Unlocking capital from Institutional Investors towards Emerging Markets and Developing Economies
The Emerging Markets and Developing Economies (EMDE) Investor Taskforce is an industry-led initiative convened by the Minister of State for International Development and the Economic Secretary to the Treasury. The Taskforce brings together public and private sector stakeholders to develop practical solutions that will support institutional investors in pursuing investment opportunities in EMDEs to help deliver economic growth and tackle climate change.
The Taskforce was convened in response to the industry report ‘The UK as a Climate Finance Hub’. In its work, the Taskforce will address the recommendations in that report, leveraging and reinforcing the UK’s position as a global hub for sustainable finance.
The EMDE Investor Taskforce operates through work streams focusing on five distinct, but complementary areas:
UK pension funds operate within diverse capacity constraints and risk appetites, whilst the Pension Schemes Bill 2025 creates a new regulatory and policy environment for investment in emerging and developing economies. This workstream deepens understanding of differentiated asset owner requirements for EMDE investment, and deepens understanding of the opportunities that UK asset owners have to contribute to financing climate transitions in EMDEs. This includes engagement with the outcomes of the 2025 ‘Baku to Belem’ process, and monitoring of opportunities created for UK insurers by the Solvency UK Matching Adjustment Investment Accelerator. With ongoing regulatory changes, especially for the UK DC market, this workstream builds the knowledge and appetite needed to channel UK institutional capital towards sustainable development.
Institutional investors lack tailored resources that address their specific requirements and constraints when considering EMDE allocations, and also seek clarity on the product landscape for EMDEs. This workstream develops and launches an interactive toolkit that provides asset owners with practical guidance on emerging market investment – equipping pension funds and other institutions with the knowledge and frameworks needed to confidently deploy capital in developing economies. It also seeks to convene a product showcase for asset owners, spotlighting opportunities across asset classes and jurisdictions.
Asset owners require granular, investor-relevant data on EMDE investment performance to inform strategic allocation decisions, yet such data remains fragmented and inaccessible. Building on 2025 findings, this workstream will work towards cross-initiative efforts to establish a platform to collect and share private sector credit performance data. It will also seek enhanced disclosure from multilateral development banks and development finance institutions through partnerships with the GEMs platform and Hamburg Data Alliance, and drive awareness of these datasets among pension funds, asset managers and investment consultants. The workstream aims to demonstrate that robust data can unlock institutional capital for climate-compatible investments in emerging markets.
EMDE Investor Taskforce work in 2025 identified a variety of views on the role of credit ratings within the EMDE investment chain amongst asset owners and managers. With a focus on guarantees and blended finance, the workstream will engage investors and credit rating agencies to undertake analytical education on the methodologies for rating different types of EMDE transactions and products. A significant focus is placed on the role that historic performance data can play in updating understandings of risk, and the role of recovery assumptions. The underpinning logic of this workstream is the belief that improved understandings of risk can benefit real-life EMDE transactions.
Prudential regulations for banks and insurers present significant barriers to institutional investment in emerging markets and developing economies. This workstream builds on EMDE Investor Taskforce work in 2025 to assess the regulatory barriers faced by pension funds, insurers and banks undertaking EMDE investment, and focuses specifically on the experience of prudential treatment of multilateral development bank products and the experience of insurance regulatory barriers globally.
