This November marks a year since the UK’s Impact Investing Institute was launched.
It’s been a very demanding year for everyone. For some, it has been a tragic one. The pandemic has had a terrible effect on individuals, communities and economies across the globe. But this year has also brought positive developments on which we can build, and which show us how important it is to continue working towards our goal: mobilising private sector capital at scale for public good.
For a start, virtual working has had its upside. I’ve been lucky enough to spend most of this year working from Exmoor, in the south-west of England. As a team, we’ve been able to work more flexibly. And we’ve reached more people.
Our commitment to work across the UK and internationally
When we launched the Institute in Sheffield in November 2019, we committed to being relevant for the whole of the UK and the investment community internationally, not just London, where we were based.
Little did we know that a year later we would be reaching so many people through webinars, Zoom calls, and the panoply of tools which we now use to communicate across the world.
There are other positive things that have happened this year.
Investment in sustainable funds is on the rise
More money has flowed into sustainable investment funds than ever before, showing that people want their money to deliver benefits for people and the planet, as well as a financial return.
Five influential organisations have said they intend to work towards one set of global sustainability standards, making it easier for businesses, investors and individuals to report, compare and manage their impact on people and the planet.
Across the pond, there is the imminent prospect of the US re-engaging with the international community to address the climate emergency.
The power of community action
This year was also the year when social justice and racial equity became a boardroom discussion, when many senior business leaders thought constructively about their responsibilities to society and their impact.
It’s also been a year which has given us a renewed sense of the power of community action. We have experienced the strength of our human connections, and what collaboration can achieve.
Our partnership with other organisations and within the Institute, where volunteers work with paid staff, has delivered concrete results over the last twelve months.
A Green+ Gilt to finance a net-zero future and help create green jobs and skills
Earlier in November, the UK government committed to issuing the first in a series of green gilts, a financial instrument that will direct private capital and government spending towards a net-zero carbon future, helping to create green jobs across the country.
In collaboration with the LSE’s Grantham Research Institute and the Green Finance Institute, we provided input to this decision, showing that there was appetite in the market, from asset owners such as pension funds and asset managers, for sovereign bonds that combine environmental with social impact.
This work was one example of the Impact Investing Institute delivering on what it set out to do, connecting investors with impact investment opportunities and with government, lowering the hurdles that stop impact investment from happening.
Investor innovations that promote a fair economic recovery
This year, the pandemic, like crises before it, has spurred innovation in finance. Investment funds and financing vehicles which will promote a fair economic recovery have been launched by private and public sector investors, working together to make their capital more effective.
- The Resilience and Recovery Loan Fund, run by Social Investment Business, has channelled emergency government money to social investors and enterprises in the UK.
- Blue Orchard Finance’s Covid-19 fund, which combines private capital with money from development finance institutions in the UK, US, Japan and Germany, will support emerging market companies as they fight the consequences of the pandemic.
- The MacArthur and the Ford Foundations issued social bonds in the US corporate bond market for the first time, raising billions of dollars so they could make more emergency grants to struggling communities and charities.
- Big Society Capital and Schroders launched a new UK investment trust which will allow most private investors to access private social impact investments.
- Mobilist, the first step in an ambitious new programme by the Foreign and Commonwealth Development Office, is about to launch a competitive request for proposals from fund managers to identify a listed infrastructure vehicle to deliver new financing for the Sustainable Development Goals.
- Barclays Impact Agora connects accelerators with fund managers and investor networks.
- The Home real estate investment trust is looking to raise £250m to acquire and create a portfolio of homeless accommodation across the UK
Innovation like this, investment by both the private and public sector which addresses inequality, addresses the climate emergency, delivers positive impact alongside a financial return, will make us stronger, delivering more resilient communities, societies and economies.
The pandemic has shown us that crises can hit the whole world almost without warning. It’s been a year when we’ve felt our vulnerability, as individuals, as communities, as countries and as a planet.
Impact investing will help us to ‘Build Back Better’
That recognition has been one of the toughest parts of a tough year, but it has spurred us to action, and given added momentum to our work. Impact investment helps us build a stronger, fairer, cleaner world, and we’re looking forward to another year of reaching more people with that message and making sure it is heard.