Environmental, social and governance performance among top infrastructure investor issues

More than nine out of ten infrastructure investors have identified performance in environmental, social and governance (ESG) matters as a top strategic consideration according to findings from a recent survey.

The survey by professional services company GHD, law firm, Bird & Bird and engineering consultancy, ITPEnergised recorded that 92% of infrastructure investors have “identified ESG performance as instrumental for a clear long-term value creation strategy.”

According to the study authors:

• 82% of respondents expected scrutiny of ESG issues to increase significantly in the next three years;

• 46% believed that politicians/regulators were the “top drivers” of ESG in infrastructure projects;

• 56% saw regulatory requirements as the most important factor in pushing their organisation to have a wider consideration of ESG; and

• 28% said lack of clarity on standards was the biggest challenge when making ESG-oriented investments.

The authors said 60% of the organisations surveyed were headquartered in the UK, with the average infrastructure investment in the UK standing at around £3bn. They reported: “ESG investment criteria have become a priority for infrastructure investors, with ESG impacting every stage of the asset lifecycle from origination to exit.”

The survey found that 72% of respondents “broadly agreed” with the focus of the UK’s government’s environmental plan, although only 16% strongly agreed while 12% disagreed.