CalPERS, AIMCo Among Backers for ESG Infrastructure Benchmark

Some of the world's largest asset owners representing $1.5 trillion in total assets have backed a new standard for assessing sustainability within the asset class.

Major asset owners including the California Public Employees’ Retirement System (CalPERS) and the Ontario Teachers’ Pension Plan (OTPP) have backed a benchmark to measure sustainability of infrastructure investments.

“GRESB has an established and global track record in assessing and evaluating social and environmental factors, which will shed
more light on sustainability considerations for investors.”
The Global Real Estate Sustainability Benchmark (GRESB) Infrastructure will aim to help investors “collect and assess key environmental, social, and governance [ESG] factors, and related performance metrics.”

The coalition backing the benchmark includes CalPERS, Canada’s Albert Investment Management Corporation and OTPP, the Netherlands’ two largest pension managers APG and PGGM, ATP from Denmark, and asset managers Aviva Investors and Mirova. Together the group represents a total of $1.5 trillion.

“GRESB has an established and global track record in assessing and evaluating social and environmental factors, which will shed more light on sustainability considerations for investors,” Ted Eliopoulos, CalPERS’ CIO, said.

GRESB already runs a sustainability benchmark for real estate. It was established in 2009 by Dutch investors—including APG and PGGM—and has the backing of a number of asset managers and owners, notably Norway’s $800 billion sovereign wealth fund.

CalPERS—currently invested in energy, power, water, and transportation sectors within its infrastructure portfolio—said it began exploring sustainability benchmarking with other investors in 2014. It has been involved in GRESB’s work in real estate since 2009.

“Infrastructure is a growing part of our portfolio,” Paul Mouchakkaa, CalPERS’ managing investment director of real assets, added. “This benchmark will give us a tool to integrate sustainable investment considerations into our real assets investment processes in line with our investment beliefs pertaining to the three forms of capital: finance, physical, and human.”

According to the pension plan, ESG factors are especially important considerations for infrastructure investments due to their long-term horizon, fixed location of physical assets, and societal impact.

APG’s Patrick Kanters, managing director of global real estate and infrastructure, added that the GRESB Infrastructure benchmark “provides insight, allows us to measure progress, and gives us the means to engage with our investee funds and companies.”

The initiative is expected to complete in early 2016.

Related: The Capitalists’ Guide to ESG & The ESG Takeover

By Sage Um

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