The operation launched at the end of May by Florentin Letissier, deputy mayor of Paris in charge of the social, solidarity, and circular economy (SSE), is being carried out with Crédit coopératif, a historical player in the SSE, and Paris Initiative Entreprise (PIE), an association of help and support for entrepreneurs in their social, territorial, or environmental impact projects.
The aim of this fund is to increase the funding, on the Paris territory, of such so-called “impact” projects. The emphasis will be “on small actors in the start-up phase, i.e., up to 3 years, or who plan to move their activity to a larger scale. The investment per project can be between €30,000 and €100,000.
Another priority area for selecting beneficiaries is the circular economy, through recycling, repair and reuse of materials, products, reconditioning of electronic and digital products, etc. “Take the example of fashion, of which Paris is considered the capital” adds Florentin Letissier. “Through this investment fund, we would like to support Paris-based companies that produce sustainable clothing from recycled and recyclable materials there, at a decent price that allows the manufacturer and its employees to be remunerated, for more sustainable fashion than multiplying the number of collections per year.”
While pointing out that SSE-related positions already account for 10 percent of all Parisian jobs, he adds, “This is the new relocated economy we want to support. The important thing is to create sustainable jobs in the Parisian territory or to help companies that would like to establish themselves in Paris. Today it is no longer a niche economy, but it still has room for improvement.”
In fact, the fund plans to invest in about 40 companies, to help create more than 400 sustainable jobs and thus generate a turnover of about 200 million euros.
The development of SSEs and impact enterprises is also in the mindset of Crédit coopératif, which is involved in launching the fund. The fund intends to apply for the Fair-Finansol label, which distinguishes solidarity savings products among the mass of investments offered by financial institutions.
For the first fundraiser, the city of Paris is providing 890,000 euros through Paris Initiative Entreprise. Crédit coopératif is putting 500,000 euros on the table, and discussions are underway with private operators also eager to develop this economy.
Finally, the fund aims to raise 10 million euros, of which a maximum of 10 percent will come from Crédit Coopératif and a maximum of 20 percent from Paris City Hall, again through PIE. The public investment bank (BPI) is providing its guarantee, as is the city hall. This double guarantee means that each investor sees his or her subscription “insured” by up to 33 percent, stresses Fanny Massy. The promised return to investors is between 2.5 and 5.5 percent.
An ethics committee, which will include Paris City Hall, will oversee the rigorous selection of projects. The first will be funded in early 2023.