The recovery from the coronavirus crisis has been described as K-shaped. People that could work from home while retaining their jobs have accumulated savings ‚- inflows of household liquid assets have increased substantially since the start of the pandemic according to the Bank of England ‚- while many others, who often started out on lower incomes and with less wealth, have lost their jobs. Unemployment has increased by around one percentage point according to the ONS. At the commercial level, larger companies have consolidated their positions while smaller businesses have struggled: as an indication, the FTSE 100 and FTSE 250 have recovered much of their losses since the start of 2020, while the Federation of Small Businesses warns of mass closure of smaller firms.
Businesses on the lower leg of the K must work out how to rebuild. People on the upper leg of the K face the (very different) challenge of working out how to deploy savings at a time of low interest rates. Finally, the public and private sector are working towards cutting carbon emissions.
These three challenges together create an opportunity: a mechanism for savers to invest in small and medium sized businesses (SMEs) that are implementing environmentally-sustainable projects.