IIGCC launches net-zero guidance for infrastructure investments

The Institutional Investors Group on Climate Change (IIGCC) has published a new component for the Net Zero Investment Framework (NZIF), providing guidance on aligning and managing infrastructure portfolios with the goal of achieving net zero by 2050.

Since launching in March 2021, the NZIF has followed a strategy of continued expansion through the addition of further asset classes.

The new infrastructure component is the sixth asset class covered by the framework, with the others five being listed equity and corporate fixed income, sovereign bonds, real estate and private equity.

The NZIF is used by signatories of the Net Zero Asset Managers Initiative and the Paris Aligned Asset Owners, outlining a common set of recommended actions, metrics and methodologies to maximise their contribution to achieving net-zero emissions globally by 2050 or sooner.

The guidance covers a range of issues and characteristics often unique to or most pronounced within the infrastructure asset class, which includes their physical nature and direct-world impact, the breadth of investors engaged with the asset class, the breadth of investment types and long-life cycle emissions.

Specifically, the newly proposed infrastructure guidance covers the scope of infrastructure assets to be considered for measurement, metrics and targets to measure alignment over time, and implementation actions to achieve alignment targets and decarbonisation in the real economy.

IIGCC CEO, Stephanie Pfeifer, commented: “Infrastructure has a fundamental and unique role to play in driving the transition of the global economy to net zero thanks to the variety of real-world services it provides, including transport, energy and utilities, the long-term nature of assets and the opportunity to invest in climate solutions.

“The new guidance, particularly the outlining of key actions to increase alignment of assets and a portfolio, should therefore prove valuable to all multi-asset and specialist infrastructure investors.

“Critically, by incorporating more asset classes into net zero analysis and strategy, the greater the chance investors have of achieving real-world impact. Building on the six asset classes already covered, we aim to continue to expand the NZIF in the coming year.”

IFM Investors executive director of responsible investment, Chris Newton, added: “Harnessing collaborative thinking and the perspectives of a variety of stakeholders is crucial to developing solutions for a net zero future.

“I encourage stakeholders to look at the consultation report and provide feedback to support the further development of this framework, which aims to offer globally consistent guidance for infrastructure investors to align their portfolios to net zero.

The infrastructure component was developed by an IIGCC-led working group and its co-leads Alistair Perkins, NN Investment Partners and Chris Newton, IFM.

“The group received support from Chronos Sustainability, and several infrastructure-focused members of IIGCC and the three Paris Aligned Investment Initiative’s partner networks (AIGCC, Ceres, IGCC). Arup and GRESB also reviewed the working group’s outputs.”

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