GLIO and GRESB team up to launch specialist ESG-filtered listed infrastructure index
The Global Listed Infrastructure Organisation (GLIO), the representative body for the listed infrastructure asset class, GRESB, the Environment, Social and Governance assessment and benchmark specialist, and Global Property Research (GPR), have launched the GLIO/GRESB ESG Index.
The index boosts the specialist offering of the parent GLIO Index, whose principles are to capture companies engaged in activities critical for the day-to-day functioning of society and the global economy. The index arrives at a key juncture when investors are increasingly aware of the importance of coherent climate and ESG goals. It will:
• Expand upon the parent GLIO Index
• Use GRESB’s annual infrastructure Public Disclosure scores to weight constituents
• Be managed by global real assets index specialist GPR, registered under EU Benchmark Regulations (BMR)
To enter the GLIO index, companies must derive 75 per cent of EBITDA from the following infrastructure groups: Energy Transportation & Storage, Communications Infrastructure, Transportation, Renewable Energy and Regulated Network Utilities. The GLIO Index eligible infrastructure sectors are based on the broader industry standard EDHECInfra TICCS® classification system.
The GRESB Public Disclosure offers investors a unique tool to evaluate the transparency of sustainability disclosures as seen on the websites, sustainability reports and annual reports of infrastructure companies in the GLIO Index. The evaluation covers:
• sustainability governance,
• sustainability implementation,
• operational performance data, and
• stakeholder engagement practices.
Each constituent is scored on the above areas and the scores combined are applied in a 10 per cent banding system to calculate a final weight in the index. Scores are updated in November on an annual basis.
The GLIO/GRESB ESG Index can serve as the basis for institutional asset mandates and exchange traded funds (ETFs). In addition, GPR has 25 years-experience in index customisation which enables investors to tailor their investment strategies while using the GLIO/GRESB ESG Index as the backbone.
The index also provides an essential tool for investors to engage with constituent companies on improving public disclosure and transparency going forward.
The GLIO/GRESB ESG Index is the first ESG focused index in the listed infrastructure space.
Manoj Patel, Chairman of the GLIO Index Committee, says: “The launch of the GLIO/GRESB ESG Index is leap forward in the sophistication of the asset class, aimed at encouraging better ESG disclosure. We see this as a move towards better ESG engagement with companies, enabling investors to benchmark through an ESG lens.”
Fraser Hughes, GLIO Chief Executive, says: “Building on the parent GLIO Index and leveraging the experience of real assets ESG assessment specialist GRESB, puts us in a unique position. The GLIO/GRESB ESG Index is infrastructure focused, infrastructure backed and produced for specialist infrastructure investors, which means future developments are tailored to their needs. This is critical for the asset class to move forward in a representative and timely way.”
Sander-Paul van Tongeren, CEO GRESB, says: “GRESB is pleased to contribute data on the ESG transparency of listed infrastructure companies for this first of its kind infrastructure ESG index. We anticipate growing interest in ESG data from listed infrastructure companies mirroring what we have seen in the private equity infrastructure space over the last five years.”
Jeroen Vreeker, director at GPR, says: “GPR frequently develops ESG-focused versions of its existing indices. The GLIO/GRESB ESG Index is the first of its kind covering the majority of available market capitalisation in the listed infrastructure space and remains highly diversified across countries and sectors. The GLIO/GRESB ESG Index is a valuable addition to GPR’s suite of tailor-made benchmarking solutions.”