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BNP Paribas finances a Social Impact Bond for veterans in the United States
- 25.10.2018
On 3 October, the United States Department of Veterans Affairs launched a Social Impact Bond (SIB) worth $ 5.1 million to improve employment opportunities for veterans who suffer from post-traumatic stress disorder (PTSD). BNP Paribas is co-financing the fund in partnership with the US Department of Veterans Affairs, the Commonwealth of Massachusetts, the cities of Boston and New York, and the non-profit association Social Finance Inc.
Veterans CARE programme: return to employment to prevent exclusion
The Veterans CARE (Coordinated Approach to Recovery and Employment) project will help 480 army veterans to find a stable, quality job. It will run over 3 years in New York, Boston, Brockton and Central and Western Massachusetts. Medical centres in the participating regions, which are linked to the American Veterans Administration, will offer individual placement and support (IPS) to beneficiaries. The medical centre of Tuscaloosa in turn will coordinate and supervise the project.
Various criteria will be used to assess the SIB’s success:
- earnings level
- sustained competitive employment
- fidelity to the IPS model
- job satisfaction
“ BNP Paribas has a proven track record of investing in pay for success projects in order to drive social change across the americas. through the veterans care project, we are determined to help improve employment possibilities for us veterans living with post -traumatic stress disorder. ”
CEO of BNP Paribas CIB Americas & Head of Global Markets Americas
Sharing the financial risks to develop social innovation
Based on the principle of Pay for Success, SIBs (Social Impact Bonds) rely on innovative partnerships between public authorities and the private sector to address a major social issue, improve the living conditions of the people involved, and make a positive impact on society in general. With this system, private investors finance a social project in its trial phase without any guarantee that they will get back the sums they invest. Return on investment will depend on the project’s success in terms of social impact. For each new project, specific success indicators are determined and measured by independent experts.
Becoming the benchmark bank in solidarity and social economy
In line with the UN’s Sustainable Development Goals (SDG), the CSR policy at BNP Paribas is based on 4 pillars that include the financing of a positive impact economy and forms an integral part of its business development plan for 2020. In recent years, the bank has multiplied initiatives in this field:
- In 2016, BNP Paribas was already the lead partner in an American SIB conducted by the State of Connecticut to have fewer children placed in foster care.
- The same year, the French government launched a call for projects for the first SIBs (or CIS for Contrat d’Impact Social) in France. The Group has structured and funded two out of four certified projects in this way.
- As of the end of June 2018, EUR 1.2 billion were allocated to social entrepreneurship and microfinance, to serve more than 1,700 clients and partners.
Photo credits : header ©oneinchpunch // ©YiuCheung