The first in a series of reports focusing on real assets, analyses ESG considerations for infrastructure investing
Integrating Environmental, Social, and Governance (ESG) criteria into the investment process is becoming increasingly mainstream. With a plethora of consultants and tools available to analyse public equity and bond investments, institutional investors have few issues integrating ESG criteria into traditional investments.
But there is still a dearth of information on how to integrate ESG criteria into alternative investments. We cannot fill this gap but we want to point out some basic principles and steps that investors can take to better integrate ESG criteria in real assets. We define real assets as infrastructure (both debt and equity), property (again both debt and equity), and commodities (futures as well as direct investments in farmland, timberland, etc.).
Over this and the two following papers we will be looking at each in turn, starting with infrastructure. It is an asset class that is both an obvious target for investors who want a portfolio of sustainable assets – indeed, as we’ll see, for investors who want a portfolio of outperforming assets – but one where standards and practices are inconsistent and opaque.
To read the full report click here.
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