Decarbonizing infrastructure critical to zero-emissions goals

With infrastructure responsible for 79% of global greenhouse gas (GHG) emissions, we can’t reach climate targets without decarbonizing infrastructure. Yet, too few infrastructure assets have zero-emissions targets – especially outside of renewables

There is growing momentum to set zero-emission targets in the renewable sector
The number of renewable assets setting zero-emissions targets has been trending up since 2019. GRESB data show 39% of renewable assets now have zero-emissions targets. Other infrastructure sectors have made progress toward climate targets but have been less able than renewables to commit to zero-emissions targets. Only 9% of transport assets, 7% of social infrastructure assets, and 7% of water infrastructure assets currently have zero-emissions targets.

The long-term infrastructure plans and investment priorities of governments similarly focus on renewables as a key first step on the path to net zero. In a 2022 review of G20 countries’ long-term national infrastructure plans, other transition pathways, like technological carbon removal and reducing the carbon intensity of material production, were found to be less developed.

The implication is that outside renewables, the path to net zero and the assets that will bring us there are less clear – for governments as well as asset owners and operators.

Private investment is critical to decarbonize other infrastructure sectors
G20 countries have signaled their intention to further develop robust and comprehensive plans to meet climate targets. Private investment will be essential to execute these plans, ‘green’ all infrastructure sectors, fill gaps in critical infrastructure, and build resilience. At the same time, asset owners and operators have been put under increased regulatory pressure to set zero-emissions targets.

But even as private investment in infrastructure reached a record high in 2021, driven mostly by renewables, overall private investment in infrastructure has been stagnant for nearly a decade. Furthermore, the infrastructure investment gap has grown to $3tn annually. To fill that gap, not only does private investment need to increase, but decarbonization frameworks also need to enable capital to flow to all infrastructure assets, even those that haven’t been decarbonized or will be difficult to decarbonize. 

Stronger consensus on portfolio-level targets will be crucial for driving investment across sectors
Reaching consensus on portfolio-level targets for infrastructure is complex, due to the diverse range of asset classes in infrastructure investments. However, this consensus is urgently needed, because alignment on these targets will significantly help direct investment flows towards a more sustainable and resilient future.

About
Marie Lam-Frendo leads the G20’s Global Infrastructure Hub, which collaborates across the public and private sectors to produce data, knowledge tools, and programs that advance sustainable infrastructure development. Previously, she was the Head of Asia-Pacific for Acuity and Head of the Infrastructure Initiatives department of the World Economic Forum.

Joss Blamire is Director of Infrastructure at GRESB. GRESB's mission is to assess, score, and benchmark Environmental, Social, and Governance (ESG) performance, providing standardized and validated data to the capital markets. Joss has 14 years of professional experience as an expert advisor on ESG and infrastructure development with a focus on real assets and renewable and low-carbon energy