Infrastructure in the traditional sense
Electricity networks, railroads and telecom towers would generally come to mind when investors think of infrastructure. Infrastructure can be defined as the set of fundamental facilities and essential assets that support the day-to-day functions of households, firms and society at large.
It is becoming increasingly challenging to employ a business-as-usual approach to investing in infrastructure, where some projects could lead to ecological concerns and increased carbon-dioxide emissions. This, coupled with changes in demographics and rapid urbanisation, are creating unique challenges.
In this regard, we see opportunities in infrastructure companies that align with sustainable investing goals and trends, such as environmental resiliency, social infrastructure and improved connectivity.
How we align infrastructure with sustainability2
Provided for information only based on market conditions as of date of publication to illustrate macro trends and investment team’s current view, not to be construed as offer, research or investment advice.
As the world transitions to a low-carbon economy, traditional infrastructure business models such as gas infrastructure are relatively less attractive from a risk/reward perspective.
Instead, we believe there are unique opportunities in infrastructure companies that are striving to help build a more sustainable and inclusive economy. Such companies are better positioned as they provide solutions that help address megatrend challenges. For example, electrification is at the core of decarbonisation, and this has spurred the development of related assets such as electricity networks.
Additionally, we seek to capture growth opportunities in innovative infrastructure areas that leverage new technologies to buid a more sustainable future. For example, electric vehicle charging stations and battery storage are part of the infrastructure framework that helps drive electrification.