UK-based financial services giant Legal & General (L&G) is expanding its impact investment footprint with the launch of a $235 million (£183 million) Nature and Social Outcomes strategy, aimed at funding conservation and sustainable development projects in emerging markets (EMs).
The initiative is designed to deliver strong commercial returns while supporting biodiversity, climate resilience, and social infrastructure. L&G’s commitment adds to its existing sustainable development investments in EMs, which now exceed $1.1 billion (£890 million).
Investing in Conservation, Communities, and Sustainability
L&G’s new strategy will direct capital towards projects focused on:
- Habitat and biodiversity conservation
- Infrastructure for education, healthcare, and clean water access
- Innovative financing models for sustainability
The firm’s approach leverages credit-enhanced financing methods, including use-of-proceeds bonds, debt conversion bonds, and outcome-based bonds. These mechanisms enable investors to gain exposure to nature conservation while securing stronger credit ratings and higher returns.
A New Model for Financing Sustainable Growth
L&G completed its first investment under the strategy in December 2024, backing Ecuador’s second debt conversion for nature. The project—led by the Republic of Ecuador and The Nature Conservancy—is focused on forestry and freshwater conservation, showcasing how financial markets can drive environmental and social benefits.
Jake Harper, Senior Investment Manager, Asset Management at L&G, highlighted the strategy’s dual benefits:
“Exposure to emerging markets offers attractive returns while supporting communities and ecosystems that are vital to the global economy. By leveraging our expertise and industry relationships, we are well-positioned to shape future transactions in this space.”
Tracking Impact and Accountability
L&G has committed to rigorous impact measurement and governance for the strategy, aligning with key performance indicators (KPIs) across three core themes:
- Building an inclusive economy
- Enhancing health, wellbeing, and quality of life
- Protecting and restoring nature
The company will collaborate with development finance institutions, charities, and industry stakeholders to ensure transparency, sustainability, and measurable outcomes.
Jesal Mistry, Head of DC Investments, Asset Management at L&G, emphasized the growing role of sustainable debt markets:
“This strategy offers defined contribution (DC) members access to a fast-growing and impactful segment of global debt markets. It unlocks financing where it’s most needed while aiming to deliver positive returns for members in retirement.”
With institutional investors increasingly seeking opportunities that align financial returns with environmental and social impact, L&G’s latest move signals a broader shift in how capital markets are supporting sustainable growth in emerging economies.
