ESG: The foundation of responsible infrastructure investment

Today when we think about sustainable infrastructure investment, we mainly tend to associate it with renewable energy. And yet renewable energy is only one of the cornerstones of a responsible infrastructure debt investment portfolio. Investors seeking to diversify their infrastructure portfolio would do well to look beyond renewable energy assets by also considering the many other increasingly crucial environmental, social and governance topics to find best-in-class investment opportunities.

BNP Paribas Asset Management (BNPP AM) is a recognised leader in sustainable investing, being a member of several advisory committees for international bodies such as the PRI, TCFD, and IIGCC1. We are convinced that integrating environmental, social and governance (ESG) criteria into our investment process enables us to gain a deeper and richer understand- ing of the risks that we face, and to make the best investment decisions for our clients.

Infrastructure debt is mostly private. No public data is avail- able. While some infrastructure projects are quite sizeable, most of the market remains very granular, with limited mandatory public disclosure or reporting requirements. Aside from the Equator Principles – an environmental and social risk management framework, today widely adopted by banking institutions – there remains a clear lack of standardisation for assessing and reporting on these projects. Facing this reality, we have built our own, dedicated, ESG approach into our infrastructure debt investment strategy.

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