The Impact Investing Institute welcomes the publication of the landmark Levelling Up White Paper and the ambitious, new approach it sets out, designed to re-focus Government spending on tackling place-based inequalities.
Sarah Gordon, Chief Executive of the Impact Investing Institute says:
“While the publication of this white paper marks an important step forward, there is an urgent need for transformational investment that tackles regional inequalities and improves people’s lives.
“We believe that responsible private investment in underserved places – place-based impact investing – will have a critical role to play in delivering the Levelling Up agenda and fulfilling the ambitious aims of this white paper. The leveraging of private capital across policy areas and sectors will be an essential part of achieving these ambitions and we hope that Government will play a decisive role in facilitating this. They can do so by using public investment to catalyse institutional investment in historically under-served regions of the UK and supporting local authorities to engage with institutional capital. We look forward to working closely with both the government and the market to achieve this.”
The Institute particularly welcomes the white paper’s announcement of a new 5% target for local investment by council pension schemes. This step has been a central recommendation of our Place-Based Impact Investing programme since its inception and was a key call to action from our 2021 white paper, “Scaling up institutional investment for place-based impact”, delivered in partnership with The Good Economy and Pensions for Purpose and supported by the Department for Digital, Culture, Media and Sport, the City of London Corporation and Big Society Capital.
“This move will make it easier for pension schemes to consider the real opportunities presented by investing for impact in UK towns, cities and regions. By putting their investments to work to address local challenges, pension schemes can achieve appropriate risk adjusted financial returns that are compatible with their fiduciary duty while enhancing local resilience and improving people’s lives. Through our place-based impact investing approach, and the extensive work we have done on pensions with impact, the Impact Investing Institute stands ready to support both the government and individual pension schemes to ensure this target is met and real positive impact is delivered,” says Sarah Gordon.
Sarah Forster, CEO and Co-Founder of The Good Economy, says:
“We believe that place-based impact investing is an investment paradigm whose time has come. It can provide the financial innovation needed to level-up the UK at the scale that is necessary.”
Anna Shiel, Head of Origination at Big Society Capital, says:
“We are delighted to see a new target for council pension funds in England to invest at least 5 per cent of their £337bn of combined assets on local areas. Over the past decade we have seen first-hand how connecting private capital to the places that most need it has the potential to reverse the social inequality that is limiting horizons, and which harms our economy. We have seen pension funds increasingly supporting social impact in recent years – tackling a wide range of issues including homelessness and education. We look forward to seeing how the new target will further this trajectory.”
Charlotte O’Leary, CEO of Pensions for Purpose, says:
“At no time has there been a greater impetus for getting investment into regions around the UK, bringing the economic, social and environmental agendas together. What we have lacked is a concerted effort by central government, local authorities, investors, asset managers and supply of on-the-ground opportunities. This white paper paves the way for LGPS to consider the considerable benefits of investing with a place-based lens and comes at the same time as the investment industry is itself recognising the significant opportunities associated with positive social and environmental impact investing.”
The white paper’s emphasis on devolution, and pledge to empower local regions, is also a positive step forward.
“For regional regeneration to be successful, the voices of the local community must be placed at the heart of all discussions about regeneration. Local knowledge and lived experience are best placed to understand the challenges faced and the opportunities that can be accessed. We hope that government fulfils its pledge to empower the UK’s regions by granting each of the new mayors the power to make independent decisions through a place-based lens,” says Sarah Gordon.
In November 2021, the Impact Investing Institute released “Building Strong Places: a new, impactful role for financial institutions”, a new report written with Metro Dynamics for Lloyds Banking Group. As well as exploring the role mainstream financial institutions can play in place-based impact investing, the report contained a series of recommendations to government to facilitate a place-based agenda.
In May 2021, the Impact Investing Institute, Pensions for Purpose and The Good Economy published a joint white paper, “Scaling up institutional investment for place-based impact”, which set out the case for institutional investors, in particular pension funds, to adopt a “place-based lens.”
On place-based impact investing
Place-based impact investments are “investments made with the intention to yield appropriate risk-adjusted financial returns as well as positive local impact, with a focus on addressing the needs of specific places to enhance local economic resilience, prosperity and sustainable development.” For more information about place-based impact investing, visit our dedicated projects page.
For media enquiries please contact George Salmon via [email protected] or call 02045228704.