How ESG reporting is changing

Infrastructure is making strides towards sustainability as more firms set greenhouse gas emissions targets than ever before, says GRESB’s director of infrastructure Joss Blamire.

Joss Blamire

The ESG landscape is rapidly evolving, with new regulations and reporting requirements being established and new challenges emerging as we seek to tackle the complex environmental and social issues we face as an industry. While the road ahead is long, the infrastructure industry is firmly on the path to sustainability, collectively contributing to ESG integration and to creating a more resilient and sustainable world.

This growing commitment to ESG and sustainability is reflected in the growth in participation numbers in the GRESB Infrastructure Assessments, which benchmark and score assets and funds based on a range of 45 unique ESG issues. In 2022, participation in the infrastructure benchmark grew by 16 percent, representing 166 funds and 652 assets across 70 countries for a total gross asset value of approximately $1.7 trillion.

“Roughly 48 percent of participants set short-term GHG targets, compared with 35 percent in 2021”

GRESB members continue to deepen their data coverage, providing more robust reporting across diverse issues, from conventional challenges such as reporting air pollution, which saw an 11 percent increase in reporting, to emerging issues that are ever more central to ESG action, such as biodiversity and habitats, which saw a
17 percent increase in reporting.

Climate has been a major focus of work for GRESB and the industry, as demonstrated by the record number of entities setting greenhouse gas emission targets this year. Roughly 48 percent of participants set short-term GHG targets, compared with 35 percent in 2021. The leaders are social infrastructure, network utilities and transportation: those sectors have the highest percentage of assets with GHG targets, with a coverage of 69 percent, 54 percent and 49 percent, respectively.

Although the environment often dominates conversations about ESG, GRESB and its membership are equally focused on social aspects. On key social metrics such as diversity, equity and inclusion, the gender split across all employees remained constant in recent years, at 40:60 female to male at the fund level. At the asset level, the benchmark average is less balanced, at 30:70. This has improved from the 25:75 ratio of two years ago, however.

In terms of scoring, EMEA remains the best performing region in 2022 for both infrastructure assets and funds, with Oceania in second place and the Americas in third. EMEA is also the most represented region for infrastructure assets, with 342 assets, marking a 12 percent increase this year. We have also seen significant regional growth in asset participation this year in Asia (64 percent) and the Americas (26 percent).

Sector-wise, data infrastructure led asset participation growth with a 35 percent increase, followed by transportation (27 percent) and renewable power (23 percent). Network utilities is the best performing sector in 2022, with an average GRESB score of 85 out of 100, while social infrastructure emerged as the most improved sector, with a 19 percent score increase.

The continued uptake and improving performance of infrastructure participants is a strong signal that the industry as a whole is beginning to make ESG considerations mainstream in their investment strategies and operational plans. At GRESB, we work closely with the industry to evolve our standards and products so that they remain at the forefront of ESG reporting and reflect the latest key issues and trends, in order to support the industry on its journey to sustainability.