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How climate and nature-related factors are applied in the investment process
The report finds that while all surveyed infrastructure investors use ESG scoring frameworks, integration is most prevalent in qualitative evaluation and post-investment monitoring, with less emphasis on valuation modelling. Key drivers for ESG integration include financial returns, risk management, and brand reputation. Greenhouse gas (GHG) emissions and physical climate risks are the most integrated factors, particularly in the energy, utilities, and transport sectors, whereas biodiversity remains the least integrated due to quantification challenges. The report notes a shift from simple negative screening toward a more nuanced approach where investors may acquire unsustainable assets to finance their transition to sustainability.
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Document type: Report