015 for 2030 and carbon neutrality of the economy in 2050: the necessary investments are estimated at 7,000 billion dollars per year, of which only 40% can be covered by public money. It is therefore private investment that will make it possible to achieve the objectives of the just and sustainable transition.

Impact finance is based on a combination that is an oxymoron: jointly seek satisfactory financial performance and the achievement of social and environmental impact objectives. In other words, this finance, emerging since it represents 0.45% of assets under management in the world, seeks to serve the general interest. The question is whether the individual and private character of “classic” finance, which is based on financial gain, can be overcome: we want to believe that yes, but it will not necessarily be unconditional.