PI Partnership – Edmond de Rothschild
INVESTING IN INFRASTRUCTURE DEBT TO FUND THE ENERGY TRANSITION
Jean-Francis Dusch is chief investment officer for infrastructure debt at Edmond de Rothschild Asset Management
Infrastructure provides essential services to society and sus- tainability has always been a fundamental component of infra- structure investing. However, sustainability has become far more prominent in recent years, accelerated by climate change conferences such as COP27, government infrastructure plans and regulation. The need to protect the planet is now a given that we need to act on.
The scale of required infrastructure investment Helping to achieve climate change objectives and carbon foot- print reduction targets will require massive investment for developing, financing, building and running new infrastruc- ture. Required investment will reach trillions in this decade alone.
In the UK, the government’s National Infrastructure Strategy sets out plans to transform UK infrastructure in order to con- tribute to its levelling up agenda and achieve net-zero emis- sions by 2050. In Europe, the EU’s plan for a green transition, Fit-for-55, is designed to accelerate the reduction of carbon emissions and in the US the infrastructure bill commits bil- lions to advance clean energy and confront the climate crisis. These new infrastructure projects will require significant capi- tal funding, to which institutional investors can contribute to in a material way, whilst aligning their own climate and carbon objectives.
Regulatory frameworks
The development of sustainability frameworks such as the Sus- tainable Finance Disclosure Framework (SFDR), EU Taxonomy directive and Task Force for Climate Related Financial Disclo- sures (TCFD) have had an impact on how infrastructure man- agers incorporate and report on sustainability factors. Implementing these frameworks has required the implemen- tation of concrete and comprehensive ESG factors across every element of the investment process and ongoing monitoring of assets. First and foremost, it provides us as managers with an opportunity to be innovative, engaged and highly disciplined in our contribution to developing projects, or improving existing infrastructure, that are essential for preserving our planet and the environment, creating jobs and supporting the economy.
24 December – January 2023 portfolio institutional roundtable: Infrastructure
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