The Institut de la Finance Durable publishes its panorama of additionality levers in impact finance

This overview, the fruit of work carried out within the Institute for Sustainable Finance (IFD), offers a structured analysis of the mechanisms by which investors seek additionality. Based on 11 detailed case studies, this deliverable offers a concrete illustration of the operationalization of additionality and aims to contribute to a shared understanding of this key pillar of impact finance.

Additionality: from definition to practiceAt the heart of the definition of impact finance established by the marketplace work coordinated by the Institute for Sustainable Finance, additionality corresponds to the specific contribution made by financial players to enable the beneficiaries of investments/financing to themselves increase the impact generated by their activities. This Panorama aims to enlighten market players on existing strategies for implementing this additionality. It offers an interesting perspective on the actions available to investors to maximize impact.

Five identified levers for actionThe Panorama classifies the practices observed on the basis of the five distinct additionality levers presented in the market studies, offering a clear vision of these through concrete examples:

1. Financing under-financed market segments: providing capital to geographical areas (e.g. emerging countries), sectors (e.g. methanization) or structures neglected by traditional financing (e.g. SSE structures).
2. Providing capital or flexible financing: offering preferential or adapted financial conditions (patient capital, indexation of rates to impact objectives, innovative structuring) to enhance the potential of the underlying asset.
3. Extra-financial support: strategic and operational support for investments (provision of experts, access to networks, help with CSR structuring), particularly crucial for non-listed andearly-stage companies.
4. Active engagement: the use of voting rights, dialogue with management and the filing of resolutions to influence assets or the implementation of impact clauses.
5. Signaling the importance of impact: sending strong market signals through selective allocation policies, transparent communication and active participation in market standards.

The Institut de la finance durable has analyzed the methodologies of 11 funds, covering a wide range of asset classes (infrastructure, private equity, private debt, listed, real estate). For example, and without the funds being limited to a single lever of additionality, we can cite:

• ADEME Investissement and SWEN Impact Fund for Transition 2, which illustrate the financing of infrastructure and innovative technologies (e.g. methanization, decarbonization) that may be deemed too risky by the conventional market, or Microfinance Solidaire, which provides financing for social enterprises in developing countries.
• INCO Ventures, which adjusts its rates for associations and cooperative ventures, or LBP AM Midcap Senior Debt, which implements incentive mechanisms (rates indexed to impact objectives).
• Ring Capital, which provides its investments with the expertise of its teams, a concrete plan for the first 100 days and the support of its operational partners, or PERIAL Euro Carbone, which has an in-house team dedicated to managing and achieving impact objectives for its real estate assets.

• Echiquier Positive Impact Europe and Ecofi Agir pour le Climat, which detail how shareholder engagement, rigorous dialogue and a well-defined escalation strategy can transform the practices of major listed companies.
• Delubac Impact Positive Health and CM-AM Impact First Inclusion, which offer perspectives on the implementation of a sharing share and the construction of an ambitious capital allocation matrix.

The document also includes a perspective from the European Investment Fund (EIF), underlining the structuring role of funds of funds in the ecosystem.

Cécile Goubet, Managing Director of the Institut de la Finance Durable, comments:
‘With this Panorama, we are taking a new step. It’s no longer just a question of defining what impact is, but of showing ‘how it’s done’. By listing these levers and illustrating them with practical examples, we are giving investors the keys to characterizing their additionality in their impact finance approach.’