UK launches new emerging markets investor taskforce
The UK's Foreign Office and Treasury have teamed up with private investors launching a new taskforce to attract more private investment into emerging markets, members include pension funds, insurers and asset managers
Capital inflows into climate solutions in developing economies are below target. They have been for a few years now. Recent estimates of the financing gap suggest a $1.8trn annual shortfall. The private sector’s contributions in some regions have dwindled too. Just 18% of Africa’s climate finance is attributable to private sector capital.
In a bid to address the issue, the UK’s Foreign, Commonwealth and Development Office (FCDO) as well as HM Treasury have announced a new Emerging Markets and Developing Economies (EMDE) Investor Taskforce.
The taskforce will bring together 15 financial sector institutions including pension funds, insurance companies, asset managers banks and development finance institutions in addition to investment consultants.
The task
The taskforce is tasked with catalysing long-term climate capital flows into developing economies across Latin America, South and Southeast Asia and Africa.
“These emerging markets are the UK’s economic partners of the future. That’s why it’s so important we get UK private finance for climate and development projects in these countries, which we expect to contribute 65% of global economic growth by 2035”, said Baroness Chapman – the UK’s minister of state for international development.
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“Momentum is building for the energy transition in emerging markets and developing economies. While real risks exist, they are often overstated compared to historical outcomes”, commented Henrdrik du Toit, founder and chief executive of Ninety One – an asset manager – who will also co-chair the taskforce.
“To date, institutional investment in EMDEs has largely focused on public equities and sovereign debt. However, achieving a just and effective energy transition requires a significant increase in private equity, private debt, project finance, and corporate capital in emerging markets”, he adds.
Structure
The Institutional Investors Group on Climate Change (IIGCC) will serve as the secretariat.
“IIGCC is proud to serve as the secretariat for the taskforce. The work it will undertake aligns with our ambition to support investment into climate, transition, and sustainable opportunities across emerging markets”, said IIGCC chief executive officer Stephanie Pfeifer.
In addition to Ninety One, the taskforce membership also includes Aviva Investors, Phoenix Group, Legal & General, HSBC, Lloyds, Private infrastructure Development Group and S&P Global Ratings.
Asset owners are also part of the initiative. So far, the Church of England Pensions Board, Nest and People’s Pension have signed up.
