The project will use machine learning to create new datasets on ESG risks and their impacts on infrastructure investments with the ultimate goal of developing an infrastructure social acceptability index, as well as measures of economic impact and of the climate risk exposure index of infrastructure assets.
Natixis is looking to stay ahead of the curve as the French bank teams up with EDHECinfra, a France-headquartered academic research organization that provides a standard reference for infrastructure investment performance, to evaluate the impact of ESG (Environmental, Social, Governance) factors on infrastructure investments by creating an infrastructure benchmark.
The partnership has led to the launch of a new three-year research chair, directed by the same team that created an unlisted infrastructure indexing platform, with the aim of creating useable, comparable documented measures of the impact and risk profile of social and environmental factors on infrastructure investments.
Referring to measures of sustainability and ethical impact of an investment in a company or business, ESG has risen to prominence in today’s financial world, but few holistic and systematic measures exist to help investors to track ESG outcomes and related risks. The Research Chair will aim to produce a comprehensive but compact analysis of ESG reporting standards, taking the perspective of infrastructure companies and aiming to provide an exhaustive set of potential ESG impacts and risks.
Frederic Blanc-Brude, director of EDHECinfra, commented: “Infrastructure investments have value because they are useful over long periods of time. Social and environmental factors significantly impact this long-term value, but today we do not know how or on what scale. We can build a new area of applied knowledge, combining existing datasets with new ones created using artificial intelligence, and drawing on the depth of knowledge on infrastructure assets and investment shared between EDHECinfra and Natixis.”.
Anne-Christine Champion, Global Head of Real Assets, Corporate & Investment Banking at Natixis, said:
“We want to determine what impact better-designed, more resilient infrastructure can have, both for the economy and for investors, focusing on first-order problems like climate risk and social
acceptability over the life of these investments. Ultimately, the understanding of these issues will impact investors’ selection criteria and the prudential treatment when investing in the asset
class.”.
Last year, Natixis joined R3’s blockchain-based trade finance network Marco Polo which aims to provide a trade and supply chain finance platform built on distributed ledger technology. The second-largest banking player in France is now grouped together with some of the leading banks in the world, including BNP Paribas, Commerzbank, ING, Standard Chartered Bank, Bangkok Bank, SMBC, DNB, and OP Financial Group.
