2-infra challenge presents its initial findings on 2°C infrastructure alignment at Paris InfraWeek and expands its consortium of sponsors

Press Release

The “2-infra challenge” project aims to provide investors and infrastructure managers with shared tools to address the challenges posed by climate change.

2-infra challenge will present its initial findings on 2°C portfolio alignment during Paris Infra Week.

During Paris InfraWeek, the organizers of the 2-infra challenge presented the initial findings on the 2°C alignment of infrastructure portfolios at an event co-organized by Carbone 4 and the French Asset Management Association (AFG).

Carbone 4 presented its methodology for assessing the 2°C alignment of assets and portfolios. Initial results were presented for a 15-year 2°C-aligned portfolio of European brownfield infrastructure assets.

This is a world first. In particular, the methodology makes it possible to assess the carbon performance of each asset relative to the carbon performance of the usage trajectory it supports (long-distance transportation, heat, electricity, etc.). Portfolio-level consolidation is proposed, enabling an assessment of overall alignment through the sectoral and geographic weighting of assets as well as their individual carbon footprints. This tool will enable a 2°C alignment assessment, the creation of 2°C-aligned funds, and the implementation of action plans to improve the performance of existing portfolios while reducing exposure to stranded assets. This methodology directly addresses the requirements of Article 173-VI.

The method’s long-standing sponsors (the French Development Agency, La Banque Postale Asset Management, EIT Climate KIC, and Meridiam) presented their vision for this methodology and the practical applications of a portfolio alignment tool within the context of investment strategies.

Expansion of the Sponsorship Consortium

Carbone 4 and the study’s long-standing sponsors—AFD, LBPAM, EIT Climate KIC, and Meridiam—are pleased to welcome a new sponsor: Generali Global Infrastructure, an infrastructure debt management firm.

A description of each sponsor is provided below.

About the 2-infra Challenge

"2-infra challenge" is a new assessment method led by Carbone 4 that measures the alignment of infrastructure with a 2-degree pathway and the climate risks to which assets are exposed. This project is supported by major players in the infrastructure sector: Agence Française de Développement (AFD), La Banque Postale Asset Management, EIT Climate KIC, Generali Global Infrastructure, and Meridiam. The alignment scenarios are developed collaboratively with Enerdata.

To achieve the goals of the Paris Climate Agreement, it is essential to redirect funding on a massive scale toward infrastructure that will enable the low-carbon transition. The infrastructure choices made today determine the amount of greenhouse gases that will be emitted as a result of their use over the course of decades following their construction. Furthermore, Infrastructure is highly vulnerable to the risks posed by climate change, including physical risks and transition risks, which can cause them to lose value.

To align their investment strategies with a 2-degree pathway and to manage climate risks, infrastructure finance stakeholders need operational and shared tools. The method “2- Infra Challenge” will enable infrastructure investors to answer two questions:

• Is my investment strategy aligned with the 2-degree goal, and how can I set it on the right path to achieve that goal?
• To what extent are my assets exposed to climate risks, particularly transition risks and physical risks?

This multisectoral and multigeographic methodology can be used by all stakeholders involved in infrastructure investment and financing. Launched in October 2018 as part of Paris InfraWeek, the development of the methodology addressing these two challenges will continue through June 2020.

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About

About the French Development Agency

As a public and socially responsible financial institution, AFD plays a central role in France’s development policy. It is committed to projects that tangibly improve the daily lives of people in France’s overseas territories as well as in developing and emerging countries, in accordance with the Sustainable Development Goals (SDGs) and the priorities of France’s foreign policy. With a presence in 109 countries through a network of 85 offices, AFD currently supports more than 3,500 development projects.www.afd.fr

@AFD_France - @AFDOfficiel - https://www.linkedin.com/company/agence-francaise-de-developpement/

About La Banque Postale Asset Management:

With aggregate assets under management (LBPAM-Tocqueville Finance) of 233 billion euros as of June 30, 2019, La Banque Postale Asset Management (LBPAM) is the fifth-largest French asset management firm.

Since June 2018, LBPAM has been the majority shareholder of Tocqueville Finance.

A subsidiary owned 70% by La Banque Postale, 25% by Aegon AM, and 5% by Malakoff Médéric, LBPAM offers, through its Private Infrastructure Debt business, diversified debt investments in European infrastructure assets. Since 2013, the team has invested more than €1.4 billion across over 33 projects. In line with LBPAM’s commitment to 100% SRI by 2020, the Private Infrastructure Debt team places great importance on integrating ESG criteria into its investment process. http://www.labanquepostale-am.fr/

https://www.linkedin.com/company/lbpam/

About Carbone 4

Led by Alain Grandjean, Jean-Marc Jancovici, and Laurent Morel, Carbone 4 is an independent consulting firm and a leader in climate strategy, energy transition, and climate change adaptation. Our team supports public and private sector stakeholders in the transition to a low-carbon economy that is resilient to climate change.www.carbone4.com

@Carbone4  - http://www.facebook.com/fr.carbone4- https://fr.linkedin.com/company/carbone-4

About EIT Climate KIC

EIT Climate-KIC is a European knowledge and innovation community working to accelerate the transition to a zero-carbon economy.  Supported by the European Institute of Innovation and Technology, EIT Climate KIC identifies and supports innovation that helps society mitigate and adapt to climate change. EIT Climate KIC believes that a decarbonized, sustainable economy is not only necessary to prevent catastrophic climate change, but also presents a wealth of opportunities for business and society.

www.climate-kic.org/

@ClimateKIC  - https://www.facebook.com/ClimateKIC/https://www.linkedin.com/company/climate-kic/

About Generali Global Infrastructure

Generali Global Infrastructure (GGI) is the Generali Group’s asset management company specializing in infrastructure investments. Currently managing more than one billion euros in assets under management, GGI was founded through a strategic partnership between Generali and three founding partners with expertise in this asset class: Philippe Benaroya, Alban de La Selle, and Gilles Lengaigne. This initiative was driven by the desire to offer innovative governance and investment solutions within the framework of the group’s multi-boutique platform.

GGI is backed by a leading insurance sponsor, which helps align the group’s interests with those of third-party investors; it has a broad scope of sectoral and geographic investments; a governance structure that ensures the company’s independence in management; and a founding principle: to act as a responsible investor that balances financial and non-financial performance.

About Meridiam:

Meridiam was founded in 2005 by Thierry Déau, based on the belief that aligning the interests of the public and private sectors could provide decisive solutions to the community’s collective needs. Meridiam is an independent “mission-driven” investment firm specializing in the development, financing, and management of public infrastructure projects on a long-term and sustainable basis. With offices in New York, Paris, Toronto, Luxembourg, Istanbul, Vienna, Addis Ababa, and Dakar, Meridiam currently manages €6.2 billion in assets, and more than 70 projects are in the development, construction, or operational phases. www.meridiam.com

@Meridiamhttps://www.linkedin.com/company/meridiam-infrastructure