On Tuesday, 30th November, 15:00-18:00 GMT the Impact Investing Institute, Lloyds Banking Group and Metro Dynamics hosted an event to launch the report Building Strong Places: a new, impactful role for financial institutions.
The event took place at Fazeley Studios in Digbeth, Birmingham and was livestreamed to a virtual audience from 15:30-17:00.
There is a real opportunity for responsible private capital to invest directly in UK towns, cities and regions in ways that enhance local resilience and deliver positive social outcomes as well as driving inclusive economic growth and addressing the climate challenge.
Working with sector experts, Lloyds Banking Group has been looking into how they can more actively engage with places to support their ambitions through thoughtful investment in commercially viable opportunities, working closely with Birmingham, Leeds and Liverpool City Councils to trial new approaches.
As well as an overview of the report provided by place and regeneration experts Metro Dynamics, senior representatives from each of the City Councils joined Jamie Broderick of the Impact Investing Institute and Chris Sood-Nicholls – Managing Director, ESG & Regional Regeneration at Lloyds Banking Group – to share their experience of the project and key learnings.
Key messages from the discussion
- For place-based impact investing to be successful, long-term, patient relationships will have to be developed. Partnerships between local governments and private sector partners should not be limited to one-off interventions and projects. Instead, engagement should be facilitated on the basis of a place-wide strategy which addresses the needs of a place over a longer period of time. Successful partnerships will require patience from all parties.
- For partner organisations to fully understand one another and collaborate effectively, detailed discussions with a wide range of stakeholders are required. Rather than piecemeal engagement with specialist teams, successful partnerships require collaboration across organisations, with representatives from a wide range of teams all contributing to a place-led strategy. Financial institutions can tend to be quite siloed, with different specialist teams working independently from each other – establishing a single point of contact with a mandate to work across these silos would foster collaboration and facilitate more productive partnership.
- Focus needs to shift from targeting investment toward individual sectors to the needs of a place as a whole. The most pressing issues we face, from digital transformation to the transition to Net-Zero, cut across sectors – they cannot be addressed on a compartmentalised, sector-by-sector basis. A joined-up strategy which considers the needs of a place as a whole, across all sectors, is required.
- Government can play a crucial role in deploying incentives for financial institutions and highlighting successful pilots. There is capital within the private sector that is ready to engage responsibly with place-based projects and contribute to solutions for the challenges places face. Government can play a crucial role in supporting this engagement through the deployment of tools and incentives which mitigate risk and crowd-in private sector capital. A range of blended finance approaches are already available to government including loan guarantees, tax credits, credit enhancements or technical assistance.
You can read the full report here and watch a recording of the event below: