The investment for its newly launched nature and social outcomes strategy takes L&G’s total commitment to the sector to over $1bn.
Legal & General (L&G), a multinational financial services and asset management company headquartered in London, has committed an additional $235m (€218m) to nature conservation and sustainable development in emerging markets through the launch of its nature and social outcomes strategy.
This investment takes L&G’s total commitment to nature conservation and sustainable development in emerging markets to over $1.1bn as it seeks to close the $4trn annual funding gap to meet the UN Sustainable Development Goals.
Other private debt financing for nature conservation and sustainable development in emerging markets includes $465m in debt conversions for nature in Belize, Ecuador, and Gabon; almost $350m in proceeds bonds across Africa and Eastern Europe for critical social infrastructure, social housing, a public university in the Ivory Coast and solar power projects in Senegal, and up to $100m for women-led emerging market infrastructure debt investor ImpactA Global.
“Exposure to emerging markets has the potential to offer attractive returns for investors whilst aiming to support communities and ecosystems which play an indispensable role in upholding economies across the globe,” said Jake Harper, senior investment manager, asset management at L&G.
Using debt financing methods that benefit from credit enhancement through multilateral guarantees and insurance, the strategy plans to invest in projects that can deliver strong commercial returns as well as produce positive nature and social outcomes, L&G said. These could include habitat and biodiversity conservation, as well as socially beneficial infrastructure to support education, healthcare, and access to clean water.
“By leveraging our proven track record and long-standing industry relationships, we believe L&G has distinct access to diverse investment opportunities and is advantageously positioned to shape future transactions in the sector,” Harper said.
L&G, which managed £1.1trn in assets last year, was one of the largest investors in debt conversions for nature issued by the Ecuador government, Impact Investor reported last year. Also referred to as a debt-for-nature swap, this initiative was the first of its kind to support forestry and freshwater conservation. The programme aims to protect 4.6 million hectares of forest and 18,000km of freshwater, as well as benefit indigenous populations and communities in the Ecuadorian Amazon.
L&G uses a proprietary sustainable investment framework to measure the impact and outcomes of its investments for the strategy, it said. In practice, this means individual investments will be measured against key performance indicators that are in sync with the strategy’s key targets. These include inclusive economy; health, wellbeing, and quality of life; and protecting and enhancing nature.
