NEW REPORT | Global Risks for Infrastructure – The Climate Challenge

GIIA, in partnership with Marsh & McLennan, is pleased to release the second in a three part analysis of global risks for infrastructure investors. Looking at the Climate Challenge, this report discusses the specific risks to infrastructure investors under each of the key risk categories outlined by the Task Force on Climate-related Financial Disclosures, as well as crucial levers for achieving climate resilience at both the portfolio and asset level for the infrastructure sector.

Click the image below to read Global Risks for Infrastructure – The Climate Challenge

Physical risks related to climate change are becoming a crucial risk category for infrastructure owners and operators. Natural disasters are already a leading cause of infrastructure disruptions in high-income nations, and climate change is expected to exacerbate these disruptions. In addition, increased urbanisation is heightening concentration of infrastructure assets in high risk areas.

Applying the three mutually reinforcing levers discussed in this report can provide infrastructure investors with a launchpad for developing a dynamic and future-ready climate resilience strategy.

 

The first instalment of this series illustrated the risk landscape for infrastructure with the release of the 2020 Global Risks for Infrastructure Map while the upcoming final instalment will explore the impact of transformative and disruptive technological innovations on the infrastructure sector, with an expected release in Q4 2020.

GIIA Members’ Assets Exceeds $750bn

The 2020 edition of the GIIA / EY Global Asset Database reveals that GIIA members assets under management has exceeded US$780bn – comprising more than 1,500 assets across 55 countries.

This is an increase of more than £120bn since 2018/19.

The GIIA / EY Global Asset Database shows that GIIA members own, operate and invest in:

  • More than 100 airports serving more than 1 billion passengers annually
  • Utility companies serving 86.3 million customers
  • 321 ports moving more than 500m tonnes of cargo
  • 56,100MW of wind power, 18,600MW of solar power and 12,400MW of hydro power and biomass

CLICK HERE TO VIEW THE 2019/20 GIIA / EY GLOBAL ASSET DATABASE FACTSHEET

Speaking on the release of the GIIA / EY Global Asset Database CEO Lawrence Slade said the results showed the value of private investment in infrastructure.

“At a time when Government balance sheets are under enormous pressure, the private sector has the available capital, experience and innovative ideas to deliver the environmental and socially responsible infrastructure needed for future generations.”

GIIA’s global membership has also continued to increase in 2019/20 with the addition of members from across traditional markets as well as Japan and India.

 

GIIA is grateful to EY for their support in putting together this information.

 

New Blog: Fight for net zero goes on, despite crisis

Writing for Utility Week CEO Lawrence Slade says even in these difficult times, utilities must continue to focus on the need to reduce emissions and the shift to a zero-carbon economy.

Our lives have changed completely in the space of just a few short weeks. Perhaps, in terms of how we work and manage our lives, things will never quite go back to normal, with more flexible working across thousands of roles and companies becoming the norm.

Uniquely, everyone in the country is affected. This will bring many challenges, not least to the National Health Service, whose staff deserve our heartfelt thanks for their amazing efforts, but also to those working to ensure the essential infrastructure that we all rely on, including electricity, gas, water, broadband and tele­coms networks, remains operational over this difficult period. The robustness of our utilities is something that, as a sector, we should be proud of.

But while it is understandably difficult to look beyond the next few weeks, we must. The underlying issues we faced before the Covid-19 crisis remain. For many reasons it is a blessing that we are emerging from winter, with the warmer weather able to bring respite on a number of fronts.

While this is welcome, many of our properties are still poorly insulated and thousands of families are living without modern levels of comfort. Furthermore, reduced incomes and sudden bill shocks as a result of economic volatility will not help, making it certain that many families will need further short-term help to manage debt in the coming months, as well as long-term solutions such as the provision of energy efficiency. Linked to this, of course, is the need to reduce our emissions and the longer-term move to a zero-carbon economy. The urgency to act is still there.

To meet the challenge of climate change, we know that many billions of pounds need to be invested in our infrastructure over the coming decades. Unfortunately, time is not on our side.

The chancellor’s moves to support the economy will provide vital respite for many businesses and families and will need to continue for some time. But, as has happened at other times of national emergency, it is important that we also look ahead to the future. We need to look at how we will get our economy moving again and how we invest in our communities to ensure value is created for all stakeholders.

Before the crisis hit, 2020 was, as the National Infrastructure Commission said, shaping up to be a year of decisive action. Reports suggested that the budget would give long-awaited clarity on infrastructure investment, building on the announcements in November that laid out how much money was to be invested in our infrastructure and how that could be split between the private and public sectors.

This was to be seen as a new start, with investment expected to be made in infrastructure projects across the UK – part of the process of “levelling up” our society away from an historical focus on investment in the South.

Moves to allow onshore wind and solar projects to bid in the contracts for difference auctions were welcome, likewise the move to speed up the roll-out of fibre-optic cabling for better broadband connectivity, but we need to keep the momentum going.

Addressing climate change, making the investment in new – and upgrading existing – infrastructure and delivering a clean, carbon-free economy is something that future generations will thank us for. When we surface from the current crisis, we have the opportunity to reset society’s relationship with the built environment and pull the country together.

Combining government funding with that available from the private sector will allow us to achieve much more, much faster. Utility projects do not happen overnight; rather they take years of planning and building before delivery. As a country, whether it is across our energy, water or telecoms networks, we need to plan and to act to ensure that the right long-term strategy is in place.

A strategic dialogue between government, devolved administrations and the private sector will ensure that private capital is deployed where it is most needed to aid economic recovery. To be absolutely clear, the government’s immediate priority must be to respond to the health crisis by ensuring our hospitals and hard-working staff are provided the necessary equipment needed to save lives.

But at the same time, working together we can begin the important job of delivering the infrastructure needed to propel the country’s economy.

Private investors stand ready with capital to deploy to support these public sector-led initiatives, as well as offering unrivalled expertise in project management and delivery.