Place-based impact investments and a 'Green+' Gilt can achieve social co-benefits in the low-carbon transition, Sarah Gordon, chief executive of the Impact Investing Institute, tells Michael Hurley
In October 2020, the Impact Investing Institute, together with the Green Finance Institute and the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science (LSE), published a proposal for the UK to issue a so-called 'Green+' Gilt.
The proposal emphasised "the strategic potential for a green sovereign bond to scale up the UK's drive to a net-zero carbon economy, with well-defined social and economic benefits...and garnered the support of more than with 40 asset owners and investors, representing organisations with assets under management of more than £10 trillion ($13.7 trillion)," Gordon said.
"That shows the breadth of support across the investment community for just transition initiatives," she added.
This call for the UK to ensure the inclusion of a social dimension to any green sovereign issuance came just a few weeks before the UK government went on to announce its intention to issue a maiden green bond in 2021.
In the interview with Environmental Finance, Gordon also outlined research the Impact Investing Institute has done on UK local government pension scheme (LGPS) place-based impact investing, which refers to the local deployment of impact capital.
"[The institute] analysed a range of LGPS place-based investments across the UK and demonstrated that place-focused impact investment delivers a market-competitive financial return.
"Many institutional investors need to be able to deliver that final return alongside a positive impact on people and communities. We feel there is an immense opportunity there. If more LGPS were to do more [place-focused impact investment], you would be talking about mobilising billions of pounds of investment into the places [in the UK] that need it most," she told Environmental Finance.
The full interview with Gordon can be viewed below.
This interview follows a webinar hosted by Environmental Finance on 23 June, 'Just transition and impact'. Click here to watch a recording of the webinar.