EDHECinfra Paper
Towards a Scientific Approach to ESG for Infrastructure Investors

This paper explores the role of environmental, social and governance (ESG) issues in an investment context, namely how institutional investors should incorporate ESG elements into the financial management of their portfolios. A growing number of investors are pursuing ESG objectives to directly improve environmental and social outcomes, either to satisfy mandates from their members or to conform to the expectations of society. This is increasingly the case even though these organisations have primarily been created to deliver investment outcomes, in particular retirement income. Consequently, investors may wish to exclude certain types of assets from their universe such as coal-fired power plants or projects mired in social controversy. However, regardless of motivation, ESG-related decision making will have a financial impact on portfolio performance. It is this area that we investigate here – the role of ESG within an infrastructure portfolio from a strictly financial standpoint.

A Publication of the EDHEC Infrastructure Institute
2021 (March)