5. ESG and Infrastructure
Long-term investment in illiquid assets
Importance for society
Regulatory environment
Sustainable infrastructure source of
deal flow
Anticipating changing regulations and
developments
Opportunities
Investors want to understand the non-financial risks that can severely
impact returns and reputation
14. Two Complementary Assessments
Evaluating both the fund and the asset
• Fund Assessment: 10 indicators
• Asset Assessment: 32 indicators across 8 Aspects
• Operational assets
• Sector coverage:
• Energy
• Water Resource Management
• Waste
• Transportation
• Social
16. Data – Process for Quality Control
Three-layer process for investment-grade data
100%
Validation
Plus
Site Visit
All
Participant
Check
Checks on all Fund and
Asset respondents
23%
5%
Document review of all evidence
Review of all tables and
examples
Data accuracy
Reporting boundaries
Data quality
Evidence for answers
New global commitment to reduce emissions
First ever legally-binding climate agreement
The Paris Agreement on climate change provides a clear signal to investors that the transition to the low-carbon, clean energy economy is inevitable and already underway.
Governments have a responsibility to work with the private sector to ensure that this transition happens fast enough to catalyse the significant investment required to achieve the Paris Agreement’s goals including:
Holding the increase in the global average temperature to well below 2°C above pre-industrial levels, and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, and
Achieving net zero greenhouse gas emissions (“a balance between anthropogenic emissions by sources and removals by sinks of GHGs”) in the second half of the century."
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More responsible investors
More focus than ever on environmental, social, and governance performance across all asset classes
They urge to:
Increase pace of transition
Increase green investments
I short: carrots & sticks are needed
List of investors that signed G20 letter from: http://www.igcc.org.au/resources/Documents/FinalWebInvestorG20Letter24Aug1223pm.pdf
A group of leading infrastructure investors saw the need for a consistent global sustainability framework for the infrastructure sector and together with GRESB in 2015 launched GRESB Infrastructure: a global sustainability benchmark for infrastructure funds and assets
Systematic assessment of infrastructure funds and asset
Objective scoring of environmental, social, and governance performance
Peer benchmarking to differentiate market participants
Regulation provides minimum performance requirements
Leaders are in the right tail, however, the bulk is still in the “bell”
So, how to move the bell forward (= transformation to net-zero buildings that are safe, healthy, comfortable, connected, socially engaged etc.)
Regulation provides minimum performance requirements
Leaders are in the right tail, however, the bulk is still in the “bell”
So, how to move the bell forward (= transformation to net-zero buildings that are safe, healthy, comfortable, connected, socially engaged etc.)
Our process to connect industry stakeholders
Central in this process is data quality, both at the company/fund level and at the portfolio level
More analysis – GRESB Insights
GRESB Infrastructure Assessment
Consultation
Further development Assessment
Participation
Fund investments
Asset investments:
Private
Brownfield and Greenfield
Listed companies
Across infrastructure business activities
Get involved!