As cities accelerate climate neutrality, the necessary innovations to reach this goal are costly. Leuven’s solution to these financial barriers? A Financial Architect to creatively pave the way.
The city created the role of Financial Architect in the framework of Leuven 2030, an NGO dedicated to achieving a climate neutral city by 2030. Leuven is one of 112 European Mission Cities on the road to an accelerated climate transition towards 2030. Its Climate City Contract reflects this commitment, boasting an impressive portfolio of 86 breakthrough projects which cut across seven key themes.
Carrying out these projects comes with significant financial demand. Project risks remain high and traditional expectations of financial returns can not be guaranteed. While EU and national funding continue to contribute, this financing challenge requires an innovative approach, leading to the appointment of Filip Coenen as the Financial Architect for the Leuven Climate City Contract.
He took on the role full-time in February 2023. Over the course of his career, he has seen the financing landscape from every angle – an entrepreneur founding, growing, and selling companies, an investment manager, a business developer coach and even a program manager of data analytics for Belgium’s largest retailer.
Today, he spends his days putting together the puzzle of complex financial strategies, building partnerships with stakeholders and championing innovative funding to promote the city’s climate neutrality.
What are you trying to achieve in your position?
In the long term, my goal is to deliver an investment structure and approach that finances the climate transition in a socially just manner.
In the short term, the main objective is to prove it can be done. We need to show that it’s possible to attract new funding that wasn’t available before. By leveraging the Climate City Contract and the breakthrough projects outlined within it, we aim to secure our first investment deal this year and establish an investment fund. It will be an impact fund which aims not only to generate financial returns for investors. The primary goal is to create positive social and environmental impacts.
What’s your personal motivation to do this job?
This role lets me apply my professional experience and skills in a meaningful way that’s truly changing the city. Throughout my career, I have always had a tendency to go beyond the ordinary and choose the adventurous path.
The magnitude, complexity and intellectual challenge are what initially drew me to the position and these same aspects motivate me daily.
What are your main challenges?
Given the scale of the work and still being in my early days in the position, my days are packed with meetings as I get to know the landscape at a high pace. The city is one of the most important stakeholders, but it is not the only one. My agenda looks like a game of Tetris as I am in the process of establishing relationships and building bridges across city departments. It’s my way of creating open dialogue from the ground level all the way to the mayor.
This doesn’t always leave enough time to reflect and tackle the strategic questions, such as determining financially acceptable return rates, linking projects with lower financial returns but higher social and environmental impacts, blending different types of investors, funding and projects.
Should we establish a local energy company? How can we elevate our circular economy initiatives? How can we build an investment strategy based on our real estate assets, mobility strategy or nature-based solutions?
When was the last time you felt that your position had a positive impact on your city’s inhabitants?
I’m still in the honeymoon phase with overall positive reactions from the public. The most direct interactions I have had with our citizens so far was through our General Assembly and the Board of Leuven 2030, where citizens are an officially represented stakeholder group. On both occasions, my plan and approach were very well received by the public.
If you had a magic wand, what could significantly improve the way you do your job?
Establishing a fund for a socially just climate transition is still a new idea and raises a lot of questions. While the investment risks remain high, the expected returns are lower. One of the first questions I am typically asked by investors is: what will the guarantee position be in the fund?
This question illustrates the expectation of investors. As the government is involved, they often expect the government to provide a guarantee to cover part of the investment risk. While this might seem like a straightforward question, it is crucial to ensure that the government does not assume all the risk while private investors cherry-pick projects with high financial returns.
If I had a magic wand, I would use it to fast forward a couple of years ahead in time, where I believe that other parameters like social impact, climate impact and the like are considered as important as the financial parameters. I strongly believe this change is coming and I also see signs that it is already happening. We are just not there yet.
Pitch your job to other local, regional, national or European governments.
A Financial Architect is someone who gets the financing job done, so that the city and other key actors can reach their objectives. They connect the dots, create an overview and build a coherent story. If cities are to achieve their ambitious climate goals, local governments must, on one hand, build the bridges internally and on the other hand, externally connect with the broader financial world.
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This interview is part of ‘Urban Pioneers,’ a Eurocities series published every second and fourth week of the month spotlighting innovative and original job positions in municipalities across Europe. Each article in this series highlights a job position aimed at improving wellbeing, health conditions, society and the environment in cities. From tackling the urban heat island effect to countering gender imbalances to encouraging sustainable mobility, ‘Urban Pioneers’ showcases how cities are leading by example and breaking new ground in enhancing people’s quality of life. ‘Urban Pioneers’ jobs can inspire national, regional and EU authorities to create similar positions in their own structures, multiplying across Europe’s regions and nations the positive impact that started in cities.
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