How should we gauge the relationship between ESG and the market value of infrastructure? - a Scientific Approach

Practically every investor on the planet today incorporates a vision to improve environmental and social outcomes. Either to satisfy fiduciary duties or adhere to expectations of society. In order to demonstrate power of action some investment firms introduce strict investment constraints by excluding certain assets from their portfolios e.g. coal-fired power plants. Others embed a laundry list of items in the investment process that is supposed to matter. Unfortunately none of these approaches really help investors to understand how to use ESG characteristics to meet their financial objectives. A recent paper, “Towards a Scientific Approach to ESG for Infrastructure Investors” EDHECInfra (Blanc-Brude, F and Manocha, N, 2021) attempts to answer the key question for infrastructure investors: How should we gauge the relationship between ESG and the market value of infrastructure?