ESG reporting frameworks in infrastructure sector remain fractured, new report finds

A survey conducted by Mott MacDonald and KPMG has found almost 40 different environmental, social and governance (ESG) reporting frameworks across the infrastructure sector. Published by Guggenheim Investments and World Wildlife Fund (WWF), the report surveyed both ESG data users and data preparers to explore whether an industrywide standard approach to measuring ESG in infrastructure investment is desired and how it might be achieved.

The study consisted of three major components: a desktop review of existing literature on ESG application in infrastructure development, an industry survey and industry interviews.

The industry survey and interviews focused on identifying the key challenges of infrastructure for ESG data users and data preparers and received 50 responses from across both groups.

“We were able to draw clear conclusions,” said Niniane Tozzi, senior consultant at Mott MacDonald. “There is a desire from the industry as a whole for well-defined and consistent metrics, standards and reporting frameworks for ESG. Clearly, however, we are seeing a growing number of uncoordinated and inconsistent standards emerging.”

The report presents three core conclusions:

1. Current ESG standards and frameworks are not meeting the needs of infrastructure investors.
2. Stakeholders are interested in a standard set of metrics for reporting on ESG.
3. Pressure from investors and mandatory ESG disclosure requirements are identified as the primary mechanisms to improve integration of ESG into infrastructure investments.

This report is the second developed by Mott MacDonald and KPMG in a series sponsored by Guggenheim Investments and WWF on sustainable infrastructure investing. The first report, published in 2020, applied a selection of ESG and sustainability standards to two different operational infrastructure assets: the Yatí-Bodega Road Interconnection in Bolivar, Colombia, and the Carlsbad Desalination Plant in Carlsbad, California.

Mike Isola, President and CEO of Mott MacDonald in North America said: “We’re really proud to have contributed to this continued research and partnership, particularly at a time when sustainable infrastructure development is more important than ever. As designers and users of infrastructure, Mott MacDonald is committed to improving society by considering social and environmental outcomes in everything we do. Helping to advance the discourse around sustainable infrastructure is a crucial part of this.”