The Four Attributes of the Guggenheim Sustainablity Quotient: Financial Return

A project’s investment proposition must meet the hurdle return rates needed to fund long-term liabilities.


For sustainable development investing to flourish as an institutional asset class, the project’s investment proposition must meet the hurdle return rates needed to fund long-term liabilities. We believe infrastructure investment can help institutional investors reach their goals. Some of the potential benefits include attractive risk-adjusted returns, low correlation to other asset classes, stable cash yield, long-lived physical assets, barriers to entry for competitors, and a measure of inflation protection.

The shift that is occurring in infrastructure investment and project finance is profound: No longer will investors have to make a trade-off between sustainability characteristics and financial returns.

Within the context of a global consensus for sustainability, long-term investors can maximize value by delivering sustainable infrastructure solutions, which may reduce risk, and enhance political and social feasibility. As public interest in the sustainability of future infrastructure development grows, lack of consideration for a project’s sustainability may even hurt long-term financial returns. The cost of remediation—reverse-engineering a project to address overlooked sustainability issues—can be much higher than meeting sustainability standards from the project’s inception, again threatening the long-term profitability of a project.

As more institutional investors build such factors into their analysis and begin to allocate more of their long-term investments to sustainable development, financing will increasingly depend not only on the health of the environment or community in which the development is taking place, but on the long-term health of the development itself. It will be incumbent on project planners, sponsors, and stakeholders to ensure that the sustainability of a project is also viewed through the perspective of delivering institutional-class returns on long-term investments.

 


Sustainablity Quotient

Good Governance

Sustainablity Quotient

Environmental Soundness




Investing involves risk, including the possible loss of principal. Infrastructure investments may be subject to a variety of risks, not all of which can be foreseen or quantified, including operating, economic, environmental, commercial, currency, regulatory, political and financial risks. Investing in a specific sector such as infrastructure is more volatile than investing in a broadly diversified portfolio, as there is a greater risk due to the concentration of holdings in issuers of similar offerings. Sustainability requirements, including environmental, social, and governance (ESG) obligations may limit available investments, which could hinder performance when compared to strategies with no such requirements.




Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.

Investing involves risk, including the possible loss of principal.

Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Funds Distributors, LLC, GS GAMMA Advisors, LLC, Guggenheim Partners Europe Limited and Guggenheim Partners India Management. Securities offered through Guggenheim Funds Distributors, LLC, an affiliate of Guggenheim, SI, GFIA and GPIM.

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