Principles for Responsible Investment
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PRI launches primer on responsible investment in infrastructure
The PRI is pleased to launch the Primer on responsible investment in infrastructure. The primer clarifies key concepts of responsible investment in private infrastructure equity and debt, and how the six Principles for Responsible Investment apply to infrastructure investing in both greenfield and brownfield assets.
It frames responsible investment in infrastructure investing as systematically identifying, assessing, pricing, managing and monitoring material ESG risks. This means preserving and enhancing the value of an infrastructure asset in the investment process – from origination to deal making, asset management and exit. Addressing material ESG considerations and practising active asset management should therefore contribute to an improvement in the long-term risk-adjusted returns for investors. To date there has been little guidance available on integrating ESG and applying the Principles in infrastructure investing, which in many cases naturally considers ESG factors and impact analysis, for example as part of regulatory compliance. The primer outlines some of the ways indirect and direct infrastructure investors can apply the six Principles for Responsible Investment, intended for both asset owners and investment managers that are looking to adopt a more comprehensive and structured approach to managing ESG risks and opportunities.
The publication of the primer follows the launch of PRI’s infrastructure work stream and the creation of the PRI Infrastructure Advisory Committee in February 2017. The work stream provides a global platform for collaboration between institutional investors and managers to understand and develop good practices in infrastructure investing. It aims to develop an industry-wide understanding of responsible investment in infrastructure; and promote an industry-wide expectation throughout the infrastructure investment chain that responsible investment is a core part of standard investment practice.
Andrew Major, General Manager Unlisted Assets at HESTA Super Fund, and co-chair of the Infrastructure Advisory Committee said:
“The primer provides an excellent introduction and high-level insights into the application of the UN-supported PRI’s six Principles to infrastructure investment. It is designed to improve the understanding of responsible investment among infrastructure investors, as well as to encourage both asset owners and managers to strengthen their approach to responsible investment in infrastructure”
“Sustainable infrastructure projects must become the new normal,” said PRI managing director Fiona Reynolds, “as they provide an opportunity for countries to climate proof their foundations for future generations.”
Download the primer here.