The UK has launched the Emerging Markets and Developing Economies (EMDE) Investor Taskforce, an industry-led initiative dedicated to unlocking private investment to tackle climate change and seize sustainable growth opportunities.
It is estimated that EMDE markets could contribute approximately 65% of global economic growth by 2035, with investment in both mitigation and adaptation bringing a return of around tenfold by 2100. However, private capital flows into these markets remain far below what is needed to achieve the UN Sustainable Development Goals (SDGs), with only 18% of climate finance in Africa coming from private sources.
Therefore, the Taskforce is set to develop practical solutions such as capacity building and product innovation to overcome barriers that currently constrain long-term private capital from investing at scale into climate, transition and sustainable investment opportunities in regions including Latin America and the Caribbean, South and South East Asia, and Africa.
Unlocking sustainable investments across EMDEs on a greater scale is central to tackling climate-related risks such as extreme heat, drought, flooding and wildfire, the Taskforce said.
Participating organisations include: Aviva Investors, BII, Church of England Pensions Board, HSBC, Legal & General, Lloyds, Nest, Ninety One, People’s Pension, Phoenix Group, Private Infrastructure Development Group (PIDG) and S&P Global Ratings.
Hendrik du Toit, founder and CEO of Ninety One and industry co-chair of the Taskforce, said: “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. 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.
“Accelerating sustainable investment across EMDEs is key to confronting climate risks and enabling durable, inclusive economic growth globally. The newly formed EMDE Investor Taskforce is a vital step forward, offering practical solutions to help UK institutional investors engage with climate, transition and sustainable investment opportunities in these markets. This initiative will play a central role in mobilising capital where it’s needed most and in catalysing broader flows of investment.”
Baroness Chapman (pictured), minister of state for international development, added: “The Taskforce is a great example of how we are modernising our approach to international development. Experts from the UK’s world-leading financial sector will help bring opportunities for investors and help developing economies grow. This is good for those countries and for the UK.
“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.”
