Rupesh Madlani, co-founder and CEO of Bankers without Boundaries, explains how this non-profit applies financial concepts and structuring to high impact projects to align them with the investment needs of capital markets.
It was the kind of career switch that increasingly more people in the financial world consider at some point, but few realise. Rupesh Madlani did make the move ten years ago.
After spending a decade at Lehman Brothers and Barclays, focusing on equity research in sustainability and clean technology, he co-founded the social enterprise Bankers without Boundaries (BwB). The name is a reference to the ethos of Médicins Sans Frontières, which provides medical aid where it is most needed. The aim of the new non-profit was to assist projects with a high positive environmental and social impact.
Together with Angus Forbes, also a former investment banker and the first director of the Prince’s Rainforest Project, Madlani researched the topic for quite sometime before actually launching BwB.
“The missing link was obvious. Every time I attended a meeting of the UN, the World Economic Forum or the World Bank, I noticed a clear lack of engagement from the private sector. We concluded there was a big need to serve governments, cities, foundations with expertise to mobilise private capital.”
Ten years later Madlani has no regrets. “I’m super proud of where we are and the work that we are doing, the impact that we’re having. We have build a team with decades of investment banking experience. Their commitment allows us to engage into projects that in many cases have no access to this expertise or network, at a significant discount to market rates.”
100 climate neutral cities
Currently, one of the main activities of London-based BwB, which also has offices in Ireland and Singapore, is its involvement in the ‘EU Mission’ for the creation of 100 climate-neutral and smart cities by 2030. It is advising a number of those cities on how to kickstart several initiatives and to map out the various private and public forms of financing that are available, or suggesting new forms of financing.
For instance in the Belgian city of Leuven, BwB is helping to set up a city fund to pave the way for the transition towards a greener economy and climate resilient future. It does so in close cooperation with Climate-KIC, the largest European public-private partnership created to encourage the development and creation of a net-zero society.
The BwB team is leading on the development of a Mission Cities Capital Hub, that brings together public and private capital to help cities access funding for projects to improve climate neutrality. The hub is a platform to help convene and accelerate transition pathways that are already established but not often used.
Also in the city of Milan both organisations are advising on the proposed creation of a Zero Carbon Fund, aimed at reducing GHG emissions through the implementation of urban regeneration projects, and in particular the decarbonisation of the real estate sector. The fund is looking to raise its own capital by issuing Zero Carbon Certificates for new construction sites.
The Future Cities of South East Europe, a collaborative initiative led by five cities, aiming to deliver on the ambitious mission of achieving an inclusive, prosperous, and zero-carbon transformation of a total of 15 neighbourhoods in the region. BwB is helping the cities reach out to a list of potential investors including both public bodies and developmental institutions. Where possible, local, small-scale private capital will also be involved.
Accelerating debt structuring and startups
BwB is also advising some 20 low-income countries on debt structuring, by innovating finance mechanisms and instruments that direct debt issuance and refinancing to delivering nature and climate performance. Last year a landmark transaction for Uzbekistan was reached. “We’ve been pushing the concept of sustainability-linked bonds,” says Madlani. “It’s a very exciting area to work in. A critical component of our success in this work is to build required capacity with central departments and line ministries to establish a clear feasibility analysis and roadmap for how solutions may be scaled effectively.”
The organisation has also set up an accelerator programme which is designed to help impact-driven European startups achieve commercial traction and build investment cases, supporting them to raise finance and scale their business.
The programme is still in a pilot phase. However, over 50 companies which aim to have a positive effect on the environment and/or society have already applied. Madlan says: “The idea behind it is that there is enough money in the market that wants to be put to work to achieve impact. We think that with our experience, global networks and familiarity with global funding sources we can help these companies to bridge the financing gap.” Selected companies will receive free support from the BwB team for 12 weeks. The organisation is financing the programme with its own money, as well as with funds from family offices and private investors.
Impact Investor Group
BwB has also created the Impact Investor Group (IIG), a public-private collaboration board. “This is a group of very experienced investors in the impact investing sector,” says Madlani. “We’ve set it up because there is such a big need to foster collaboration.”
The founding group of the IIG meets quarterly with a cohort of varied investors from different backgrounds, ranging from angel to institutional investors. “The IIG ads great value to our work. They help us explore issues and solutions that otherwise might not have been picked up. And it is because we are so close to the financial ecosystem that we are able to organise this support.”
Recent topics discussed at the IIG include diversity and inclusion, resulting in BwB launching a new sector of focus looking at gender, diversity and inclusive finance.
