By Mike Emmerich and Eleanor Springer
At Metro Dynamics our mission is to help places, and by working with Lloyds Banking Group and the Impact Investing Institute we have explored an approach with immense potential to do just that. Our new report, Building Stronger Places: A new, impactful role for financial institutions, sets out our findings and the potential for private sector partners to galvanise place-based regeneration.
There is no panacea to promote regeneration and growth in places, but the Levelling Up agenda creates an opportunity to develop new, evidence-informed opportunities. We know that regional development is best served by holistic and co-ordinated intervention, that local intervention is best delivered with local partnership, and that there are real market prospects in places in the UK. Putting those facts together, we identify a meaningful role for financial institutions, including high street banks, in delivering place-based regeneration through intentional impact investment.
The approach, place-based impact investing (PBII), pairs financially viable opportunities with clearly-articulated, positive social and environmental impact to enhance local economic prosperity and resilience. It’s different from ‘business-as-usual’ due to its intentional focus on positive, local impact above and beyond standard transactions. The opportunity can be beneficial to all involved: financial institutions can create new markets for commercially viable investment, while places gain access to previously untapped sources of capital to fund local growth.
We have been fortunate to work with dedicated officers in three local authorities: Birmingham, Leeds and Liverpool. Creating a relationship between the different partners involved, crafting a shared space where ideas flow between them, where trust is forged, and a long-term commitment delivers real social and financial value, is not an easy endeavour. It won’t work for every institution or every place. But where it does, the benefits will be well worth the effort.
There are important roles for Government, financial institutions and places to play in further developing this approach. Activating the potential of PBII to generate financial and social value will require leadership, collaboration and risk-taking. We hope our report is a positive step towards unlocking sources of relationship and financial capital that will generate positive impact in places.
This is just the start of the conversation; we would like to know what you think of the report, and to be a part of the dialogue in cities and towns across the country. Get in touch with us with your thoughts and comments.
Download Annex A: Lessons from the US (paper by RW Ventures LLC)