Our Goal

The world needs capital at scale to achieve the United Nations’ Sustainable Development Goals (SDGs) and a transition to a world of Net Zero carbon that is inclusive and socially beneficial – in other words, a Just Transition. The need for capital is particularly acute in low-income communities and developing countries, for whom existing funding gaps were further exacerbated by the Covid-19 pandemic.

All actors in financial markets need to work together to direct more of the $154 trillion that are professionally managed towards tackling the world’s most urgent environmental and social challenges.

Our goal is to mobilise institutional investors and other market actors to unlock the capital needed to finance a Just Transition, in the UK and globally.

What we are doing to achieve it

We have launched the Just Transition Finance Challenge, a flagship initiative to mobilise more public and private capital into investments that support a Just Transition to Net Zero globally, with the support of the City of London Corporation. The Challenge brings together leading global financial institutions with over £3.6tn of assets and assets under management, including public and private asset owners, asset managers, development finance institutions and advisors, who are committed to financing a Just Transition. With support from Deloitte and Challenge participants, we are currently developing a set of criteria to underpin a new Just Transition label for investment products.

The Challenge builds upon the findings and recommendations of the G7 Impact Taskforce. The Taskforce was an industry-led initiative backed by the UK’s 2021 presidency of the G7, which we co-led with the Global Steering Group for impact investment (GSG). As part of the Taskforce, we delivered a report identifying policies and instruments to mobilise private capital at the scale needed to finance a global Just Transition.

Based on engagement with 170 finance, policy and thought leaders representing 110 institutions in 38 countries, the Taskforce’s report outlined concrete tools for investors to accelerate a transition to Net Zero that is inclusive and socially beneficial, particularly in low-income communities and those in the Global South.

To give all actors a clear and shared understanding as to what constitutes a Just Transition, the Impact Taskforce identified three critical Elements of a Just Transition, applicable across all geographies, sectors, policies and investments. To be aligned with a Just Transition, actions should:

  1. Advance climate and environmental action
  2. AND improve socio-economic distribution and equity
  3. AND increase community voice

The Taskforce also put forward a Blueprint to support the integration of the Just Transition Elements in the design of finance vehicles across asset classes and a series of case studies of existing financing vehicles that integrate a Just Transition approach while being attractive to institutional investors. We have also developed targeted summaries of the key findings and actions for key actors – including asset owners, asset managers and policy makers.

You can learn more about you can do to mobilise more finance towards a Just Transition here.

Read the Impact Taskforce’s report on mobilising institutional capital for the SDGs and a Just Transition.

View here

Find out more about the Just Transition Finance Challenge

View here

Summaries of key findings and actions are available for:

Case studies of Just Transition financing instruments across asset classes

We are currently leading targeted engagement with identified audience groups who have a role to play in mobilising institutional capital towards achieving the SDGs and the Just Transition. If you would like to be involved in this engagement, contact [email protected].

Case studies

Energy 4 is Actis’ fourth energy-focused private equity fund investing in electricity generation (buy and build) and distribution businesses (buy and improve) in select countries across Latin America, Africa and Asia. The fund invests across renewables (wind, solar and hydro) and gas technologies.

Ninety One Africa Credit Opportunities Fund 2 (ACO 2) is a senior private credit fund investing in market dominant companies in African financial inclusion, infrastructure and telecoms sectors.

The fund targets the development of the African Debt Capital Markets (DCM) by creating an alternative asset class, crowding in African pension funds.

BlueOrchard’s Schroder International Selection Fund Emerging Markets Climate Bond Fund (CBF) launched in Q2 2021 with seed capital of $75 million. The UCITS fund purchases mainly green bonds, as well as sustainability bonds, sustainability-linked bonds and general bonds aligned to climate action.

Publications

At the Impact Investing Institute, we aim to transform capital markets to make them fairer and work better for people and the planet. In this, our second impact report, we reflect on the achievements we have made so far and look ahead, outlining our priorities for the future.

In May 2022, BEIS, DEFRA and HMT published a call for evidence ahead of the UK government’s update to its Green Finance Strategy, expected later…

Reducing and absorbing carbon emissions at the speed and scale needed to safeguard our planet requires vast amounts of capital. At the same time a global consensus is emerging that to be sustained and successful, this transition needs to be socially inclusive. Capital will need to be invested in ways that support a Just Transition towards a Net Zero world that is fair and beneficial for all – including the delivery of the United Nations’ Sustainable Development Goals (SDGs).

News & Views

Fifteen years ago, An Inconvenient Truth sent a wake-up call to the world. The documentary featured Al Gore, former US vice-president, and shone a light on the climate crisis facing the planet. It had a huge effect on public awareness of global warming and helped spur the surge in sustainable investing, and what might be called the “ESG industry” as it exists today.

Today the City of London Corporation will host the Finance for Impact Summit alongside its partners the Impact Investing Institute (III) and KPMG, at which financial services firms with more than £3.6 trillion of assets and assets under management will announce their participation in a Just Transition Finance Challenge. Also launched during the event will be a new industry-led set of recommendations for scaling finance that delivers positive and measurable impact across the financial services sector.

We warmly welcome HM Treasury’s launch of the UK Transition Plan Taskforce and look forward to working as part of the Taskforce’s Delivery Group to develop the gold standard for UK companies’ climate transition plans. 

Events

The Finance for Impact Summit on Monday, 18 July 2022 will bring together leaders of finance, business, governments and other institutions from around the world to discuss how we can better harness finance for the good of people and the planet. This one-day event will be held in person at Mansion House in London, and streamed live to a global audience.

Research by MOBILIST and Intellidex has highlighted a growing tension between ESG investment strategies and flows to emerging and frontier markets. While…

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