

The French government has started the process of launching its versions of social impact bonds, with Mirova, the responsible investment division of Natixis Asset Management, supporting the process.
Last month, Martine Pinville, a Secretary of State in France’s Finance and Industry ministry, launched “les contrats a impact social” (CIS), a form of social impact bonds – where sponsors, usually governments, pay private investors a return for funding successful social projects that meet measurable outcomes.
In a statement, Pinville makes a call for proposals for prospective so-called CIS.
Speaking to Responsible Investor about the move, Philippe Zaouati, CEO of Mirova, said the government had been initially reluctant to introduce social impact bonds due to a fear of the privatisation of the social space. But it had started to look at this issue a few months ago, and now things had moved forward. It follows the work of a committee on social investment presided by vice-president of the Credit Cooperatif Hughes Sybille. He wrote a report to the government in 2014 on social impact investment that encouraged the development of new finance tools, including social impact bonds.
Social impact bonds typically have three main actors, an entity that will pay for measurable social outcomes such as reducing teen pregnancy; an organisation to deliver the social service; and an investor who will fund the social work in the hope of getting a return if targets are met. Zaouati says while there was a good pipeline of social organisations and potential investors, there was a question mark on who would pay outcomes from the project.He recommends a centralised entity to support public authorities in funding CISs. The UK government has created centralised pots to support local governments in creating social impact bonds.
On investors, Zaouati said there had been talk of state fund Caisse des Dépôts investing in CIS as a first-loss investor. He added that the fonds solidaire scheme created six years ago could be a potential investor in CIS. In France, pension providers for French employee savings schemes must offer the option of at least one solidarity fund or ‘fonds solidaires’, which provides a mix of socially responsible and high impact social investments. Assets in the solidarity funds have quadrupled to reach almost €3bn invested by almost one million French savers.
President Holland had recently made a statement to the Caisse des Dépôts asking it to allocate funds to the social economy.
Zaouati said Mirova was working with NGOs on developing CIS and was confident that one or two could launch this year.
The French government has created a dedicated website for “les contrats a impact social” which includes details on making proposals and a timeline. The first projects are due to be selected this June.
Zaouati said potential social causes to be targeted through the CIS model include, health, debt and employment support.
Additional reporting by Margaux Gatty.