Lunch & Learn
Environmental Impact Bonds

Lunch & Learn 48 🔹  Thursday, September 28, 2023

🇫🇷 French edition

Environmental Impact Bonds: How can they help finance the ecological transition

Humanity is facing a systemic ecological crisis that threatens the stability and resilience of our societies. Scientists are alerting us to the growing pressure exerted by human activities on the Earth system: erosion of biodiversity, climate change, soil artificialisation... So many physical frontiers have been or are about to be crossed, representing a formidable challenge for public and private players at all decision-making levels. One of the levers for meeting this challenge is financial. In France, for carbon neutrality alone, tens of billions of additional public and private investment per year will be needed between now and 2030 to achieve our national and European objectives. Among the range of possible financial tools, environmental impact bonds (EIBs) are only just beginning to make their mark. An ecological variant of social impact bonds, they share the same "pay-for-performance" rationale, with public authorities joining forces with private financiers (investors or philanthropists) who agree to take the risk of financing innovative projects, generally led by grassroots associations, with measurable impact objectives. Less well known than their "social" counterparts, environmental impact bonds differ from them in that their beneficiaries are not a cohort of individuals, but ecosystems and physical entities: forests, freshwater, coral reefs, waste... The impact sought is often diffuse and long-term, whether it involves preventing their degradation or restoring them. While it is possible to monetize some of the costs or negative externalities avoided, it is sometimes impossible or inappropriate to do so. So, what is the potential of these new financial tools for the ecological transition? What do the first initiatives of this kind look like? Who are the players? When are they useful? How can we avoid the pitfalls of the previous generation of impact bonds?


🔹  Benjamin Le Pendeven, Associate Professor at Audencia Business School, Finance for Innovation Chair holder

🔹  Marion de la Patellière, Founding Partner, sb factory

➡️ Guest-speakers' biographies

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