Strong growth in impact finance

+26.6% for the year: More and more French people prefer to save money by contributing to the common cause. During a recent Fair press conference, an association of 120 impact finance players, presented the twentieth edition of Fair-La Croix’s Financial Solidarity Barometer. The results of the last year testify to the strong growth of the phenomenon, which has also changed significantly in recent years. In 2021, solidarity financing reached 24.5 billion euros of assets, which is 5.1 billion euros more than in 2020. In total, this amounts to 699 million euros, spread over approximately 1,350 projects with social or environmental impact.

Social and environmental goals

The target goal is social (housing, fighting isolation, integration through activities, etc.) in more than half of the cases, environmental in 17% (organic sector, renewable energy, etc.), and 13% supported projects are related to territorial cohesion and the local economy. “Historically, solidarity funding has mostly addressed social issues such as poverty or housing, but more and more participants are integrating environmental logic.“explains John Salle, head of the Observatory for Social Impact Funding at Fair.

Solidarity savings come from different streams, each of which experienced strong growth in 2021 in different proportions. Employee savings alone amount to 14.1 billion euros, which is more than half of outstanding debt. In 2021, the growth was 21%”,in the succession of recent years“, notes John Salle. In second place is the collection channel for banking and insurance services with a volume of 9.5 billion euros (+38% in 2021). Finally, direct collection from individuals is almost one billion euros, up 15 % more.

These different streams are fueled by three different types of financial products that the barometer aggregates. First, those labeled Finansol. The label, created 25 years ago, is managed by Fair. This guarantees the contributor that “all or part of the collected savings finances an activity and/or a solidarity project with varying levels of solidarity depending on the nature of the investment. “. And this'” paid at least 25% interest on a regular basis (at least once a year) by a contributor in the form of a donation to beneficiary organizations“. The second type of product is the solidarity savings of employees who follow comparable principles, even if they are not labeled as Finansol. And finally, the third type,unit of account of solidarity”, life insurance contracts.

Regardless of the distribution channel,Solidarity products are becoming more and more accessible. They can take a variety of forms. Some are very belligerent, others are very safe‘, explains John Salle. Savings could, for example, be invested in Railcoop, a railroad company with cooperative status that offers rail transportation on small lines, a project that has both an environmental and regional planning impact but has not yet shown to be profitable. economic model. Or they can opt for secure solutions such as the very popular Agir booklet from Crédit Cooperatif, which offers contributors the opportunity to share 50% of their interests with the association.

Target: 1%

Gradually, over the course of several years, the legislative and regulatory context began to encourage solidarity savings. Latest update: Since 1 January 2022, the presence of solidarity units of account has become mandatory in life insurance contracts in accordance with the Pacte law of 2019. About a decade earlier, LME law required companies to offer a solidarity fund. to their employees as part of the company’s savings. The reduction of the benefit package on these savings for GSP-SMEs strengthened the system in 2019.

Result, supply side, “the market is structured by new entrantsJohn Salle says For example, insurers create or distribute their own products. New units of account appeared on the market. This is especially the case for Novaxia R in Novaxia (€190 million in assets) or Sycomore’s inclusive jobs in sycomore AM (€105 million in assets).

There are new players, specialists in “influencing private capital.” They invest in projects that combine profitability and support for a cause of common interest, while paying close attention to measuring the impact of that support. Like, for example, Alter Equity, a fund that invests ina startup that contributes to the transition to a more inclusive and sustainable worldThe change began in the 2000s when traditional finance players began integrating criteria other than financial into their operations. As such, today their offering is added to those of employee savings players, initially more militant, such as Nef, a banking cooperative founded in 1988.

In this decade, products called “exchange”, which consists in using income from financial investments to support associations through donations. Then, a decade later, Solidarity Savings was rolled out with traceable financial products that indicated exactly what savers’ money was going to be used for.

In the coming years for the Fair, solidarity funding should continue to grow. The offer should increase as distribution networks learn new products. As far as demand is concerned,Financial solidarity meets the appetite of saversJohn Salle says It meets the requirements of transparency by offering to invest in specific and identifiable projects, and by contributing to the general interest. All this without necessarily giving up your own interests.

According to a study by Autorité des Marchés financiers (2021), the profitability of solidarity assortments will not be lower than traditional products. On the other hand, their financial costs would be lower… Twenty years ago, solidarity funding represented 500 million euros of assets and 0.02% of French savings. Today, this percentage has risen to 0.41%. For John Salle:the figure remains modest, but solidarity savings are growing faster than savings as a whole. The goal is to reach 1%“.