GLOBAL
COVERAGE & GROWTH
The Infrastructure Fund Assessment grew by 43% to include 107 funds. By fund size, the Assessment covers 33 of IPE Real Assets’ Top 75 Infrastructure Investment Managers – participating with at least one fund.
Out of the 107 participating funds, 64 (60%) participated with more than 25% of their assets, allowing them to obtain a GRESB Fund Score, the ultimate ESG benchmark of fund performance for investors.
The Infrastructure Asset Assessment increased by 40% to cover 393 assets.
Participation grew across all regions being particularly strong in Oceania (53% growth) and the Americas (44%). The Assessment now covers 30 of the 33 industry sectors across 57 countries.
In 2019, all assets reported their facilities including their locations. The map above color codes each country based on the number of reported facilities. Assets reported on six continents, with over 1,100 facilities spread across 57 countries, with coverage continuing to be dominated by OECD countries.
Europe builds upon its track record for transparency with the most funds and assets participating in the benchmark by both number and value. Assets in Oceania or that are Globally Diversified scored highest, with Oceania reflecting the same leadership trend shown in the Real Estate Assessment.
GRESB MODEL AND SCORES
The average GRESB Fund Score remained similar to 2018, with an increase in average Fund Assessment Score (71) being offset by a slight decrease in the average Weighted Asset Score (48 in 2019, versus 49 in 2018). The tendency for Fund Assessment Scores to be higher than Weighted Asset Scores continued in 2019, showing that fund management practices tend to lead the overall performance of the underlying assets. Fund managers should put most effort into improving asset performance before improving their own practices.
The number of funds eligible for GRESB Fund Scores grew sufficiently in 2019 to allow star ratings to be calculated for the first time. These ratings divide the participants into equal quintiles, providing a relative measure of performance against all other participants. The minimum score for a 5-star rating was 70 and the minimum score for a 2-star rating was 37
The GRESB Model for Funds shows the Fund Assessment Score on the vertical axis and the Weighted Average Asset score on the horizontal axis.
Funds are eligible for a GRESB Fund Score when they report for more than 25% of their assets (57% of the total in 2019). These are represented by the green dots.
Those reporting with less than 25% of their assets receive only a Fund Assessment Score and are clustered on the vertical axis (blue dots).
The GRESB Model for Assets shows the score for each asset on the two dimensions (Management & Policy and Implementation & Measurement) that make up the overall GRESB Asset Score.
Each dot is sized in proportion to its GAV. Overall GRESB Asset Scores decreased from 48 in 2018 to 46 in 2019, slightly reversing the trend seen since the Infrastructure Assessment launched in 2016.
Average scores for Management & Policy improved slightly from 49 to 50, but Implementation & Measurement scores decreased from 46 to 42. This is partly explained by lower scores by new participants (1 in 3 asset participants in 2019 participated for the first time). New participants to GRESB tend to have lower scores than continuing participants, generally because their ESG practices are less mature.
DEFINING SDG MATERIALITY
There is an emerging recognition among GRESB Investor Members that the UN Sustainable Development Goals (SDGs) provide a useful reference point for both guiding the intent and measuring the impact of their investments. We have defined SDG materiality for real assets which provides the foundation for our work with our governance groups to agree upon a standardized set of metrics to track the contribution of real estate and infrastructure investment towards achieving the goals.
GRESB performed the mapping exercise with a top-down approach, first beginning with the alignment to the goal, then to the target, and lastly to the indicator. The alignment was ranked on a 0-3 scale (0- “Not aligned”; 3 – “Aligned”)
In addition to the alignment mapping, we analyzed which SDGs are the most frequently addressed in public reporting by GRESB participants. The highlighted SDGs in the image are the most material to the infrastructure sector
FUND
The chart shows the average scores obtained for the 12 scored fund indicators. Scores increased for strategy, policy and disclosure, and decreased for commitments, investment and incident monitoring, and third party review of disclosures. Nearly all funds have a senior decision-maker accountable for ESG issues.
In 2019, just over 80% of funds reported a public commitment to one or more ESG standards or principles. This chart shows the commitments made by funds, from most to least popular. Becoming a signatory to the PRI is the most commonly reported commitment, increasing from 44% in 2017 to 79% in 2019.
Additionally, 71% of this 79% also report their progress to PRI. Commitment to the Taskforce on Climate-related Financial Disclosure (TCFD) recommendations is relatively strong, with almost half of all participants committed to reporting- ing in line with the recommendations.
The FUND1 indicator was modified from last year and now focuses on strategies rather than objectives. 77% of funds reported having a sustainable investment strategy in 2019. This chart shows the range of strategies applied for each of the funds that reported applying one or more strategies.
Interestingly, it is not uncommon to employ multiple strategies. Nearly all of these respondents integrate ESG factors in their business strategy (96%). Screening based on ESG is still mostly based on exclusion (75% of responses), rather than on positive characteristics (43%) or international norms (42%). Two out of three use corporate engagement as part of their investment strategy.
ASSET
The GRESB Asset Assessment is structured into seven unique sustainability Aspects.
Average Management and Monitoring & EMS Aspect scores have stayed steady or increased compared to last year.
Scores for Performance Indicators, Policy & Disclosure, Risks & Opportunities and Stakeholder Engagement have weakened.
The chart shows the number of assets participating and average score, broken down by sector. Participation grew across all main sectors and was strongest in Transport (37 additional participants), followed by Social Infrastructure (an increase of 24 participants) and Renewable Power (20 new participants).
The best-scoring sector is Network Utilities with an average score of 63 and the lowest average Score is for Social Infrastructure (29). The score for the latter sector is dragged down by a significant number of low-scoring assets, suggesting that these organizations have not given ESG as much priority as other sectors.
The Asset Performance Indicators show the extent to which assets report on their most material ESG issues. There are currently seven Performance Indicators in the assessment, as shown left.
This chart shows the number of participants that reported on each Performance Indicator compared to the number that should have reported (i.e. for whom the issue was deemed material). Investor demand for greater reporting on these indicators has led to an absolute increase in the number of participants reporting, although the proportion has remained stable. As seen for overall scores, this is largely due to the high number of new participants, who are still developing their ESG reporting. It is therefore expected that Performance Indicator reporting will increase in the future, aided by standardization of the metrics.
To drive performance improvement, it is good business practice to set targets and track performance. This chart shows the number of participants that set short-term (2018) targets compared to the number that should have set a target (i.e. for whom the issue was deemed material). Out of the seven performance indicators, it is most common to have targets for Health & Safety (72% have short-term targets), followed by Energy, then Biodiversity & Habitat. There has been an absolute increase in participants reporting on these indicators, although there hasn’t always been a relative increase.
Intensity metrics use a numerator (measure of performance or impact) divided by a denominator (measure of asset size). The most readily available denominators are Gross Asset Value (GAV), revenue and asset output. By encouraging assets to report on these standardized intensity metrics, GRESB is increasing comparability by providing ‘benchmarkable’ data. This chart shows the number of participants that reported output intensity metrics and the number of participants for whom it was deemed material. In almost all cases, reporting of intensity metrics has increased from last year, although the percentage reporting is only about 35 – 55%, showing there is some way to go before this becomes standardized.
In 2019, an indicator on gender and diversity was introduced to both the Fund and Asset assessment. In the chart, upper, darker bars show the gender diversity for management/governance level staff while lower, lighter bars represent the diversity for all employees.
Reporting shows a predominance of men in the infrastructure sectors at both employee and governance level with a tendency for the proportion of women to be lower at the management/governance level than for employees in general.
For assets, the average proportion of women across all sectors is 22% at management/ governance level and 28% for all employees. This compares to a proportion of 34% reported in the Fund Assessment, and as a comparison, 44% reported in the Real Estate Assessment.
RESILIENCE
In 2018, GRESB launched the Resilience Module as a tool to provide investors and participating companies, funds and assets with information on resilience and adaptation. The Resilience Module is a three-year effort that will ultimately lead to new indicators in the core GRESB Real Estate and Infrastructure Assessments. In 2019, the Resilience Module was revised to increase alignment with the recommendations by the Task Force on Climate-related Financial Disclosures (TCFD) and it was made available to funds for the first time.
18 funds and 60 assets participated in the GRESB Resilience Module this year, more than twice the number of last year. The chart above shows the percentage of funds and participants in each sector that participated in the module. The sectors with the highest response rates were Network Utilities (31% of participants completed the Resilience Module) and Power Generation Excluding Renewables (28%).
In terms of the indicators, the chart on the right shows that funds and assets are scoring well on senior employee responsibility, communication with governance bodies and implementing business strategies. However, the results show a need for improvement in setting specific resilience targets and analyzing transition risk.
PUBLIC DISCLOSURE
This year saw the launch of the Infrastructure Public Disclosure dataset. This is based on a separate evaluation to the Infrastructure Fund and Asset Assessments, being simpler and focusing on public disclosure, and targeted specifically at listed infrastructure companies. GRESB collected ESG disclosure information on 155 listed infrastructure companies globally, including full coverage of the GLIO Global Coverage Index and listed companies that participated in the GRESB Infrastructure Assessment.
Each company received a disclosure level from A-E. The average letter grade was a C, equivalent to a score of 49% of all points available. The region with most participants is the Americas, but the highest number of constituents receiving an A-Level for disclosure relative to their sample size is Oceania, closely followed by Europe. Over time, it is expected that companies covered by the Public Disclosure dataset will participate in the full Infrastructure Assessment (12 entities did this in 2019).
Infrastructure Partners
Global
Premier
Partner
Infrastructure Industry Partners
2019 INFRASTRUCTURE SECTOR LEADERS
GRESB Sector Leader Awards recognize the best performers annually from across the GRESB Assessments. Achieving sector leader status is recognition of best practice ESG performance. We congratulate the 2019 GRESB Infrastructure Sector Leaders.
| Sector | Region | Name |
|---|---|
| Sector: Diversified | Arcus European Infrastructure Fund 1, Arcus Infrastructure Partners |
| Sector: Renewable Power Generation | Capital Dynamics Clean Energy and Infrastructure V JV LLC, Capital Dynamics |
| Sector: Other (including Data infrastructure, Social and Transport) | Macquarie Super Core Infrastructure Fund, Macquarie Infrastructure and Real Assets |
| Region: Americas | Capital Dynamics Clean Energy and Infrastructure V JV LLC, Capital Dynamics |
| Region: Asia | Takara Leben Infrastructure Fund, Inc., Takara Asset Management Co., Ltd. |
| Region: Europe | Arcus European Infrastructure Fund 1, Arcus Infrastructure Partners |
| Region: Globally diversified | Macquarie Super Core Infrastructure Fund, Macquarie Infrastructure and Real Assets |
| Region: Oceania | AMP Capital Diversified Infrastructure Trust, AMP Capital |
| Sector | Superclass | Sector | Class | Name |
|---|---|---|
| Data Infrastructure | Data Transmission | AXIÓN Infraestructuras de Telecomunicaciones S.A.U. |
| Diversified and Other | REDEXIS GROUP | |
| Energy and Water Resources | Pinedale Energy Partners | |
| Environmental Services | Saubermacher Dienstleistungs AG | |
| Network Utilities | Phoenix Natural Gas | |
| Power Generation x-Renewables | Viesgo Producción S.L. | |
| Renewable Power | Wind Power Generation | Ventient Energy |
| Social Infrastructure | Government Services | Operadora de Infraestructura Especializada de Guanajuato, S.A.P.I. de C.V. ("OIEGSA") |
| Transport | Road Companies | Globalvia |
| Diversified and Other | Other | ESVAGT A/S |
| Renewable Power | Solar Power Generation | Sonnedix Power Holding |
| Social Infrastructure | Education Services | UDICITE |
| Social Infrastructure | Health and Social Care Services | Gestión Integral de Hospitales de Zumpango, S.A.P.I. de C.V. ("GIHZ") |
| Transport | Airport Companies | Australia Pacific Airports Corporation Limited |
| Transport | Port Companies | Associated British Ports |
Entity is an Asset Sector Leader (leader for the Class)