ESG as a Key Success for Infrastructure Investment a value creation perspective Eugene Zhucheko Executive Director, LTIIA June 1, 2017
Demand for infrastructure investment $3.3 trillion funding gap
Energy Generation Cost Comparison Germany 67-100$/MWH 96$/MWH 68-109$/MWH UK 93-122$/MWH 120$/MWH US 75-120$/MWH 119-172$/MWH China 47$/MWH 114-141$/MWH 80-91$/MWH 65-70$/MWH India 30-35$/MWH Onshore wind 68-94$/MWH 88-116$/MWH 35-39$/MWH 83-104$/MWH Utility PV 45-65$/MWH Brazil 70-105$/MWH Coal LCOE 49$/MWH Australia South Africa Gas LCOE 81$/MWH 69$/MWH 51$/MWH 64-80$/MWH 54-67$/MWH 65$/MWH 84-95$/MWH 67-76$/MWH 32-54$/MWH 80-95$/MWH Source: Global Infrastructure Hub
Energy Transition European Union Outlook Source: 2ºC limit scenario, International Energy Agency, World Energy Investment Outlook, 2014
Social Infrastructure Unlocking the opportunity Infrastructure spending by sector, $bn at 2014 exchange rates 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2006 Extractions 2016 Transport 2025 Telecommunications Utilities Manufacturing Social Source: Oxford Economics
ESG Frameworks and Standards UN Global Compact (2000) UN Global Reporting Initiative (2006) UN Principles for Responsible Investment (2006) US Private Equity Council Responsible Investment Guidelines (2009) European Development Finance Institutions Principles for Responsible Financing (2009) ISO 14000 (2010-2016) Sustainability Accounting Standards Board (2011) IFC Performance Standard (2012) Equator Principles (2013) Green Bond Principles (2015) GRESB Infrastructure (2016) SuRe Standard – Global Infrastructure Basel and Natixis (2016)
Pricing ESG Risks
LTIIA contributions Financial Benchmark for infrastructure ESG Handbook and ESG Indicators Library Policy Dialogue on convergence in ESG frameworks LTIIA Climate Task Force helping governments implement COP21 commitments