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ESG roundup: Green infrastructure, mandatory climate reporting

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  • ESG roundup: Green infrastructure, mandatory climate reporting

GLOBAL - Regulation and changes in supply and demand are creating investment opportunities in green infrastructure, according to a report by the UK Sustainable Investment and Finance Association (UKSIF).

According to the report entitled 'The Future of Investment: Green Infrastructure', published prior to this week's UN Conference on Sustainable Development - also known as Rio+20 - opportunities include waste, water and social infrastructure, as well as renewable power generation.

Investors can gain exposure via real assets or companies, the report highlights.

UKSIF chief executive Penny Shepherd said: "As the world faces the very real challenges of environmental limits and social pressures, these exciting investment approaches may play a key role in restoring trust and confidence in investment and finance.

"There is increasing recognition among investors that financial returns and sustainability are not opposing forces but instead are mutually reinforcing. Both are needed for long-term economic viability."

The report brings together insights from UK infrastructure investment specialists drawn from UKSIF's membership.

The Green Infrastructure is the third in UKSIF's series of 'Future of Investment' reports, which examine new investment trends grounded in delivering wealth by creating value for wider society.

It brings together a roundtable of experts to discuss the range of approaches and product offerings that have already been developed and identifies trends, challenges and future directions.

The Green Infrastructure report features Earth Capital Partners, Equitix, Impax Asset Management and Kleinwort Benson Investors.
 
In other news, the Carbon Disclosure Project (CDP) has come out in strong support of the UK government's announcement that it will mandate the reporting of greenhouse gas emissions by companies quoted on the London Stock Exchange's main market.

But it said the UK must now take a position of global leadership by introducing regulation that ensures companies are required to make a full assessment of how climate change is expected to affect their business.

CDP's executive chairman Paul Dickinson said: "This latest move from the government is a much-needed response to market needs and an important step towards improved valuation of environmental risk.

"[Now] regulation is essential in moving us towards a low-carbon economy."

CDP will respond to the next consultation with the recommendation that companies disclose vital climate change information using a structure that could be adopted by other national jurisdictions to ensure comparable reporting.

As part of this, CDP encourages the UK government to adopt the climate change reporting framework developed by the CDP's Climate Disclosure Standards Board (CDSB) project.

With the support of the UK Department for Environment, Food and Rural Affairs and the input and advice of the global accounting profession, CDSB has for the past five years been working to produce a framework designed for compliance with statutory climate change reporting requirements, reflecting accepted market practice on greenhouse gas emissions reporting.

The CDP has pioneered a global system for the disclosure of corporate greenhouse gas emissions and climate change risk information for 10 years. 

Last year, two-thirds of the FTSE 350 companies disclosed their greenhouse gas emissions and climate change information to their shareholders through CDP, which is now backed by 655 institutional investors representing $78trn (€61.5trn).

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