September 23, 2020
Guggenheim Launches Sustainability Quotient Research Studies to Advance Institutional Investment in Sustainable Infrastructure
NEW YORK, NY – Guggenheim Investments, the global asset management and investment advisory business of Guggenheim Partners and a leading proponent of sustainable infrastructure investing, today announced the launch of three research reports commissioned to advocate the adoption of common standards and tools necessary to advance investment in the sustainable infrastructure asset class. The analyses were conducted in collaboration with Tufts University, Global Infrastructure Basel Foundation, KPMG, Mott MacDonald, and World Wildlife Fund (WWF).
“The visible impact of climate change, COVID-19, and social inequality have made it clearer than ever that sustainability is an imperative,” said Scott Minerd, Chairman of Investments and Global Chief Investment Officer at Guggenheim Partners. “A strong understanding of measurement tools and standardization is necessary to unlock the institutional capital which will be required to fill the estimated $3 trillion shortfall required to accomplish the objectives of the United Nations Sustainable Development Goals (SDGs). The recommendations made in this research will move us closer to the adoption of universal standards for measuring the environmental and social impact of infrastructure.”
The series of studies respond to several important practical barriers to sustainable infrastructure investing at a pivotal moment for both the environment and investors. There is growing interest among institutional investors, asset managers, developers, and the public sector in infrastructure investments as a class of long-term assets as well as to expand the proportion of capital devoted to sustainability goals alongside financial returns. Facilitating such investments should help fill the enormous global infrastructure spending gap—unlocking economic, environmental, and social benefits for society while helping achieve the SDGs by 2030.
The first study, a collaboration with The Fletcher School of Law and Diplomacy at Tufts University, analyzes the social dimensions of infrastructure investing by identifying, defining, and comparing the wide range of emerging practices used to address the issue of risk and impact evaluation. “While there is still work to be done, our research is moving the needle on understanding metrics and deploying best practices in an area that’s critical to the advancement of sustainable infrastructure, " said Patrick Schena, Adjunct Assistant Professor of International Business Relations at The Fletcher School. As a follow-up to the study, Guggenheim plans to continue identifying tools to measure the social impact of infrastructure—equipping institutional investors with the information they need to feel confident these assets are contributing to the achievement of social goals.
The second study, prepared with the Global Infrastructure Basel Foundation (GIB), analyzes the pre-construction-phase of a transformative automated air cargo facility that introduces new standards within the global logistical supply chain. It applies the SuRe® standard, a certification system that promotes sustainable and resilient infrastructure. The report determines if the project is compliant with the criteria for certification. “We are demonstrating the benefits to project developers and investors of going beyond regulatory requirements to make assets more sustainable during a critical moment for the climate, biodiversity, social equality, and investments,” said Louis Downing, CEO of GIB. The report furthers the application of the SuRe® system in the field of sustainable infrastructure.
All three studies build on a 2018 report, supported by Guggenheim in collaboration with WWF and conducted by the Stanford University Global Projects Center, which examined the state of the practice for sustainability metrics and standards to define and measure infrastructure projects. The final study is a direct follow-up to this analysis, again done in collaboration with WWF along with KPMG and Mott MacDonald, and it evaluates the application of several leading sustainability standards on two real-world infrastructure development projects: the Yatí-Bodega Road Interconnection in Bolivar, Colombia and the Carlsbad Desalination Plant in Carlsbad, California, USA. “The enormous public funding being committed to Covid-19 responses makes it more important than ever to ensure that investments accelerate sustainable infrastructure. The world needs projects that expand low-carbon energy and transport, arrest forest loss, and build community resiliency. Doing this will require strong planning and recognized standards, supported by public policies, in order to maintain momentum towards achieving the SDGs in the face of the Covid-19 crisis,” said Carter Roberts, President and CEO of WWF.
Guggenheim is at the forefront of the sustainable infrastructure movement and a leading voice driving its evolution into an institutional asset class. The three new studies grew out of Guggenheim’s Sustainability Quotient, a research-driven framework for transitioning sustainable infrastructure into an institutional asset class. Guggenheim developed the Sustainability Quotient in partnership with the world’s foremost academic institutions and infrastructure firms. The Quotient identifies the four characteristics that a sustainable infrastructure project must possess before institutional capital would be committed—financial return, positive social impact, environmental responsibility, and strong governance. While the three studies show some movement towards internationally accepted norms for assessing and defining sustainable infrastructure, further urgent work is still needed. For more information visit https://www.guggenheiminvestments.com/firm/sustainable-investing-esg/guggenheim-sustainability-quotient.
About Guggenheim Investments
Guggenheim Investments is the global asset management and investment advisory division of Guggenheim Partners, with more than $220 billion¹ in total assets across fixed income, equity, and alternative strategies. We focus on the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. As a global asset manager, Guggenheim Investments seeks to deliver exceptional, long-term value to its clients while managing its business with strong governance, sustainable business practices, and a workplace built on respect and community engagement. Its work in pursuing sustainable development goals seeks to advance safe, reliable infrastructure and financing innovation in ways that preserve and protect the environment and contribute to a better world.
1Guggenheim Investments assets under management are as of 6.30.2020. The assets include leverage of $13bn for assets under management. Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, GS GAMMA Advisors, LLC, and Guggenheim Partners India Management.
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