UK financial services group Legal and General (L&G) announced the launch of its new Nature and Social Outcomes strategy, with a commitment of $235 million (£183 million) aimed at supporting conservation and sustainable development projects in emerging markets (EMs).

The new strategy, the firm said, will deploy capital through projects that will provide strong commercial returns, along with positive environmental and social outcomes.

Projects supported by the new strategy will target habitat and biodiversity conservation, as well as infrastructure to support education, healthcare, and access to clean water. The launch adds to L&G’s existing commitments to sustainable development in EMs, which now total over $1.1 billion (£890 million), the firm said.

Jake Harper, Senior Investment Manager, Asset Management at L&G, said:

“Exposure to emerging markets has the potential to offer attractive returns for investors whilst aiming to support communities and ecosystems which play an indispensable role in upholding economies across the globe. Innovative debt financing allows investors to allocate to nature conservation and sustainable development in EMs whilst benefitting from an improved credit rating and higher returns. By leveraging our proven track record and long-standing industry relationships, we believe L&G has distinct access to diverse investment opportunities and is advantageously positioned to shape future transactions in the sector.”

According to L&G, the new strategy will deploy capital to projects by leveraging innovative financing methods that benefit from credit enhancement through multilateral guarantees and insurance, such as use of proceeds bonds, debt conversion bonds, and outcome bonds. The strategy completed its first direct investment in December 2024, with an investment in Ecuador’s second debt conversion for nature, a project led by the Republic of Ecuador and The Nature Conservancy, supporting forestry and freshwater conservation.

L&G said that it monitors the impact of its investments by measuring key performance indicators aligned with the strategy’s targeted core themes, including inclusive economy; health, wellbeing, and quality of life, and; protecting and enhancing nature. The firm also engages with project stakeholders, including development finance institutions and charities, and the wider industry, on the sustainability commitments and outcomes, governance, and monitoring and reporting requirements.

Jesal Mistry, Head of DC Investments, Asset Management at L&G, said:

“We’re delighted to be launching our Nature and Social Outcomes strategy as an opportunity for DC members to gain exposure to a fast-growing and impactful part of the global debt market. Today’s announcement is a great example of the increasingly diverse range of assets that DC schemes can invest in, combining the need to unlock financing where it is often most needed with the aim of delivering positive returns for members in retirement.”