Inertia a Barrier to Impact

The case for allocating to social investment solutions has never been clearer and relevant, according to Big Issue Invest Chair Mark Porter.

The 2024 Joseph Rowntree Foundation poverty survey tells us that 14.4 million people are in poverty in the UK. That’s approximately 22% of the population, a level roughly 50% higher than much of the 1970s. This is more prevalent still in children, with approximately 29% of under 18s suffer from poverty. In single parent families, this is over 40%.

Big Issue Invest seeks to develop investment solutions for institutions which can help alleviate this domestic crisis. Objectively, traditional mainstream investment allocation strategies that prioritise overseas assets cannot tackle UK social issues. Even UK business and investment opportunities in aggregate do little to help tackle UK poverty.

The social impact funds which Big Issue Invest runs directly invest in UK-based businesses and enterprises which tackle the causes of poverty and provide solutions to it. Our investments include one in healthcare services in Cornwall, an idyllic destination for millions of tourists, but also a permanent home to remote and underserved communities.

An investment of £1 million has allowed Smile Together, an employee-owned social enterprise by the Cornish, for the Cornish, to expand their high quality dental services to people who would otherwise have poor or no dental provision. That about sums up Big Issue Invest – investments that help people smile.

Break down the barriers

Big Issue Invest recently hosted asset owners at the House of Lords for Pension and Insurance Spring 2024 social investment event, several weeks before the General Election was called.

This was part of our efforts to provide insurance and pension fund allocators with a blueprint for how to invest in social impact to contribute to better outcomes on UK social issues. The recent first close of Big Issue Invest’s £75m social impact debt fund has provided the framework with targeted intentional impact that institutional asset allocators have been able to subscribe to. The fund seeks to generate positive impact within specific social impact sectors, such as affordable housing and health, whilst also delivering a sufficiently compelling financial return.

While asset owners increasingly understand the importance of social impact investment, they need to break away from the inertia of traditional allocation frameworks in respect of impact and fiduciary duty in the 21st century.

At the social investment event, we heard from senior investment professionals at two global

UK Climate Failure “Chills” Investor Confidence

Whoever wins July’s general election will need to prioritise climate ambition and provide clear policy signals for investors.

With the UK High Court having now dubbed the government’s net zero strategy unlawful for the second time, the country is now considered a climate laggard, leaving sustainability-conscious investors rudderless.   The decision has been interpreted by many as yet another setback for the government’s credibility on climate change.  “[The…

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Take Five: Coal in the Whole

A selection of the major stories impacting ESG investors, in five easy pieces. 

This week’s G7 commitment on coal will have insufficient impact without a global response.

Coal in the whole – The Group of Seven committed to phasing out unabated coal by 2035, but was criticised for allowing continued use of the fuel in power plants that deploy carbon capture technology, as well as for the flexible deadlines it gave to Japan and Germany. The announcement came in response to the COP28 pledge for all parties to transition away from fossil fuel usage. G7 countries said they would submit nationally determined contributions (NDCs) that “demonstrate progression and the highest possible ambition”, including 2030 targets and demonstrating alignment with net zero by 2050 goals. But the Turin communiqué offered precious little detail on the elimination of oil and gas from the energy systems of G7 countries. There has been some action at the individual country level, admittedly, with the US Environmental Protection Agency last week outlining requirements for coal and gas-fuelled plants to capture 90% of emissions, among other measures. While the G7 stressed its adherence to the International Energy Agency’s Net Zero by 2050 scenario, members are not fully aligned with its ban on new oil and gas exploration or development. G7 environment ministers also encouraged other countries to follow their lead on NDCs, and stressed their continued support for Just Energy Transition Partnerships. Given the latter are focused on effecting the clean energy transition of intensive coal users such as South Africa and Indonesia, it is likely that getting these stalled decommissioning initiatives back on track will have more impact on the decarbonisation trajectory than the domestic actions of leading economies. China, it should be noted, added the most coal capacity last year, followed by Indonesia and India.

Plastic progress? – The fourth round of UN-sponsored negotiations on the Global Plastics Treaty were hampered by an inability to agree on all-important production cuts. As a result, “intersessional work” will be needed if a final draft text is to be ready ahead of the last planned round of discussions in Busan in November. Most progress was made on developing a global approach to extended producer responsibility, but reports suggested developed countries fought shy of committing to binding targets for lower production levels. Prior to the talks, 160 financial institutions called for binding rules and obligations to address plastics’