The 20th
anniversary
edition
March 14 & 15, 2025
at UNESCO • Paris

You are the co-founder and president of Phitrust, an investment management company that has promoted impact finance since 2003. What are the main investment solutions that combine environmental and social impact with long-term financial performance?

Olivier de Guerre: Today, there are several types of investment funds that aim to combine environmental/social impact with financial performance:

• SRI-labeled funds (Socially Responsible Investment): These funds integrate "extra-financial" environmental, social, and governance (ESG) criteria into the selection of listed companies.
• Article 9 funds (listed or unlisted): These must invest exclusively in projects or assets that have a measurable positive impact on the environment or society (e.g., portfolios focused on themes like water, energy, etc.).
• Impact private equity: Funds that directly invest in private companies with a mission to solve environmental or social challenges (e.g., start-ups innovating in green technologies).
• Solidarity funds that invest in non-listed companies with a very strong social impact, in line with the ESUS law (often with an environmental focus). (e.g., funds focused on themes like inclusion through economic activity, education and training, social housing, etc.)

Advisors, wealth managers, banks, family offices, etc., are trying to adapt to their clients’ demands. They primarily focus on expectations in terms of impact intensity, investment horizon, and financial return. It’s clear that a very social impact fund won’t have the same return as a fund investing in green tech; the expected impact isn’t the same, and neither are the targeted individuals!

Investment duration also matters: the more investors stop expecting annual profitability, the more long-term product offerings will develop.

While CAC 40 companies' profits continue to reach record levels, social and environmental challenges don’t always seem to be a priority in the corporate world. How do you manage to mobilize financial actors in favor of ecological and social transition? How do you work with listed companies to ensure their environmental and social practices evolve?

Large companies are all aware of the need to evolve their strategies to address environmental challenges. Since 2017, we have encouraged CAC 40 companies to adhere to the SBTI (Science-Based Targets Initiative) standards, and 36 of them have now made firm climate commitments or are in the process of validating them. However, it will take time for them to reach these goals, especially due to the difficulty of transforming production tools, accessing non-carbon energy, and having customers willing to change their purchasing/consumption models (e.g., it’s hard to stop using cars or planes for travel…).

An investment strategy that uses shareholder engagement as leverage to create long-term value needs to be thought through over time, with repeated actions towards large companies to make the voices of minority shareholders heard and challenge executives on their transformation strategies. Engagement, as we practice it, requires a lot of expertise, long-term action capacity, direct relationships with the leaders of major companies, and the ability to bring investors together. This strategy yielded recognized performances in 2024!

In 2021, Phitrust became a mission-driven company and committed to "investing to act and contribute to the growth of companies that integrate human development and the preservation of our planet into their strategy." How has this change of status affected your initial operations, and what have been the results?

Paradoxically, this status has not changed our initial operations; it has highlighted the philosophy we adopted since Phitrust’s inception. Our ambition is to develop two investment strategies that seek to meet the needs of both listed and unlisted companies in which we invest.

This mission is tied to four main measurable objectives, tracked through the progress of certain related criteria. Adopting this status now requires us to produce an annual mission report, which is submitted to our board members and audited every three years by an external firm, under the guidance of our independent mission leader. The progress of the criteria tied to each objective ensures that the entire organization is focused on our mission in a measurable and accountable way.

We adopted the mission-driven company status in 2021. Our first audited report covered the 2022 fiscal year, with a very positive assessment. We still have areas to improve, notably the launch of new impact funds—we’re working on that!

In 2006, you launched the first private equity fund to support and assist social impact companies. This project, backed by Phitrust and its investors, provides financial support and structural assistance over several years to social impact businesses, particularly those focused on employment integration. What are the results of your actions, the companies you’ve supported, and what is your ambition for this investment sector?

Since 2006, we have financed over 45 social enterprises, mainly in France, Europe, and more marginally in Francophone Africa and Southeast Asia. Some of these enterprises originated from associations (for example, the La Varappe group is partly owned by the La Varappe association, as is Ecodair), while others were created directly by entrepreneurs (e.g., LemonTri and Les Alchimistes).

These growing companies need patient capital to develop and strategic and operational support. We are fortunate to be able to gather private investors with operational experience, willing to assist the leaders of these businesses. Social entrepreneurs can thus receive the necessary support. We also chose to remain investors as long as these companies need our support and expertise. It takes time to combine a socially focused project with economic return, but over time, we have many success stories, with only 7 companies failing over 17 years!

Investing for the long term has allowed the La Varappe Group to reintegrate over 100,000 people into the workforce in France, generating more than €100 million in revenue in 2024. Similarly, the Laiterie du Berger in Senegal has helped over 15,000 pastoralist families in the Sahel to earn a living, with the company generating over €30 million in revenue. ECODAIR has employed more than 120 people in difficult situations, refurbishing computers to sell to people who cannot afford new ones, with the company generating over €7 million in revenue in 2024.

None of these results would have been possible without the decision to prioritize the long-term with patient capital, which inherently reduces the internal rate of return (IRR) for investors. But the trade-off is a very strong social impact, which we monitor with specific goals set with the companies we finance.

We’ve just launched a third fund, Phitrust Partenaires Inclusion, which will soon close with institutional investors, while the share for private investors remains open. Our ambition is to convince more and more private and institutional investors that social impact should be treated and invested in just as much and in parallel with environmental impact. We cannot separate the two if we want to achieve a just transition for our children. Our ambition is to ensure the economic sustainability, and thus the social impact, of the companies in our portfolio. We also aim to create new impact funds, drawing from Phitrust's image and expertise.

You will testify at the Université de la terre on March 14 & 15, 2025, and will speak on the topic: The shareholder planet. What are your thoughts on integrating natural stakeholders into boardrooms, and what do you see as the future of this revolution?

The concept of "nature as a shareholder" is an innovative idea aimed at recognizing nature as a legitimate economic actor, similar to a shareholder in a company. However, I don’t think it fully addresses the intended objective or the logic of Board of Directors. Granting legal status to nature as a shareholder would require significant changes to current legal frameworks. Who would effectively represent nature?

It is essential, of course, that companies’ strategies incorporate the impact of their activities on the planet and our ecosystems. Boards of Directors must take on these issues to ensure that strategies include the protection of a living planet, both in existing activities and future projects. Even regenerative actions need to be implemented.

And board members must be trained on these issues or welcome experts who can help them address these critical topics for both the planet and businesses. Those that ignore them will likely cease to exist in 30 or 50 years! It took time to realize this, and it will take time to achieve it because changing production processes, consumption behaviors, and considering vastly different issues in OECD vs. "emerging" countries, as well as cultural differences, are all barriers to rapid change.

Fortunately, we are seeing that some companies, such as Kering, are now publishing their biodiversity impact at their Annual General Meetings. Still too few, of course, but it’s a sign that the "planet" issue is starting to be taken seriously. Our job is to push other companies to evolve quickly by acting as engaged minority shareholders!