Sanlam at forefront of sustainability with blended finance funds

In the global context where environmental, social & governance (ESG) efforts are monopolised by the “E”, we have seen strong outperformance and social impact from Sanlam's Climate Investor Funds.

These funds use a pioneering blended finance engine to drive capital to where it’s needed most. Blended finance is the tactical use of public sector capital to mobilise private sector capital, at scale.

As we move into an era where funds will focus on renewables, mobility and natural assets, we urge others to adopt this model to make maximal impact. 

The recent Sanlam ESG Barometer, which assesses how JSE-listed companies are actively improving their ESG outcomes, is a positive step forward in fostering intentional sustainability practices while providing a benchmark for corporate SA.

The barometer shows SA is making progress, but it is too slow. ESG often becomes more boxing-ticking than tactical, which is when we lose sight of the bigger picture in creating a sustainable world. The world is reliant on the small circle of gas that sustains us and the thin band of soil that covers the planet’s surface, and we don't appreciate how fragile they are. 

Recognising this, Sanlam InfraWorks wanted to make a real impact, fast, so it designed the fund with blended finance principles in mind, just as the term was being coined. The results have been groundbreaking, with close to 8,000 jobs created, 228,770 tCO2eq/year emissions avoided and more than 1.1-million people having improved access to renewable energy, in 2020 alone.

The Climate Investor Funds are evidence that blended finance works. We urge others to employ it to generate impact at scale. Crucially, the success of the funds demonstrates what can be achieved through powerful partnerships grounded in respect and shared purpose. 

Using blended finance to foster ESG excellence

Climate Fund Managers is a joint venture between Sanlam Infraworks and FMO, the Dutch Development Bank — two long-dated institutions with a shared vision for the future and a passion for climate impact. The partnership has launched four funds, all rooted in blended finance.  

We wanted to create funds that work faster than their historical counterparts to quickly close the gap between need and response. Blended finance enables us to do just that. 

Funds for the future

The partnership focuses on key pillars to secure a better future for all. Climate Investor One focuses on renewables, Climate Investor Two on the oceans, waste and water scarcity and Climate Investor Three will be about hydrogen as our future energy source. Climate Investor Four will focus on how we can live in megacities in a climate-positive way. 

As the world shifts towards a just transition and sustainable practices, investment flows will be directed towards renewable energy, mobility solution and biodiversity conservation. We’re heading in the right direction; we just need to accelerate our efforts.  

The Covid-19 pandemic showed us what’s possible in mobilising a fast response. Every day, we poured over the news to view the infection curve rate. We need a similar graph showing greenhouse gas concentrations and the need to stop the upward trajectory. We must find a narrative that resonates enough with people to change behaviour. 

Sanlam InfraWorks' philosophy is to put action to that narrative because there’s no alternative. The numbers will prove up, society will shift, and business and commerce will shift around it. 

The Sanlam ESG Barometer

The Sanlam ESG Barometer, in partnership with Business Day, was launched on March 23 2023. Click here to view the results.  

About the author: Andrew Johnstone is director and CEO of Sanlam Infraworks. 

This article was sponsored by Sanlam.