ESG benchmarking in infrastructure sector moves into mainstream
Participating grew in terms of funds and assets in the benchmark while average score remained the same as 2018, according to 2019 GRESB Infrastructure Assessment
GRESB, the environmental, social and governance (ESG) benchmark for real assets, has released the results for the 2019 GRESB Infrastructure Assessment.
Participation has increased again in 2019 as the sector responds to the growing investor demand for standardized and validated ESG data to assess the sustainability of their infrastructure funds and assets.
• The Infrastructure Fund Assessment grew by 43% to include 107 funds. By fund size, the assessment covers 33 of IPE Real Asset’s Top 75 Infrastructure Investment Managers - participating with at least one fund.
• Participation in the Infrastructure Asset Assessment increased by 40% to cover 393 assets. The assessment now covers 30 of the 33 industry sectors across 57 countries, leading to deep data insights for investors, fund managers and asset operators.
• The Infrastructure Public Disclosure dataset was launched this year, providing comprehensive coverage of listed infrastructure companies across the GLIO Global Coverage Index. The data reveals which listed infrastructure companies are the most transparent about their ESG performance, which perform in the mid-range, and which are lagging their peers.
• There was a 62% increase in assets participating in the Resilience Module, which is aligned with the recommendations released by the Task Force on Climate-related Financial Disclosures (TCFD). Funds also participated in this module for the first time. The uptick in participation demonstrates an increasing awareness of the need to respond to investor attention on climate risks and resilience.
Fifty-seven percent of funds participated in the assessment with more than 25% of their assets. This enables the funds to obtain the GRESB Fund Score, which is an overall measure of ESG performance at the portfolio level.
The average GRESB Fund Score remained level with 2018, at 55 points. The average score decreased in the Asset Assessment, from 47.6 in 2018 to 45.5 in 2019, due to lower scores by newer participants. One in three assets participated for the first time in 2019.
Participation increased across all sectors in the Asset Assessment. The best performing sector, with an average GRESB Asset score of 63.2, is Network Utilities, followed by Data Infrastructure (52.5), Diversified (52.8) and Energy and Water Resources (52.7). Data Infrastructure notably moved up the rankings from 2018. Social infrastructure was again the lowest scoring sector (29.0).
There are clear regional differences in performance. One-third of funds are focused on Europe and another one-third are globally diversified. Europe also has the largest number of participating assets (60%), but the lowest average asset score (42.1). In line with the pattern for the real estate sector, Oceania assets are leading the pack in scoring, with an average of 55.5.
This year 2019 sees the introduction of performance intensity data in asset benchmark reports. Where reported by participants, data on health and safety, energy, greenhouse gas emissions, water, waste, biodiversity and habitat are provided as intensity metrics with comparisons to peers.
This is a significant step towards a standardized approach to measuring and scoring assets across different sectors globally. As more sectors provide sufficient observations, these benchmarking possibilities will help fund managers and asset operators of all sectors and regions to better understand and improve their intensity profiles.
Social Media Links (This section can be seen in office only):
Twitter : https://www.theasset.com/article-single.php?id=38639&social=twitter
Linkedin : https://www.theasset.com/article-single.php?id=38639&social=linkedin
Facebook : https://www.theasset.com/article-single.php?id=38639&social=facebook