Secure income assets: lifting the lid on ESG integration
As demand for investments in the private market continues to grow, there is an ever-increasing interest in considering environmental, social and governance (ESG) factors to promote greater transparency, for better risk management and to aim to deliver long-term value.
Integration of the principles of responsible investing in public equity and credit portfolios is increasingly improving – despite the myriad ways of doing so – as ESG data become more standardised and transparent. Private assets, however, could appear by definition to present challenges to responsible investors, due to the different nature of that market.
In this paper, the latest in a series on responsible investing, we look at how long-term investors can incorporate ESG analysis to optimise portfolio risk within secure income assets – infrastructure debt, private corporate debt and real estate debt. We also offer real-world examples and consider future developments in this exciting and under-explored area.