Home Finance Latest annual impact report shows mainstream social investment fund supporting the Covid-19 recovery

Latest annual impact report shows mainstream social investment fund supporting the Covid-19 recovery

by jcp
  • Report by The Big Issue Group assesses how well the Threadneedle UK Social Bond Fund has delivered on its impact objective to support more inclusive and sustainable development in the UK
  • Investment highlights include £14 million invested in social bonds aimed at alleviating the negative effects of the pandemic

(Thursday, 24 February) The Big Issue Group has released the seventh Annual Impact Report for the Threadneedle UK Social Bond Fund, as part of the fund’s disclosure to investors. The report assesses the degree to which the investment strategy’s impact objective to support more inclusive and sustainable development in the UK[1] has been achieved.

Launched in 2014 as the UK’s first mainstream, fixed income social investment offering, the fund is a partnership between global asset management firm Columbia Threadneedle Investments and The Big Issue Group, who acts as the social advisor to the fund.

Every year, the report assesses portfolio holdings according to the bonds’ alignment to the Sustainable Development Goals (SDGs) and their social performance rating (high, medium, low) by outcome area and geography. The investment projects’ impact reporting, transparency and relevant impact evidence are also scored using standards such as the Impact Management Project.

The 2021 report shows that overall, the fund held 225 bonds from 121 issuers including charities, registered social housing providers and publicly listed companies in sectors such as health & social care, utilities & the environment, and housing & property. Most bonds (83%) were scored to have a high or medium social performance rating, with nearly 60% favouring regional development outside the Greater Southeast.

The report also shows a new type of bond introduced to the portfolio, with £14 million invested into so-called “pandemic bonds” which aim to finance both the healthcare response to, and wider economic recovery from, the Covid-19 pandemic.

Examples of such bond issuance includes:

  • An $8bn sustainability bond issued by the International Bank of Reconstruction & Development to help member countries expand laboratory capacity, invest in detection equipment, train health workers and resolve supply constraints.
  • A $750m social (vaccine) bond issued by the International Finance Facility for Immunisation for funding to the Global Alliance for Vaccines and Immunisations’ core immunisation programmes and its COVAX Advance Market Commitment scheme, which pools funding to purchase Covid-19 vaccines for participating countries.

Outside of pandemic bonds, last year’s notable investments include Tesco’s first sustainability-linked bond contributing towards its target of reducing Scope 1 and 2 greenhouse gas emissions by 60% by 2025. The growth of such sustainability-linked social bond issuance has been significant over recent years and the report calls for future issuance to consider the intersection of social and environmental impact.

Nigel Kershaw OBE, Chair of The Big Issue Group and co-founder of The Big Exchange, said: “Our aim with this partnership was to bring the mainstream to social investment by giving ordinary people, as well as institutional investors, an opportunity to see their savings and investments do social good. Having grown to just over £408 million in assets under management[2], the fund’s success shows that more and more people want to be able to plan and save for the future while helping to create a more inclusive UK – it’s finance for the people. I am incredibly proud of what the fund has been able to achieve, not only over the last year but over the last seven years.”

Simon Bond, manager of the Threadneedle UK Social Bond Fund, said: “It has been fascinating to watch the quick and efficient bond market response to one of the most pressing social challenges of our time. This has presented our fund’s investors with an opportunity to support an inclusive and sustainable recovery from the Covid-19 pandemic, while at the same time generating returns on their investments. The developments over the last few years also reflect the growth of the ’S’ within Environmental, Social and Governance investment – social bond issuance was up 129% year on year to the end of September. There will be plenty more opportunities to put investments to work for social good, and I look forward to continuing to manage the fund in this way.”

The Annual Impact Report was produced by Big Issue Invest’s Impact team, led by Joshua Meek, Head of Social Impact. Joshua and his team were recently the recipients of the inaugural Pensions for Purpose “Best Impact Report Content Award” for Big Issue Invest’s Impact Report 2020-21.

You can access the Annual Impact Report here.

The Threadneedle UK Social Bond Fund contributes a share of its annual management fee to The Big Issue Group, as well as the Columbia Threadneedle Foundation.

The Big Issue Group

  • The Big Issue is a social enterprise whose mission is to deliver a world that works for everyone. Creating and offering self-help and sustainable business solutions that dismantle poverty now and for future generations
  • The Big Issue is an award-winning weekly entertainment and current affairs magazine, which offers a new hope for homeless and vulnerably housed people across the UK. When vendors are able to sell, they buy magazines for £1.50 and sell to the public for £3, keeping the difference. In this way the magazine provides them with the means to earn a legitimate income.
  • Vendors come from a variety of backgrounds and face a range of issues, but all are experiencing the effects of poverty. Upon becoming a Big Issue vendor, they receive training, are allocated a fixed pitch from which to vend, and must agree to adhere to a code of conduct whilst selling the magazine.
  • Since its launch in 1991, over 200 million copies of The Big Issue magazine have been sold by over 100,000 vulnerable people.
  • In 2021, TBIG supported 3,296 Big Issue vendors to sell 1.65 million copies of The Big Issue Magazine across the UK and earn a collective profit of £2.74 million.
  • For further information please go to www.bigissue.com

About Big Issue Invest:

Founded in 2005, Big Issue Invest, as part of The Big Issue Group, extends the Group’s mission by financing the growth of sustainable social enterprises and social purpose businesses across the UK.

Big Issue Invest (BII) offers social enterprises and social purpose businesses loans and investment from £20,000 to £3.5 million. It manages or advises on £450 million of social funds, including £45 million assets under direct management.

In 2020-2021, BII invested in over 184 organisations across the UK, with 62% of investment in the highest areas of deprivation. Alongside working in areas where it is needed, Big Issue Invest’s clients provide services to over 1.16 million people across the UK and provide jobs for up to 10,000 people and volunteering opportunities for 6,900 people.

https://bigissueinvest.com/

About Columbia Threadneedle Investments

Columbia Threadneedle Investments is a leading global asset manager that provides a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world.

We have more than 2500 people including over 650 investment professionals based in North America, Europe and Asia[3][4]. We manage £557bn / €663bn / US$754bn[5] of assets across equities, fixed income, multi-asset, solutions and alternatives.

Our priority is the investment success of our clients. We know investors want strong and repeatable risk-adjusted returns and we aim to deliver this through an active and consistent investment approach that is team-based, risk-aware and performance-driven. Our investment teams around the world work together to uncover investment insights. By sharing knowledge across asset classes and geographies we generate richer perspectives on global, regional and local investment landscapes. The ability to exchange and debate investment ideas in a collaborative environment enriches our teams’ investment processes to ensure the best insights are applied to portfolios. More importantly it results in better informed decisions for our clients.

Columbia Threadneedle Investments is the global asset management group of Ameriprise Financial, Inc. (NYSE:AMP), a leading US-based financial services provider. As part of Ameriprise, we are supported by a large and well-capitalised diversified financial services firm.

www.columbiathreadneedle.com

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