“An unprecedented transformation of existing infrastructure systems is needed to achieve the world’s climate and development objectives”. These are the words from the Financing Climate Futures: Rethinking Infrastructure report jointly issued by the OECD, UN Environment and the World Bank Group at the end of 2018.
When the above report was published, green infrastructures at scale looked like a distant dream. But fast forward to today, and we are living in a world where the ambitions of ESG and climate action have never been closer to reality. Even before the pandemic started, large asset managers such as Blackrock had already announced their ambition for greater climate alignment, signaling imminent investor-led changes toward greener activities in large parts of the economy. As the markets continued to grapple with the devastating effects of the pandemic, we saw cash inflows into ESG funds quadruple in 2020 compared to that in 2019, setting new records. Furthermore in 2020 we saw many high-profile companies with large environmental footprints – including oil and gas companies such as Shell, PetroChina, BP, and mining companies such as BHP and Rio Tinto – join the net-zero ambition club. As 2020 draws to an end, the two largest economies USA and China are on more optimistic trajectories than they were at the end of 2019. And importantly, a large portion of the stimulus that are about to be injected in various economies around the world will have a focus toward building greener and more resilient infrastructures.
Map showing the regions and cities pledging toward net zero
(courtesy: Data-Driven EnviroLab & NewClimate Institute)
Making greener, creditable investments
The ESG ambitions around the world are clear, but how will ambitions transform into reality? In an environment where reliable ESG reports are lacking and greenwashing is rampant, how would investors ensure that the most efficient projects – with optimum returns along both financial and ESG dimensions - are financed? As the rubber hits the road in 2021 and capital starts to look for deployment opportunities, we believe that being able to accurately predict the materiality of projects is of paramount importance to ensure that the most long-term efficient projects are backed by investors.
At ESG Base, we are on a mission to equip investors with such predictive capabilities. Using a fundamental science-based approach, our state-of-the-art technology and analytical tools enable the users to predict, model, and monitor the material impact of their projects, while drawing from a wide range of environmental, policy, and technological signals. Because of its science-based approach, the ESG Base predictions can cut through the fog where reliable ESG reports of comparable operating assets are either unreliable or not available.
How can ESG Base help you?
ESG aligned infrastructure is projected to grow into a $7 trillion/yr market. Are you ready to participate? If you are looking to deploy capital in alignment with your values and priorities, the highly customisable ESG Base technology is just the capability you need.