In just a few years, Environmental, Social and Governance (ESG) investing, also known as sustainable or responsible investing, has moved from an idealistic fringe niche to front-page. ESG is now a mainstream dimension for investors, one that strongly influences the performance and resilience of their investment over time.
This is particularly the case in infrastructure, in view of its wide reaching and long-term consequences for the community. In many cases private investors, through marketplace and industry-led initiatives, have pioneered evolutions and set the path by preceding regulatory requirements from public authorities. Many corporates, investors and operators have embarked on communicating their values and sharing their approaches on the subject to both shareholders and stakeholders. The very notion of fiduciary duty for institutional investors has evolved from a strictly financial maximisation to a wider and longer-term definition to include ESG and sustainability issues.
Whilst there’s never been so many exciting new developments for the infrastructure community, the landscape is blurrier and more fragmented than ever, with new initiatives and tools and no common framework or language that leaves room for green washing.
The timing could not be more appropriate as the current COVID-19 pandemic reveals the weaknesses and lack of resilience of many economic models.
The Handbook offers a rich variety of examples drawn from the collective experience of their members that includes asset owners, asset managers and other infrastructure-related structures, such as academics or rating agencies. LTIIA’s members’ examples reflect their specific challenges and the management practices and proprietary methodologies they developed to address them as well as showcasing the appetite and inventiveness at play when it comes to developing bottom up solutions. Additionally, it reveals the need to further consolidate and streamline tools and standards into commonly accepted market practices that can assist the infrastructure community to measure and compare so they can manage effectively.
View the LTIIA ESG Handbook.