Investor A-team launches sustainability benchmark

Institutional investors representing about $1.5tn of assets hope the initiative will allow more private capital to flow towards infrastructure.

A group of investors including some of the world’s largest pension funds have launched GRESB Infrastructure, a global sustainability benchmark for infrastructure assets.

Institutions including AIMCoAPGATPAviva InvestorsCalPERSMirova,Ontario Teachers’ Pension Plan and PGGM have partnered with GRESB, an industry organization focused on portfolio-level assessment of sustainability in real estate, to set up the framework. 

The hope, the group said in a statement, is that the existence of a consistent benchmark for investors to collect and compare key environmental, social and governance data will help channel fresh institutional capital towards the asset class. 

“This is an idea whose time has come. For the first time asset managers will have the data to evaluate whether infrastructure assets are – or are not – sustainable – and can make investment decisions accordingly. It should mean more capital flowing into more sustainable infrastructure – and reliable long term returns for investors,” said Euan Munro, chief executive of the UK’s Aviva Investors.

The framework’s backers point out that although 28 percent of pension funds now invest in infrastructure, their allocations to the asset class, below 1 percent of their total investments on average, will continue to rise in the coming years. 

“Given the long-term horizon and the societal impact of infrastructure investment, sustainability and broader environmental, social and governance considerations are critically important for infrastructure investors. Therefore we join forces in setting up a global benchmark that provide insight, allow us to measure the progress and provide us the means to engage with our investee funds and companies,” said Patrick Kanters, managing director for global real estate and infrastructure at Dutch-based APG Asset Management.

The move follows in the footstep of broader efforts by institutional investors and fund managers to institutionalize the asset class, most notably through the creation of the Long-Term Infrastructure Investors and Global Infrastructure Investor associations. The first assessments under the GRESB Infrastructure framework are expected in the first quarter of 2016.