New Report -‘Zeroing In: Investing to Decarbonise Operational Infrastructure’

Despite growing investment into renewables, more investors need to actively transition their infrastructure portfolios towards net zero.

Published on 31 Jul 2020

The City of London Corporation today launches a new report that points to the need for greater public-private cooperation to unlock investment leadership, and decarbonise existing infrastructure assets.

Compiled by global consultancy firm Turner & Townsend, the report aims to motivate investment leadership and drive forward the decarbonisation of key economic infrastructure assets.

Sustainable infrastructure investment is core to a global green recovery and critical to achieve deep decarbonisation. Yet, despite growing investment into renewables, more investors need to actively transition their infrastructure portfolios towards net zero.

Evaluating the state of play in the UK context, the report highlights 5 key barriers that are slowing decarbonisation efforts:

  1. Awareness of ESG and the investment implications of Net Zero remains low.
  2. Regulatory structures have not adapted to Net Zero, creating perverse incentives.
  3. A lack of consistent sector-level standards inhibits effective strategy origination and evaluation, aligned with transition pathways.
  4. Portfolio-level initiatives to decarbonise infrastructure assets rely on a sophisticated understanding of stewardship as a value-enhancer.
  5. Transition-enabling technologies are not scaling fast enough across the infrastructure base.

Drawing on investor interviews and leading examples of transition finance, the report calls for closer collaboration with sector regulators and policymakers to accelerate progress towards Net Zero, to manage climate risk, and capture the opportunities of a green recovery.

In their joint forward address, Sir Roger Gifford and Dr Ma Jun, co-chairs of UK-China Green Finance Centre, said:

“Transitioning privately owned operational infrastructure is the next frontier for green finance. Investors must rapidly unpack the implications of the low carbon transition and identify new opportunities for their existing infrastructure assets.

Delivering Net Zero across the global economy will require significant cooperation between the public and private sector. Sector-level transition pathways are necessary to give investors the clarity and confidence to act. But…the specific pathways and actions are yet to be defined”.

With the UK embracing a legally binding Net Zero target by 2050, and the European Union and over a hundred countries to follow suit, the clock is ticking.


Zeroing In: Investing to Decarbonise Operational Infrastructure_EN Final

PDF document - 6 MB