- FAST-Infra (Finance to Accelerate the Sustainable Transition – Infrastructure)1 Sustainable Infrastructure (SI) Label endorsed by groups managing trillions of dollars of assets.
- The SI Label will facilitate faster and more accurate due diligence processes and structuring of investments, thereby reducing transaction costs of sustainable investments.
(Glasgow – 2nd November 2021) The FAST-Infra initiative[1] today launched the Sustainable Infrastructure (SI) Label – a consistent, globally applicable labelling system designed to identify and evaluate sustainable infrastructure assets.
The label will facilitate due diligence processes and structuring of investments for sustainable infrastructure assets, thereby reducing transaction costs. Information on all labelled assets will be readily available to market participants via a data repository2, which will provide a transparent platform for the market to disclose, report, and measure performance of sustainable infrastructure assets over time. This will promote consistent reporting under existing disclosure frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD).
The SI Label has been endorsed by leading coalitions of sponsors and financial institutions who are investors in, and lenders to, infrastructure projects around the world:
- The G20’s Global Infrastructure Facility (GIF)
- The Investor Leadership Network’s (ILN)3
- Glasgow Financial Alliance for Net Zero (GFANZ)4
- Task Forces of the Sustainable Markets Initiative (SMI)5
- Long Term Infrastructure Investor Association (LTIIA)6
- ICLEI – Local Governments for Sustainability (ICLEI)7
These endorsements will help encourage all financial institutions, institutional investors, and development finance institutions to use the SI Label, helping to address the estimated US$2.5-3 trillion annual investment gap for sustainable infrastructure8. This infrastructure gap is particularly critical in emerging markets due to the lack of investable projects and the necessary financial and operating expertise. While institutional investors are keen to invest in sustainable infrastructure that can offer stable, long-term returns, there remains a gap in the market to verify which assets are genuinely sustainable at the asset-level.
HSBC, Group Chief Executive Officer, Noel Quinn, said: “We welcome the FAST-Infra SI label, which gives investors confidence in the environmental and resiliency credentials of new projects, and will help make sustainable infrastructure a deep and liquid asset class. We’re working hard to mobilise finance and accelerate innovation to help our customers decarbonise. This label represents a global public-private partnership to ensure investment is swiftly channelled towards truly sustainable projects.”
Macquarie Group, Green Investment Group, Global Head, Mark Dooley, said: “As a major infrastructure and renewables investor, we see a critical need for this FAST-Infra SI label. This collaboration across banks, governments and multinational institutions will help create visibility and confidence for all stakeholders as we invest together in the journey to net zero; and we believe it can have particular impact in accelerating sustainable investment into emerging economies.”
UK High Level Climate Action Champion, Nigel Topping, said: “One of my objectives as a High Level Champion for Climate Action is to work with the private sector to help bring the very best of their work to Glasgow. I am so pleased that this impressive group of private financial institutions, development finance institutions, NGOs and others have come together to address the important issue of sustainable infrastructure. I am hopeful that the Sustainable Infrastructure Label developed by FAST-Infra will play a catalytic role in mobilizing private capital to finance the development of sustainable infrastructure at scale across the world. Ultimately, COP26 is about each of us, whether public, private or civil society, becoming climate champions and driving the meaningful change needed to reach a zero-carbon future.”
GIF, Head, Jason Lu, said: “The GIF is proud to co-lead the development of the FAST-Infra Sustainable Infrastructure Label alongside Macquarie and HSBC. The Label serves as a practical and catalytic tool – building on months of multi-stakeholder collaboration – that can transform sustainable infrastructure into a liquid asset class. We are pleased to leverage our partnership platform to contribute to this important effort to improve standard-setting for the private sector at this critical milestone.”
LTIIA, Honorary Chairman, Thierry Deau, said: “The FAST SI label is the first comprehensive, global label dedicated to helping investors select and monitor projects meeting sustainability standards in the infrastructure field. It will help develop further the infra asset class, which is necessary to bridge the financing gap that exists, in particular in emerging markets, to tackle climate change at scale.”
ILN, CEO, Amy Hepburn, said: “ILN members are equally committed to ensuring the integrity of their sustainability criteria as they are committed to increasing their involvement in sustainable development. By standardizing sustainable infrastructure criteria, the SI Label can help fast-track investments into credible projects. Our Network welcomes this addition to our sustainable infrastructure toolbox, and we are optimistic about its impact.”
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Notes to editors:
The SI Label aims to increase financing potential, and in turn to motivate governments to design more projects with sustainability criteria at their core, and encourage developers to maintain high environmental, social, governance and resiliency standards at all stages of the infrastructure lifecycle. Project applicants have to declare that their asset satisfies 14 baseline criteria under four dimensions: environmental, social, governance and climate resilience; and demonstrate a positive contribution against one or more of the 14 criteria. Assets should be able to demonstrate compliance with minimum safeguards and risk management requirements and periodically report (as appropriate) on forecast and/or actual sustainability performance. In addition, all SI Labelled assets should provide a statement on consideration of the project’s lifecycle contribution to the transition toward net zero emissions.
A FAST-Infra Technology-Enabled Platform9 is also being conceptualised as a transformational end-to-end financing platform for sustainable infrastructure. With IBM leading the design and development of the platform, the Platform is a collaboration between some of the world’s best technology companies and experts in project finance that aims to have a better, fairer and faster project development, transparent project financing, and efficient risk management practices. The Platform leverages blockchain, advanced analytics and other exponential technologies.
The FAST-Infra Technology-Enabled Platform is a new common data standard and a secure ledger aiming at collecting and managing, transparently and reliably, an unprecedented amount of authenticated data to better deliver sustainable infrastructure for all. The platform will support the development of well-prepared projects, investor matching and eventually seek to facilitate securitisation of infrastructure loans.
A first pilot phase of the tech enabled platform was facilitated by the Sustainable Infrastructure Foundation, during which government agencies from Brazil, Ecuador, Mexico, South Africa, and Uzbekistan created 10 infrastructure projects on SOURCE, and evaluated them against a preliminary version of the FAST-Infra SI Label. The outcome of the piloting was very positive, and led to the publication of close to USD 8 billion worth of investment opportunities for the private sector.
HSBC Asset Management will launch a Sustainable Infrastructure Fund in 2022 and will seek to raise $1bn in assets.
1 FAST-Infra started under the auspices of the One Planet Lab as a collaboration between HSBC, the OECD, the IFC, the GIF and Climate Policy Initiative.A key objective of the FAST-Infra SI Label is to provide consistency regarding the quality and sustainability of assets in the market, drawing in more institutional investors at the post-construction phase and scaling up private financing volumes for suitable projects in emerging markets. For more information: https://www.climatepolicyinitiative.org/fast-infra/
2 Data repository is under development with availability in 2022.
3 ILN members include: Allianz, AIMCo, APG, Ardian, CDPQ, CPPIB, Generali, Natixis, Omers, Ontario Teachers, OPTrust, PGGM, PSP and SSGA. For more information: https://investorleadershipnetwork.org/en/about/
4 GFANZ, The CEO Principals of the Glasgow Financial Alliance for Net Zero, is the global coalition of leading financial institutions committed to accelerating the decarbonisation of the economy, chaired by Mark Carney the UN Special Envoy on Climate Action and Finance and anchored in the UN’s Race to Zero campaign endorse the FAST-Infra SI label. For more information: https://www.gfanzero.com
5 The Sustainable Market Initiative’s Financial Services Task Force, Insurance Task Force, and Asset Owners and Asset Managers Task Force, are supporters of the initiative. For more information: https://www.sustainable-markets.org
6 LTIIA members include: Allianz, Argo, Arjun, Arpinge, BlackRock, CalPERS, CalsTrs, Campbell Lutyens, City Climate Finance Leadership Alliance, CNP, DBJ, European Bank for Reconstruction and Development, EDHECInfra, Edmond de Rothschild, European Investment Bank, ELTI, First Sentier, Global Infrastructure Basel, GPIF, GPSS, Guggenheim, IMAS, Infranode, John Hanock, La Banque Postale, Marguerite, Meridiam, MIGA, TCORP, Palladio, PRO BTP, PwC, Skandia, S&P Global, Stoa, Sunsuper, The City of New York Office of the Controller, TIAA, TIIC. For more information: http://www.ltiia.org/members/
7 For more information: https://www.iclei.org
8 OECD ‘Green Infrastructure in the Decade for Delivery’. Full version accessible here: https://www.oecd.org/environment/cc/policy-highlights-green-infrastructure-in-the-decade-for-delivery-assessing-institutional-investment.pdf
9 Platform collaborators are: IBM, SIF-SOURCE, Scale, EPPF, Infraclear, Liquidnet, Refinitiv, Hitachi, Standard Chartered and HSBC.
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Rachel Chang and Nabhan Malik
Brunswick Group
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