Market News

11 Nov Market News

Media reports last week outlined the current undertaking by the UK’s PRA to engage with insurance firms in order to understand how they are valuing potential risks of environmental change. The reports indicate that the PRA is not simply addressing the risks of environmental change on insurance policies themselves, but also with respect to investments made in environmentally exposed companies, such as oil companies. This is an exceptional step, indicating the regulators interest in the potential future value of such companies given their negative environmental impact.
Also in the news recently is the most recent report by Bridges Ventures, published in partnership with Bank of America Merrill Lynch. The report addresses the potential uses of Social Impact Bonds and asserts that they should not simply be considered in the context of cost savings. Those of our members who attended our recent Happy Hour with Andrew Levitt of Bridges ventures will recall the distinction that Social Impact Bonds are not true financial instruments but rather contracts from public bodies to private organisations in order to deliver social impact. Given the ongoing budget challenges faced by the public sector it is easy to understand why emphasis may be placed cost savings however the reports reminds of the core social value purpose of such contracts.