L&G Invests $235m More in Sustainable Growth in Emerging Markets

The new strategy focuses on supporting projects that protect biodiversity and upgrade infrastructure, like education, healthcare, and clean water access in emerging markets.
Innovative financial tools, including bonds and debt conversions, are used to support these initiatives.

The UK's leading financial service provider, L&G (Legal & General), has invested an additional $235 million in nature conservation and sustainable development in emerging markets ("EMs").

This fresh commitment is part of the company's newly announced Nature and Social Outcomes strategy ("Strategy"), which brings the total investment in sustainability and nature conservation in EMs to over $1.1 billion. The funding comes from L&G’s multi-asset investment products. The goal is to support sustainable development and provide financial returns.

Their new strategy will fill the $4 trillion annual funding gap needed to achieve the UN Sustainable Development Goals. It leverages innovative financing tools, including use-of-proceeds bonds, debt conversion bonds, and outcome bonds. These tools will help the financial provider invest in projects that protect the environment and upgrade social infrastructure. The investment targets biodiversity conservation, education, healthcare, and clean water access.

The company's private debt financing for sustainability projects includes $465 million for marine, forestry, and freshwater conservation in Belize, Ecuador, and Gabon; $350 million for social projects in Africa and Eastern Europe; $100 million for infrastructure projects in EMs; and a $235 million initial investment in the Nature and Social Outcomes strategy.

L&G’s first commitment under this strategy is to Ecuador’s second debt conversion for nature, in association with the Republic of Ecuador and The Nature Conservancy. It aims to safeguard 4.6 million hectares of forest and 18,000 km of freshwater, as well as indigenous peoples and communities.

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Jake Harper, Senior Investment Manager, Asset Management, L&G: “Exposure to EMs 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.

"Innovative debt financing allows investors to allocate to nature conservation and sustainable development in EMs whilst benefitting from an improved credit rating and higher returns.

"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.”

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Source: L&G