Our goal

We are producing an evidence base for institutional investors of impact investments across asset classes and geographies. UK pension funds in particular, are increasingly adopting sustainable responsible and impact investing practices, reflecting the desire of members for their pensions to be sustainable and reflect their values. We want to make it easier for pension schemes to identify and embrace impact investment opportunities. As well as UK-specific asset classes and broader opportunities outside the UK, we have also produced evidence to help investors consider impact investments in emerging and frontier markets. 

What we are doing to achieve it

We developed a set of case studies of impact investments in emerging and frontier markets made by institutional investors including pension funds, providing concrete examples of impact investments that meet the specific needs of UK institutional investors.

The case studies were developed in partnership with Dalberg Advisors and with support from the Foreign, Commonwealth and Development Office’s IMPACT Programme and cover multiple asset classes, themes and geographies, including emerging and frontier markets in Africa, Asia and other global regions. They are accompanied by asset class profiles, which summarise key asset class trends and opportunities in emerging and frontier markets from the perspective of institutional investors.

Our evidence shows, most importantly, that significant and measurable impact can be achieved while delivering a risk-adjusted financial return that is suitable for pension funds.

The case studies also show:

  • Contrary to a prevailing misconception, pension funds can and do make impact investments in emerging and frontier markets. More and more pension funds are integrating emerging markets impact investments into diversified global investment portfolios. This includes pension funds based in Europe and in countries such as the US, Canada and Japan.
  • There are diverse impact investment opportunities available to pension fund investors in emerging and frontier markets. Pension funds invest in both public and private markets, across different asset classes, thematic areas, geographies and expectations in terms of financial returns and environmental and social impact.
  • Impact investing opportunities in emerging and frontier markets are becoming more innovative and sophisticated with the increasing need and opportunity to attract more institutional capital. Asset managers and intermediaries are developing innovative solutions to address the most common concerns of institutional investors, for example around currency, liquidity or ticket sizes, that may prevent them from investing in emerging and frontier markets. Partnerships between private and public investors in the market are important and include the key role that can be played by development finance institutions and multi-lateral development banks in providing investment opportunities with conditions suitable for pension fund investors.

In the coming months, we will engage with UK pension funds around the case studies and broader opportunities for impact investing in emerging and frontier markets and support them in embracing those opportunities. If you are a pension fund trustee, consultant, member of an in-house investment team, or an investment manager interested in finding out more, please contact us at pensions@impactinvest.org.uk.

Watch our case study launch event

Impact Investing in Emerging Markets: The Opportunities for Institutional Investors

Click here to view

Case studies

The African Development Bank Group Social Bonds programme finances projects with a measurable, positive social impact. The EUR 7-year Social Bond is part of the programme, which includes five social bonds totalling around USD 5.3 billion and was launched in 2017.

The Masala Green Bond is a public Indian rupee offering
listed on the London Stock Exchange offered by the World Bank Group’s International Finance Corporation.

The Emerging Markets Sustainable Impact Fund is a public equity accumulating sub-fund under Nomura Ireland plc. The fund is an actively managed portfolio of emerging market equities launched in March 2020, investing in companies contributing to the 17 Sustainable Development Goals.

Publications

In our first impact report for 2019-20, we are reflecting on our achievements of our first year and are looking ahead to how we can work towards our goal of improving people’s lives, as more capital contributes to addressing social and environmental challenges.

The fifth session of the Institute’s Knowledge Exchange Series explored how National Advisory Boards (NABs) on impact investing and other market-building organisations can build up the skills, knowledge and capacities on impact investing of key local stakeholders, including investors and policy-makers.

The forth session of the Knowledge Exchange Series continued to explore the role of impact investing National Advisory Boards (NABs) as market navigators. This session focussed on how NABs can effectively engage with and support demand-side impact actors including enterprises.

News & Views

The Impact Taskforce, established under the UK’s 2021 presidency of the G7, is pleased to announce the group’s members.

The new Taskforce is composed of global leaders from the world of business, public policy, and the social sector, including senior figures from BlackRock, Temasek, Schroders, Mahindra Group, Morgan Stanley, S&P Global, BASF, the World Bank, the International Monetary Fund and the European Commission.

UK creates Impact Taskforce under its G7 presidency led by the Global Steering Group for Impact Investment and the UK’s Impact Investing Institute. The new initiative will focus on fostering and facilitating discussions and recommendations around impact transparency, integrity, and trust. The Taskforce will also investigate ways to create financial vehicles that can deliver investments for the benefit of people and the planet worldwide. In doing so, it will actively look to advance impact investment in low- and middle-income countries hit hard by the pandemic.

Building back better after the coronavirus pandemic is a global effort. That is why, the Institute launched a Knowledge Exchange Series in 2020. The virtual roundtable events bring together the local organisations that underpin the global impact investing architecture – the National Advisory Boards (NABs) on impact investing.

Events

What are the social impacts of the transition to a net-zero world? How can we mobilise private sector capital to deliver a Just Transition? Can impact investing be a key enabler in achieving the UN Sustainable Development Goals?

Join the Impact Investing Institute and International Chamber of Commerce on Wednesday, 8th September 14:00-16:00 BST, as we bring together key voices to discuss the importance of financing a global Just Transition.

This webinar launched our new set of case studies of impact investments in emerging and frontier markets made by institutional investors, including pension funds.

New research out now

White Paper: Scaling up institutional investment for place-based impact

Our joint white paper “Scaling up institutional investment for place-based impact,” based on the collaborative “Place-Based Impact Investing Project (PBII)” by the Impact Investing Institute, The Good Economy and Pensions for Purpose, sets out the case for institutional investors to adopt a “place-based lens.”