08 November 2023
2 mins
Senior Investment Research Consultant
Head of LGPS Investment
Asad Rashid and Iain Campbell explore renewable infrastructure and the energy transition. See our key takeaways below:
Renewable infrastructure – a sub-set of infrastructure – allows investors to target returns with measurable impact while demonstrating environmental, social & governance (ESG) credentials. However, many of the broader infrastructure sector’s risks still apply.
A renewables fund could sit within an investor’s growth allocation or long-term enhanced income allocation. A ‘build new’ strategy fits more naturally in the growth allocation, but a ‘buy and hold’ strategy could fit in the enhanced income element of a broader portfolio.
A dedicated renewable infrastructure allocation can be customised, from focusing on the best mix of global opportunities (diversified by sector and country) to accessing UK-only opportunities (local impact and levelling-up initiatives).
Most of the funds we’ve reviewed provide ESG reporting both quantitatively (e.g. carbon emissions avoided, community payments) and qualitatively (e.g. strong supplier code of conduct, recycling arrangements for end-of-asset life).
If you have any questions on anything covered in this article, please get in touch.
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