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Limited ESG Data Inhibits Infrastructure Investors

Without access to more comprehensive data on ESG-related issues, investors are struggling to fully manage risks to their infrastructure investments, according to EDHECinfra, a provider of market indices, benchmarks and valuation analytics across unlisted infrastructure equity and private debt. Its survey of 100 infrastructure investors identified three key concerns. The first is that ESG risks are not effectively priced, respondents said, noting that the resulting lack of visibility has made it harder for them to properly account for risks in their portfolios – particularly future climate-related impacts. Secondly, 80% of respondents cited climate as their first or second biggest concern when managing risks, whilst “social acceptability and governance issues receive little attention so far”, the report said. Finally, more comprehensive and standardised ESG data is necessary to properly benchmark non-financial risks, surveyed investors added. Frederic Blanc-Brude, Director of EDHECinfra and a co-author of the report, said: “The creation of robust benchmarks to assess risks on the basis of non-financial data, especially climate risks, is a necessary evolution for the infrastructure investment sector.”

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