September 10, 2022
02:20
The Flemish serial investor Piet Colruyt and the director of investments of the financial arm of the State Céline Vaessen launch an appeal to pension funds and bank insurers. “A return is also possible on the side of societal projects.”
This is equipped with their pilgrim staff as Piet Colruyt and Céline Vaessen have just met all the major financial players in the country. And for good reason, these last still do not seem to have initiated a necessary transformation of their way of doing things, laments the first, nephew of the current boss of the family retailer, but also and above all one of the figureheads of investment in impact.
He goes on: “While nearly 200 billion euros of private and public capital are currently invested in Belgium, it is estimated at this stage that only 5% comply with Article 9 of the SFDR Regulation (a European regulation imposing transparency rules on financial market participants and financial advisers in the EU with regard to the integration of sustainability risks and the consideration of negative impacts on sustainability in their investment and advisory processes, editor’s note).”
For him, this observation is edifying. Especially if we look at impact investing itself.that is to say, inquiring regarding societal and environmental aspects in addition to a search for yield, “which represents around 1% of this capital“, or more specificly more support for social projects, “who does not represent there not even around 0.1%“, it appears from the first figures collected by the person concerned. The exact percentage will be known following research work carried out by a dedicated team.
Céline Vaessen, Director of Investments at the SFPI, also observes this reality in her practice.
What response?
Piet Colruyt: We are going to launch on January 1st the “IF Belgium” institute (for “Impact Finance Belgium”, Editor’s note), with the idea of getting the financiers to make a shift. There is momentum, beyond the falling stock market and the news.
Celine Vaessen: We want to make it a place of learning and inspiration. Whether on certain specific products – such as les social impact bonds -, but also on what has already been done, what works or not (and why).
What is the objective?
PC: From 1% of capital invested in impact, we are aiming for 10% by 2030. So, we are obviously not saying that everyone must invest 100% of their capital in impact projects – we are realistic -, but although there is a way to do more than what is currently being done. As much as it is necessary. Indeed, to develop a real regenerative agriculture sector (which regenerates the soil, increases biodiversity, sequesters carbon…, Editor’s note) for example, we will need several billion. However, here, only 2 billion are dedicated to the impact to date, and this, on all themes.
“To develop a real regenerative agriculture sector, for example, we will need several billion. However, to date, only 2 billion are dedicated to the impact.”
Some might argue that we are already seeing investment funds raise substantial amounts on these issues…
PC: Yes, but I fundamentally think that beyond the entrepreneurial families who are already well invested in these issues, the major players in finance must now be mobilized. I am thinking in particular of pension funds and bank insurers.
“Entrepreneurial families are already well invested in these issues, the major financial players now need to get involved.”
CV: On the side of the SFPI, we have changed our investment strategy in 2020. From the very classic pillars of aeronautics, finance and life sciences, we have also opened up to the impact, to mobility and energy, for example, themes in which we seek to co-invest with the private sector. I say seek, because we see a real difficulty in finding these private co-investors in the field of impact, in particular on the side of institutional investors who are very little present today. Otherwise, we currently co-invest with many individual investors, who do not necessarily have the same strike force, which therefore forces us to have to invest in smaller projects.
“For lack of institutional investors, we are now co-investing with many individual investors, who do not necessarily have the same strike force.”
What do you think is blocking?
CV: Risk is indeed a particularly blocking element for this type of player, as well as bank insurers, who are subject to specific regulations. But that’s looking at the glass half empty, rather than half full: solutions exist to overcome this, particularly in terms of the structuring of specific instruments allowing each player to take a specific risk for the return that ‘he is waiting. However, this requires communication between the various links in the chain, which we intend to facilitate via the Institute – for which we are seeking sponsors – and the various events organized as part of Impact Week (to be held from November 28 to December 2, Ed).
Could you cite any success story at this point?
PC: Wattson, who renovates rest homes to improve their energy performance – we are talking here regarding a 40% reduction in emissions. We started with twelve houses to reach 200 today, with a yield of more than 5 to 6%, while allowing residents to see their condition improved.
“While we expect a very good return from a company like Univercells, it is clear that, on the private side, the company is mainly supported by institutional investors… Americans.”
CV: As mentioned, our shift on the impact is recent at the SFPI. However, we can still cite Univercells, which wants to make vaccines accessible to all. We expect a very good return, in addition to a major societal impact. Unfortunately, it is clear that on the private investor side, the company is mainly supported by institutional investors… Americans.
The key phrases
- “To develop a real sector in regenerative agriculture, for example, we will need several billion. However, to date, only 2 billion are dedicated to the impact.”
- “Entrepreneurial families are already well invested in these issues, the major financial players now need to get involved.”
- “For lack of institutional investors, co-investments are now made a lot with individual investors, who do not necessarily have the same strike force.”
Impact, a sector that is mobilizing
The network of impact investors Solifin, of which Piet Colruyt is president and Etienne de Callataÿ administrator in particular, published last May a report on the subject of its second year of activity.
The number of projects supported – not just financially – by its members (including the 4Wings Foundation, Ecco Nova, Incofin, Kois, Lita.co and Triodos) has doubled between 2020 and 2021, reaching around sixty projects.
At this stage, the bulk is to be found in Flanders (nearly 40%) and at stages of maturity generally prior to that of the scale-up. Agriculture also holds the palm among the fashionable sectors, ahead of education, health and responsible consumption.
Among the projects selected, we can mention Marie Poppies, which raised more than 200,000 euros from two members of the Solifin network. The young shoot offers a consolidated offer of sustainable flowers from 13 Belgian producers, while the majority of flowers sold in Belgium today are produced using up to double the pesticides authorized for the food industry. And this, coming from Holland, where they are grown in heated greenhouses, or from Kenya and Colombia, where they are transported by refrigerated plane.
La Coupole has also developed a search engine for the financing instruments available in order to allow project promoters to find their way around what currently exists on the market.
