Transforming society through investment: Impact investment report 2021

In the face of the worsening climate crisis, we are committed to continuing to deepen our philanthropic mission through an ambitious investment policy that contributes to a greener, more inclusive and fully sustainable society. Aware of the strategic role that foundations can play thanks to their patient capital and knowledge of needs, the Foundation has organized itself to support the creation and development of alternative, sometimes even disruptive, models that are consistent with its vision and values, but also with the imperative of an urgent transformation that more and more people around the world are demanding.

Investment is based on two historical parameters: risk and return, the latter being the one that foundations used to privilege with a view to preserving the sustainability of their capital and, therefore, their shares. However, for several years now, there has been a third “extra-financial” parameter that completes the equation: the impact of investment on social and environmental issues and even governance. This key challenge for the future of our planet made us undertake and deepen this new path seven years ago. This third investment report provides a summary of the road traveled with the results and the business adventures we have embarked on. Happy reading!

Investments and patronage at the service of transformation

Our investment policy takes into account, on the one hand, the desire for profitability and, on the other, the search for alignment with our mission and our values. The Foundation intervenes responsibly in the financial markets, while committing to socially responsible investment (SRI) strategies and impact investing.

Based on its Investment Code and with its Financial Committee setting the course, the Foundation has always opted for a “dynamic” profile that combines shares, bonds and diversified management (real estate, private equity, infrastructure, etc.). This dual strategy (consistency/diversification) has allowed us to stay the course in difficult times (+8.56% in 2021 and a negative but amortized return in 2022). We have also accelerated our impact investing strategy with a target of €75 million by 2023. In 2021, within the framework of our Sustainable Food line, we have designed in collaboration with Quadia our Feeding the Future call, for the first time in a hybrid way, with investment as a complementary channel to patronage.

The green transition: a key pillar of our investment

policyIn 2015, within the framework of COP21, the Foundation took action by adopting environmental commitments in terms of investment with, among other measures, the decarbonisation of its portfolio by signing the DivestInvest manifesto.

With the signing of manifestos by the French and Spanish Climate Coalitions, the Foundation further integrates the challenges of the fight against climate change into its social mission, its operation and its financial policy. In this area, we are trying not to give up on our efforts to seek investment opportunities in line with the new European taxonomy, as well as to improve the performance of the climate segment in line with the objectives of the Paris Agreement.

The year 2021 has also witnessed our desire to move faster and faster towards a low-carbon society. We continue to pull our “green thread” in our portfolio as a whole, with 40 million euros invested, of which 13.75 million correspond to 2021. We have made investments in a private debt fund aimed at financing more environmentally friendly maritime infrastructures and technologies and in another dedicated to the agricultural and food transition. In addition, we have acquired new stakes in three impact funds in which we are already present.

Impact investing: supporting the creation of alternative models

In impact investing strategy, the challenge lies in identifying models that promote solutions for a sustainable and inclusive world. In 2021, 46 million euros have already been committed (9% of the Foundation’s assets). The Foundation invests mainly in funds that support growing companies, generally innovative, and in all cases groundbreaking with respect to the established. The Foundation is committed to the change of scale of these actors and their ability to move the limits. With this intention, it identifies actors in vacant issues or those that are little exploited by large investors.

In 2018, we created the FDNC-SFS fund dedicated to the agricultural and food transition, which has already committed €7 million (+€2 million in 2021) to 11 bold companies. As Gaspard Verdier, president of Simandef, says: “The Foundation is a powerful and valuable ally when it comes to launching a project and obtaining recognition and legitimacy. Although the development of these still fragile companies can be questioned by both internal and external shocks, their capacity for innovation, always in the spotlight and sometimes copied, as well as the shocks they cause in the value chains validate this type of approach and underpin the need to accompany them.”

The Foundation’s main motive is to contribute to the objective of its “theory of change” for sustainable food and citizen art, the relevance of the model or solution and its potential for scaling up. Launched in Spain, our new Tiina program focuses, for example, on the initial or start-up phase with financial support associated with training, strategic alliances, mentoring network and acceleration tools. A similar programme will be launched in France shortly.

Together with volunteer experts from different impact funds and social incubators, the Foundation has studied the impact investing sector in Spain in more detail to understand the main challenges and identify the specific role it could play. Thanks to this process of collective reflection, in 2021 we established a three- to five-year strategy.

On the one hand, it is a question of making concrete investments in social structures and impact funds beyond the already existing FDNC-SFS fund. The Foundation will support projects in the launch phase in the fields of sustainable food and citizen art through Tiina and will invest in multi-thematic impact funds, as well as in funds dedicated to the fight against climate change.

On the other hand, it aims to inspire and mobilise other actors in the Spanish ecosystem. The Foundation will participate in research processes in order to contribute to the development of the sector, as well as in several reference networks and events (such as SpainNAB or Impact Forum). Given our dual role as both a grant-making and an investor-based foundation, we wish to encourage social and solidarity economy (SSE) actors to consider impact investing as a source of funding and encourage investors to be more demanding about the impact dimension. This strategy includes the project of mapping citizen art within the framework of impact investing.

In addition, in Spain, el17, the House of Alliances in Madrid, was born, a real estate project to refurbish a building in Madrid launched in 2020 and which continues its course with its definitive name that alludes to the United Nations Sustainable Development Goal (SDG) 17: “Partnerships to achieve the goals”. Made up of offices and industrial workshops and located in the Delicias neighbourhood, it will be refurbished in a sustainable way to create a collaborative space open to its surroundings.

It will be a place for training, accompaniment for social entrepreneurs and associations, for life and meeting, and will serve to show the sustainable food and citizen art solutions proposed by the Foundation and its collaborators. This “house of alliances” responds to our desire to unite projects and create connections between them to better face the challenges of our planet.