Institutional Asset Manager news update - "Social and financial welfare in focus as paradigm shift takes place in finance industry"

Social and financial welfare in focus as paradigm shift takes place in finance industry

Governments across Europe are hand-wringing over whether to impose further national lockdowns, as France and Germany both opt for tighter restrictions to curb a second wave of coronavirus cases.
Pressure is now mounting on the UK, which has suffered the highest number of coronavirus deaths in Europe, to follow suit. Prime Minister Boris Johnson has so far resisted a second national lockdown over concerns about the financial strain that would be caused by shuttering the economy for a second time in six months, with Housing Minister Robert Jenrick saying it would do “more harm than good”.
Aligning social and financial welfare is at the heart of Big Society Capital’s purpose, a firm that has helped the UK’s social impact investing market grow six-fold in the eight years since it was founded.
This is evidence of a structural change taking place in finance, says its chairman Sir Harvey McGrath, who believes that it is crucial to unlock private capital to tackle big issues such as homelessness, climate change, and worldwide pandemics.
Scientists have also discovered that taking steps to protect the environment could help prevent future pandemics, with habitat destruction identified by The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services as a key factor in helping viruses spread from wildlife to humans.
So far, almost all of the largest hubs for green finance have been concentrated within Western Europe, as a biannual index showed that Amsterdam, Zurich, and London are leading the way towards financing a sustainable future.
In the US, candidates Donald Trump and Democratic rival Joe Biden are busy rallying their supporters in the battleground state of Florida ahead of next Tuesday’s US Presidential election. FiveThirtyEight polls put Biden ahead with an 88 per cent chance of victory over Donald Trump.
Fixed income managers say that a Biden victory may help soften the blow to US municipal bond issuers, whose credit ratings are on course for a series of downgrades over the next couple of years.
Biden’s talk of federal aid, higher taxes, and a USD2 trillion plan to green the economy, could all help local governments to reduce their budget deficits, which are expected to hit USD445 billion next year.

Madeleine Taylor
Editor, Institutional Asset Manager

[email protected]

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