Impact Investors Announce Just Transition Label

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    Stockholm (NordSIP) – With just over 100 days to go until COP27 in Egypt in November, and amid a perfect storm of geopolitical and economic disruptions, addressing climate change and its effects in a fair and inclusive way remains on the top of policy-makers’ agendas.

    To address, some of these concerns, the City of London Corporation, the Impact Investing Institute (III) and KPMG, hosted the Finance for Impact Summit, on July 18th. The Summit sought to scale finance for impact, focusing on raising the prominence of the Social factor in ESG to mobilise more public and private capital to grow investments that support a fair and inclusive transition to Net Zero in the UK and abroad.

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    “Every financial decision we make has an impact. But right now, not every impact is positive – from a social or environmental perspective. Addressing this is what the Finance for Impact Initiative is all about. Scaling financial market activity that delivers positive, measurable impact alongside financial returns. We want to encourage genuine and effective investor engagement, in turn ensuring better impact as that capital is deployed,” says Lord Mayor of the City of London, Vincent Keaveny.

    At the event, 18 organisations with £3.6 trillion in assets under management, announced the launch of the Just Transition Finance Challenge, which will present a common set of criteria that will underpin a new Just Transition Label for financial assets. The Label will recognise investment products that deliver three critical elements of a Just Transition: namely climate and environmental action; socioeconomic equity and distribution; and community voice. The Challenge will open a public consultation in the summer on the Just Transition Label. The first range of investment products, across major asset classes and developed and emerging markets, is expected to be announced later this year.

    “Governments alone will not be able to finance a sustainable and equitable future. The financial services industry has a very important role to play in mobilising more investment towards this future, in collaboration with development finance institutions and other public and private capital providers,” Dame Elizabeth Corley, Chair of the Impact Investing Institute adds.

    Founding Participants in the Just Transition Challenge include Astarte Capital Partners; BlueOrchard Finance; BNY Mellon Investment Management; Bridges Fund Management; British International Investment (BII); Courageous Capital Advisors; the Environment Agency Pension Fund; Fidelity International; FSD Africa Investments; Gresham House; IMPACT Partners; Just Climate; LeapFrog Investments; NEST; Ninety One; Railpen; Scottish Widows; and Schroders. The London School of Economics’ Grantham Research Institute joins the Challenge as a Knowledge Partner.

    “We need a far greater focus on the importance of a just transition: one that is fair to all. Schroders is proud to be a founding member of the Just Transition Finance Challenge. Our industry has a role to play in helping to ensure the benefits of decarbonisation are felt as equally as possible. Initiatives like Finance for Impact and the Just Transition Finance Challenge are key to achieving this,” says Peter Harrison, Group CEO of Schroders.

    KPMG also presented an industry-led set of recommendations for scaling finance for social impact at the Finance for Impact Summit. The recommendations are the result of a consultation that included over 70 banking, wealth and asset management, insurance and pensions, and private equity firms.

    “There is clear appetite and momentum within the financial services sector to accelerate the delivery of products and services that have a positive impact on society. These industry-led recommendations provide an opportunity to galvanize behind the momentum and drive further progress. The sector plays a key role in delivering social impact, not least in driving greater financial inclusion,” Bina Mehta, Chair of KPMG UK, concludes.

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