Beyond ESG risk integration: Impact investing

Generali Global Infrastructure

BY GILLES LENGAIGNE
MANAGING PARTNER OF GENERALI GLOBAL INFRASTRUCTURE

Environmental, Social and Governance (ESG) investment is taking root within the infrastructure investment community. Infrastructure assets have the potential to bring strong social, environmental and economic benefits to society but they are also particularly exposed to ESG risks.

Most investment firms active in the space have by now implemented ESG considerations in their investment process. Logically, these policies have been initially focused on ESG risk assessments. While this is an important development, the asset class  offers  the opportunity to go beyond risk assessment and realize its significant potential for positive impact.

Interestingly, according to a recent IFC publication, private investment fund managers pursuing impact investment strategies have deployed 62% of their capital in infrastructure assets1.

“A defining element of our understanding of sustainability is a ban on investments in sectors with potential to cause strong obstructions to the UN Sustainable Development Goals (SDGs).”

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1Creating Impact – The Promise of Impact Investing, April 2019.

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