Introduction
Michele Giddens, CEO
This has been a challenging year for the sustainable and impact investing movement. The well-documented ESG backlash, especially in the U.S., has caused real disruption – from the billions of dollars of outflows from ESG funds, to the millions of lives affected by cuts to foreign aid budgets.
I don’t want to underplay the extent of these challenges. We have seen some of them first-hand: the consequences for people and the planet have been profoundly damaging. After a decade in which the world seemed to be moving steadily towards Bridges’ long-held vision of a more sustainable and inclusive future, the last year or so has undeniably been a setback for our movement.
But as impact investors, it is our responsibility to find solutions to these challenges. And at Bridges, we have the benefit of being able to invest in a range of different solutions across the group – from equity investments in real estate and growth businesses within our Fund Management business, to supporting outcomes-based programmes via Bridges Outcomes Partnerships, to funding high-impact charities through our Foundation. This helps us better understand the key trends and levers of change in our focus areas (supported by Bridges Insights, our dedicated knowledge function).
This is not a time to step back. It’s a time to step up: to be resolute in the face of opposition, and try to accelerate the pace of change
With this perspective, as we look back on the last year and ahead to 2026, there are three reasons why we continue to have absolute conviction that our vision of investing in a more sustainable and inclusive future is still very much achievable.
The first is that in all our conversations with investors this year – particularly in Europe – we are seeing no diminution of demand for investments in this area. If anything, it remains an attractive differentiator: this year, despite the difficult fundraising environment, we were able to raise a further £335m, taking our total capital raised to date above £2bn.
A key reason for this is the growing evidence base that a focus on sustainability and impact is a driver of long-term economic value. This has been evident in the number of successful exits we have been able to complete from Bridges’ real estate portfolio this year, allowing us to return substantial capital to investors. Creating an industrial scheme that is zero carbon in operation is not just a win for the planet; it also makes the building more attractive to occupiers (because it’s more resilient and cheaper to run) and therefore more valuable as an asset. By building new homes, we are investing in an area where there is, and will continue to be, a clear unmet demand.
A second area of real progress this year has been around policy and market infrastructure. This summer, the Social Impact Investment Advisory Group created by the UK Government (on which I sit) published a set of recommendations on how to scale impact investing in the UK, in a way that would support the Government’s policy priorities. Within weeks, the Government had already signed off on two of the most significant recommendations: the creation of an Office for the Impact Economy, which will act as a ‘front door’ for impact-driven investors and organisations into Government, and the creation of a £500m Better Futures Fund, which will pay for successful outcomes partnerships – an area where Bridges has for the last decade been a pioneer and a market-leader. A degree of caution is necessary here; policy announcements need to be followed by action. But it does at least feel as though there is a real openness to explore how new partnerships between private capital and the public/social sector can accelerate positive change.
Then the third potential reason for positivity is the coming wave of technology. Advances in AI, robotics and biotechnology have enormous potential to transform the way we tackle some of humanity’s greatest challenges – from climate change, to energy, to food, to personalised medicine, to education. Of course, all these new technologies come with inherent risks and dangers. But in the right hands – and this is where impact-driven investors have an important role to play – they can create positive impact on a scale and at a speed we have never seen before.
This matters, because we have no time to lose. 2030 is supposedly the deadline for the Sustainable Development Goals, and currently, progress is lagging in almost every area. We may have already left it too late to limit global warming to 1.5C. Extreme weather events are becoming more common. Societies are struggling with inequality, soaring living costs and creaking public services. So this is not a time to step back. It’s a time to step up: to be resolute in the face of opposition, and try to accelerate the pace of change.
