Infrastructure assets are often heavily regulated, operate with a government counterparty or are subject to public scrutiny.
This means that considering some ESG factors is an inherent part of the business for many direct infrastructure investors. However, responsible investment practice takes place on an ad hoc and case-by-case basis rather than through a strategic assessment of the ESG risks and value creation opportunities across a portfolio. A clear description of responsible investment best practice has still not emerged, nor have the appropriate tools and frameworks been fully defined. Progress on responsible investment in infrastructure means moving from ad hoc to systematic practice. It means going beyond compliance to considering responsible investment as a value driver. It is about not just managing a specific risk but taking into account the overall societal and environmental impact of the investment.
The PRI can support investors dealing with these considerations. The PRI was founded in 2006 and started its work on infrastructure in February 2017. The PRI’s objectives are to:
- develop an industry-wide understanding of responsible investment in infrastructure; and
- promote an industry-wide expectation throughout the infrastructure investment chain to embed responsible investment into standard investment practice.
The work stream scope includes investment into private infrastructure equity and debt, both greenfield and brownfield. Please refer to the appendix for details on the PRI Infrastructure Advisory Committee.
Primer on responsible investment in infrastructure
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