EDHECinfra Announcement
NATIXIS and EDHECinfra to gauge impact of ESG on infrastructure investing
Publication date: 2019-10-08

Infrastructure benchmark pioneers to create measures and indexes of how increasingly significant ESG factors are affecting infrastructure investments

EDHECinfra, the same team that created an unlisted infrastructure indexing platform, launches its new three-year research project today. With the support of Natixis, the project’s aim is to create useable, comparable documented measures of the impact and risk profile of social and environmental factors on infrastructure investments.

ESG – environmental, social and governance – refers to the central factors in measuring the sustainability and ethical impact of an investment in a company or business. Despite its relevance to today’s financial world, few holistic and systematic measures exist to help investors to track ESG outcomes and related risks.

“Infrastructure investments have value because they are useful over long periods of time,” says Frederic Blanc-Brude, director of EDHECinfra. “Social and environmental factors significantly impact this long-term value, but today we do not know how or on what scale.”

“We want to find out what the impact of better-designed, more resilient infrastructure can be for the economy and for investors, focusing on the first-order problems, like climate risk and social acceptability, over the life of these investments,” explains Anne-Christine Champion, Global Head of Real Assets at Natixis.

“We can build a new area of applied knowledge,” adds Blanc-Brude. “We will be putting together existing datasets with new ones created using artificial intelligence, combined with the depth of knowledge on infrastructure assets and investment shared between EDHECinfra and Natixis.”

The first aim of the Research Chair will be to produce a comprehensive but compact analysis of ESG reporting standards, taking the perspective of infrastructure companies and aiming to provide an exhaustive set of potential ESG impacts and risks. Next, using machine learning, the team will create new datasets on ESG risks and impacts in infrastructure investments. The ultimate goal is that these will lead to the development of an infrastructure social acceptability index, as well as of measures of economic impact and of the climate risk exposure index of infrastructure assets.

“Ultimately, our understanding of resilience and ESG’ impact in infrastructure investment will impact investors’ selection criteria and the prudential treatment when investing in the asset class” says Champion.

About the Natixis/EDHECinfra Research Chair

This long-term partnership between Natixis and EDHEC began in 2012. Over the subsequent seven years, they have jointly generated a number of key research findings and industrial applications thanks to the strong link between academia and practitioners. With the support of Natixis, the EDHECinfra research institute delivered new ways to understand and model credit risk in private infrastructure debt, a series of financial benchmarks that track 20 years of investment in the asset class, and a better integration of this asset class in prudential regimes such as Solvency-II.

About Natixis

Natixis est un établissement financier français de dimension internationale spécialisé dans la gestion d’actifs et de fortune, la banque de financement et d’investissement, l’assurance et les paiements. Filiale du Groupe BPCE, 2e acteur bancaire en France à travers ses réseaux Banque Populaire et Caisse d’Epargne, Natixis compte près de 16 000 collaborateurs dans 38 pays. Elle accompagne et conseille sa propre clientèle d’entreprises, d’institutions financières et d’investisseurs institutionnels, ainsi que les clients des réseaux du Groupe BPCE. Cotée à la Bourse de Paris, Natixis dispose d’une structure financière solide avec un total fonds propres CET1 en Bâle 3(1) de 11,1 milliards d’euros, un ratio CET1 Bâle 3(1) à 11,5% et des notations long terme de qualité (Standard & Poor’s : A+ / Moody’s : A1 / Fitch Ratings : A+).

(1) Sur la base des règles CRR-CRD4 publiées le 26 juin 2013, y compris compromis danois – sans phase-in. Se reporter à la note sur la méthodologie dans la présentation des résultats du 2T19

Chiffres au 30 juin 2019

About EDHECinfra

EDHECinfra exists to answer a simple question: Why does infrastructure have value? The value of infrastructure is financial, economic and social and determines the opportunity to have infrastructure in the first place. EDHECinfra collects data, develops methodologies and produces research and tools to help answer this question. In 2019, EDHECinfra launched a series of global indices and benchmarks of the risk-adjusted performance of private investments in the equity and the debt of infrastructure companies. Having created the largest database of infrastructure investment data in the world, in combination with cutting-edge technology to estimate the fair value of illiquid assets, EDHECinfra is now a key knowledge repository for infrastructure investors. Going forward, EDHECinfra is developing a series of projects to measure the exposure and materiality of ESG (environmental, social and governance) risks and impacts present in infrastructure investment, including social acceptability, physical risks and the usefulness of infrastructure assets. All things by which infrastructure does, or not, have value in the long-term.

 

 

NATIXIS and EDHECinfra to gauge impact of ESG on infrastructure investing

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