Infrastructure: Insights from the 2023 reporting cycle

This report analyses data from the 2023 PRI Reporting Framework, focusing on insights from two modules (policy, governance and strategy and infrastructure). The findings highlight the breadth of responsible investment practices among infrastructure investors, but also point to some areas for improvement.

Infrastructure investments are inherently aligned with responsible investment principles due to their exposure to a range of potential environmental, social, and governance (ESG) risks, the potential impact the investments themselves have on ESG factors, and their long-term nature. This is reflected in the depth and breadth of responsible investment policies made by infrastructure investors, and the extent to which investors incorporate such commitments in Limited Partnership Agreements and other such constitutive fund documents.

Infrastructure investments may be particularly exposed to climate-related risks — both physical and transitional — necessitating a proactive approach to sustainability and climate resilience to safeguard asset value and operational continuity. The data suggests that infrastructure investors are taking positive steps in that regard relative to the signatory base as a whole, for example in the use of climate scenarios and metrics. 

Practice on human rights is also more advanced, however there is room for improvement, particularly in relation to the use of the UN Guiding Principles on Business and Human Rights, a baseline for investors to take action on human rights (see Figure 1). The data more generally highlights how infrastructure investors place an emphasis on detailed ESG due diligence and how the findings are integrated into decision making, both pre- and post-investment. This points to the comprehensive way in which ESG risks and opportunities may be managed. However, the data also indicates areas for improvement, notably investors could:

• Engage more thoroughly and effectively with stakeholders during due diligence; 
• Make better use of external verification and / or certification tools to support meeting targets on material ESG factors;  
• Use financial incentives (or penalties) to help build better alignment between investor and asset / portfolio company approaches to ESG. 

Figure 1: Infrastructure investors advanced activity on human rights  

Source: PRI Reporting Framework. The graph presents figures from multiple indicators: PGS 3, PGS 47.1, PGS 49, and PGS 50 . Denominators: 2859 (global signatory base), 210 (infrastructure investors). 

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