Welcome to the 2023 Columbia Threadneedle UK Social Bond Fund Annual Impact Report. In the last year, the Fund has grown to a total of £396 million in assets under management and held 185 bonds from 127 issuers, continuing to invest in issues generating positive social and environmental impact.
The Fund aims to support more inclusive and sustainable development and growth in the UK: inclusive in terms of reaching disadvantaged groups as well as balancing out geographical disparities. This goal is even more pertinent in light of the cost-of-living crisis that has prevailed throughout this year. The 2022 mini budget added to the economic uncertainty that has been felt across the financial markets and people’s lives. Within this challenging context, the Fund has increased the investment allocation to high-impact rated bonds to £170 million.
Since its launch in 2013, the Fund has been investing to address the main areas of social need where social exclusion is particularly evident. It is also these key outcome areas that further contribute to social inequality in the future. The affordable housing and property outcome area is a case in point: with a shortage of social housing, there is vast inequality in access to quality housing in the UK. At the same time, growing rents in the private sector pull low-income households below the poverty line. As such, the investments are assessed in terms of direct outcomes and the potential prevention of future disparity.
The Fund’s social focus means its impact is all about the people affected by socio-economic and environmental issues. Since last year, the Fund’s impact assessment has considered the main groups and communities targeted and experiencing change from its investments.
As part of its engagement, the Fund team has also been encouraging issuers to capture the stories and experiences of those target populations.
The Fund also considers environmental investments from this perspective: for instance, investments in the Utilities and the Environment outcome area are assessed on how they support the disadvantaged communities, customers and employees while striving to achieve their environmental goals, such as reduced pollution or the net zero transition.
Beyond investment, Columbia Threadneedle recognises its role in driving innovation in the sector: it has campaigned for the International Capital Market Association (ICMA) to include people at risk because of climate change and transition projects that cause or exacerbate socio-economic inequity as an additional vulnerable group in the 2023 Social Bond Principles. As part of this broader engagement, CT is a member of the Just Transition Challenge, a flagship initiative by the Impact Investing Institute to mobilise more public and private capital into investments that support a just transition to net zero in the UK and other developed and emerging markets.
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Read in-depth engagement case studies and learn how the portfolio holdings are making the greatest contribution sustainability themes.Â
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