IFSWF Santiago Principles

Sustainable Infrastructure Workshop

Background

The Sovereign Wealth Research (SWR) team at IE Business School in Madrid, has been informally engaging with the IFSWF since 2012 on research, analysis and contents. The SWR has attended few of the IFSWF annual meetings in the near past in Doha, Milan and Auckland.

In March 2019, IE SWR with the IFSWF in London shared initial ideas about an IFSWF closed-door workshop on infrastructure focused on sustainability, future developments and innovation.

Rationale

SWFs have grown their exposure to private markets over the last eight years, from just 9% of total assets in 2012 to more than 30% in 2019. This growth in private markets has been led by real estate and infrastructure. Along this process, SWFs have increased knowledge capacity on these asset classes. SWFs have hired and developed talent and established focused investment units on infrastructure.

Also, a growing number of SWFs have co-invested with operating companies, engaging with infrastructure investment global players. Institutional investors have invested heavily in infrastructure during the last five years. By deal count, this figure has steadily grown since 2015. Moreover, SWFs have increasingly joined co-investment schemes of various types when getting exposed to real assets, as preferred to solo investments.

More recently, a rising global interest to tackle climate change-related opportunities and risks is driving institutional investors, including SWFs, in sustainable finance. The combination of these two factors: infrastructure as an asset class and sustainable finance leads to the idea of this workshop.

Aim

The purpose of this document is to outline how the SWR would host an IFSWF workshop on sustainable infrastructure in the first quarter of 2020. The IFSWF Sustainable Infrastructure workshop will bring together SWFs and global infrastructure corporations. The participation of SWFs will bring the long-term investment view of risks and opportunities in the changing needs of sustainable infrastructure. While infrastructure global groups covering various infrastructure niches will bring the conversation to the most updated developments in terms of sustainable infrastructure, covering new forms of transportation, water management and renewable energy. The complexities of managing large infrastructure assets, the legal, regulatory and policy issues, partnership engagement, as well as technical issues, and financial models will be presented with real cases from all over the world.

Learning outcomes

  • To learn from global leaders of infrastructure development and management where the sector is going in terms of sustainability, how are the main risks evolving (regulatory, operational, financial), and how innovation is bringing potential new developments and opportunities.
  • First-hand experiences from global leaders in different infrastructure subsectors (water, transportation, renewable energy) and geographies. And how the combination of different infrastructure sub-niches may result in stronger financial returns for investors and better sustainable outcomes.
  • To understand efficiency gains linked to sustainable infrastructure in terms of reduced use of materials (including embodied carbon considerations), better pollution prevention, lower carbon emissions, and smoother labour and community relations, in line with SDGs.
  • To learn which technologies are framing the evolution of sustainable infrastructure (including lower carbon-emitting materials and processes), and what are the main opportunities and risks attached to such innovation.
  • To understand how regulation and policies will affect sustainable infrastructure in the near future, both in developed and emerging markets.
  • To understand more openly the linkage between SWF long-term missions and sustainable finance and explore and share ways to align them with their risk management profiles.

Draft Agenda

Day One

8.30 Welcome

9.00 Keynote Speech: Opportunities and challenges for returns in sustainable infrastructure.

9.45 Coffee Break

10.15 Workshop 1: Transport (metro, train, toll roads and others: ports, airports): Understanding the new sustainable mobility models.

11.45 Coffee Break

12.15 Workshop 2: Water and carbon management in the 21st century.

13.45 Lunch

15.15 Workshop 3: The challenges of renewable energy infrastructure: Where, how and when to invest?

16.45 Coffee Break

17.15 Keynote Speech: Green regulations framing sustainable infrastructure around the globe.

18.00 Day Ends. Social Event.

Day Two

9.00 Keynote Speech: The future of infrastructure. The impact of technology on sustainability.

9.45 Coffee Break

10.15 Workshop 4: How to identify sustainable projects globally? Partnering and sourcing sustainable infrastructure in an efficient way.

9.45 Coffee Break

12.15 Workshop 5: Financing sustainable infrastructure, green bonds and beyond: Challenges, best practices and new solutions.

13.45 Lunch

15.15 Keynote Speech The geopolitics of global sustainable infrastructure: Current risks and opportunities.

16.00 Concluding Remarks

16.30 End of Event

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