Briefings, Reports

UK Infrastructure Bank investment principles

Laying the foundations for long term success

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London Skyscraper Willis Building Mirroring Lloyds. Photo by jplenio on Pixabay.

The Spring Framework for the new UK Infrastructure Bank must set the right investment principles now for long term success.  Levelling up in the long term will not be possible without investment in sustainable jobs and future-proofed infrastructure.

The Bank must create an investment strategy that implements net zero as an investment screen and sets the minimum standards and benchmarks required to deliver the patient capital to the right people, projects, and places and spark a sustainable and inclusive recovery across the whole of the UK.

This latest briefing from E3G builds on the work of the recommendations set out in a previous E3G letter and supporting design briefing which identified the four key design objectives of key importance to creating a successful UK Infrastructure Bank relating to Governance, Capitalisation, Mission and Future-fit definition of infrastructure.

This Investment Principles Briefing was written with input from several other organisations spanning business, investment, academia and civil society. It sets out recommendations for the four key investment principles which should guide the development of the UKIB’s investment strategy as follows:

  1. Mission Driven Institution
  2. Future Fit Definition of Infrastructure
  3. Clear and Firm Investment Criteria
  4. Commitment to Transparent and Robust Impact Assessment

It then proposes underpinning benchmarks to help ensure that these principles are successfully applied and support the Bank in delivering capital for a sustainable recovery across the whole of the UK.

Clearly, the delivery of the investment strategy must be supported with solid operational principles including the bank investing to be additional, and building trust amongst the people, projects and places it will impact. We hope to see an intention in the Spring Framework for the bank, and its missions, to be set up in legislation with a commitment to increase capitalisation over time.

Only then will the bank be able to crowd-in capital at scale for projects in support of both net zero, levelling up, and resilience – essential to spark a fair, just, and green industrial revolution across the whole of the UK.

Contributors

The authors would like to thank the following contributors for their input and review:

Nick Molho, Chief Executive, Aldersgate Group

Dimitri Zenghelis, Special Advisor, Bennett Institute for Public Policy, University of Cambridge and Senior Visiting Fellow, Grantham Research Institute, London School of Economics.

Dr Andy Kerr, UK and Ireland lead, EIT Climate-KIC and Honorary Professor of Climate and Low Carbon Innovation, University of Edinburgh

Alice Bordini Staden, Managing Director, GLC Advisors Ltd. 

Nick Robins, Professor in Practice- Sustainable Finance, and Sabrina Muller, Policy Analyst, Grantham Research Institute, London School of Economics

Ingrid Holmes, Executive Director and Ryan Jude, Associate, Green Finance Institute

Emelia Holdaway, Policy Programme Director, Institutional Investors Group on Climate Change

Mareike Schmidt, Innovation Lead, Innovate UK

Sarah Gordon, CEO, Impact Investing Institute

James Cameron

Gavin Templeton, Partner, Pollination

Kate Bell, Head of Rights, International, Social and Economics, Trades Union Congress

James Alexander, CEO, UK Sustainable Investors Forum

Charles Abel Smith, UK100

Read the briefing in full here.

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