Mobilising institutional capital towards the SDGs and a Just Transition

Published on
13th December 2021

In partnership with the Global Steering Group for Impact Investment (GSG), we co-led the G7 Impact Taskforce, an independent, industry-led effort backed by the UK Government as part of the UK presidency of the G7 in 2021. Workstream B, the Workstream led by the Impact Investing Institute, had a particular focus on identifying concrete instruments and policies for financing the Sustainable Development Goals (SDGs) and a transition to a Net Zero world in which no one is left behind.

Based on engagement with 170 influential stakeholders representing over 110 organisations based in almost 40 countries, the Workstream’s report found that:

  • The current momentum behind the movement of capital towards impact must be accelerated if we are to achieve a Just Transition. Demand to invest for impact is growing; pledges are plentiful but actual deployment of capital is still too slow. The challenge remains to mobilise more ‘traditional’ capital in a manner that respects the responsibilities of asset owners and managers towards their clients.
  • Allocations to strategies with integrated environmental and social objectives not only mitigate risks but also expand the potential for positive financial returns. However, we also need solutions that reach beyond the investment frontiers of private capital working alone. The answer is to combine multiple sources of finance – from governments, multinational development agencies, philanthropists, and the private sector – together with multiple financial instruments. The report highlights examples of tested tools that are already being applied to blend capital, the use of which must be expanded. 
  • While climate finance has galvanised attention, a growing consensus is emerging that a single focus on environmental issues is insufficient and that addressing the socio-economic consequences of climate change will be essential to achieving Net Zero. An approach based on the principles of a Just Transition, focusing on our planet and its people, is therefore needed. The report introduces global integrated Just Transition Elements: Climate and Environmental Action; Socio-economic Distribution and Equity; and Community Voice. Together, these Elements ensure that capital meaningfully contributes towards a resilient and sustainable Just Transition to a Net Zero world. 

The report provides concrete and actionable recommendations for G7 policy makers, other national policy makers and regulators, institutional asset owners, multilateral development banks and development finance institutions, asset managers, impact investors, advisors and ecosystem builders. The report’s recommendations will enable these actors to work together to: 

  • Mobilise institutional capital from the full range of private and quasi-public institutional actors, in pursuit of positive impact and advancing the SDGs by increasing the use of proven instruments and tools that can address real barriers for private capital participation and encouraging more private sector capital to flow to emerging markets. 
  • Break down silos between climate-first and social-first strategies and transactions and strengthen the participation of local Community Voice to advance a Just Transition. 

The report also includes a full set of examples and case studies across asset classes that demonstrate how existing and future vehicles can pursue bold environmental and social impact while being attractive to institutional investors.

You can download both the full report and the summary report at the links below.

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File published on 13th December 2021

Additional files

Download summary report

File published on 1st December 2021