Putting the ‘S’ in ‘ESG’ – investing in social infrastructure

Infrastructure and real estate have long been investment mainstays. They’ve generally been favoured for their strong return potential, diversification from traditional asset classes and income generation. Meanwhile, the focus on responsible investment, especially climate change and the desire to have a positive impact, has boosted interest in these asset classes.

While climate change remains an important issue for investors, many have begun to broaden their responsible investment scope. There’s a growing desire to address the ‘S’, or ‘social’, element of ESG, which had suffered from a perceived lack of suitable investment opportunities.

Key messages in this publication include:

• Many investors have focussed their Responsible Investment efforts on climate issues, with social impact being considered too difficult. Social infrastructure is an asset class with the dual ability of achieving social impact whilst achieving strong returns.

• Social infrastructure is investing in real estate assets that are integral to the functioning of society, supporting the quality of life and wellbeing of communities. Examples include schools, doctors' surgeries and housing.

• With the ability to earn returns and have a positive impact come risks, both financial and non-financial. These must be seriously considered before making an investment

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