FINANCIAL INNOVATIONS TO ACCELERATE SOLUTIONS FOR SMART MOBILITY

From Insights Movinon

One line description: FINANCIAL INNOVATIONS TO ACCELERATE SOLUTIONS FOR SMART MOBILITY

Description: How to adapt latest financial innovations to accelerate intelligent mobility?

  • Understand the role of extra-financial rating agencies.
  • Explore how recent financial innovations can acceleration the transition towards smart mobility.
  • Review sustainable corporate loans, including green loans and positive incentive loans.

Image:

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Organization: BNP PARIBAS

Participants:

Category: ACCELERATE CHANGE

Theme: financing innovation, new business model

Leader: DUTEIL Hervé

Facilitator: BINETTE Sonya

Expert: LANG Heather, MOITRY Cécile

Action:

Email or forum discussion :

Chat discussion canal : https://chat.fabmob.io/channel/movinonconf

Next Step :

Feel free to comment, complete and join this initiative !

FROM THE MINUTES 2018

Getting approval for a funding project based solely on its financial viability is a thing of the past for many institutions. Today, established funding bodies such as BNP Paribas are issuing positive incentive loans tied to a project’s corporate responsibility instead of solely on its financials.


THREE FINANCING SOLUTIONS

SUSTAINABILITY BONDS

Proceeds are used to finance or refinance social and environmental projects.

GREEN LOANS

Environmental criteria are used to assess a project’s viability for funding.

ESG LINKED LOANS

Links loan pricing to a project’s adherence to environmental, social and governance (ESG) criteria, through third-party companies like Sustainalytics.

ASSESSING RISKS IN THE KNOWLEDGE ECONOMY

When looking at future risks, funding bodies consider:

Tangible assets: Fixed assets such as buildings and machinery

Intangible assets: Non-physical assets such as patents and brand value

According to the World Intellectual Property Organization, a shift to the knowledge economy in recent years has seen intangible assets grow from 20–80% of corporate balance sheets.


AN INTANGIBLE ASSET BASED ON CORPORATE RESPONSIBILITY

Experimental finance takes more than financial risk into consideration, it considers a project or company’s ESG risk, defined by how it manages these variables:

Environmental: How will climate change impact this company or project?

Social: How well will this company or project assume responsibility for social factors such as inclusiveness and local community impact?

Governance: What is the balance of power between this company’s CEO and Board of Directors?


PROJECT BUILDING UTOPIA

Movin’On participants were asked to imagine they were superheroes who had to come up with incentive financing for imaginary galactic cities.


STARPEEDIA’S DPS DRONE TRANSPORTATION SYSTEM

We have created the DPS drone transportation system. The world will be a better place because it will reduce CO2, increase mobility and put less stress on infrastructure. We impressed the galactic council by financing our project with a loan that links its interest rate to usage: the more the product is used, the lower the interest rate.

VELOCITY GREEN BUSES DELIVERY SYSTEM

We have imagined a smart delivery system that adds package delivery to city buses. Commuters can pick up their Amazon deliveries during their bus ride home. The world will be a better place because this project will:

→ Eliminate the need for a lot of trucks and last-mile deliveries

→ Encourage people to use the buses

→ Create a line of revenue for the bus company

We impressed the galactic council by financing our project with a green bond


ESG FINANCING IN ACTION

BNP PARIBAS’ $2 billion positive incentive loan to Danone

Banks led by BNP Paribas have added sustainability criteria to an existing $2-billion loan to the Danone French dairy group. Lenders will charge the company a lower margin on a credit line if it meets specific social and environmental targets.