SUSI Partners contributed to a new position paper on impact investing in infrastructure, co-authored with leading institutions under the joint initiative of Bundesverband Alternative Investments e.V. (“BAI”) and Bundesinitiative Impact Investing e.V. (“BIII”).

Donwload the report here:

Impact Investing in Infrastructure

Titled “Impact Investing in Infrastructure: Turning Potential into Practice”, the report explores how infrastructure is uniquely suited for impact investing, defines key components of a credible impact investment strategy, and outlines key challenges as well as potential solutions to help investors align their financial objectives with clearly defined impact goals.

5 Characteristics of Impact Investments

The report defines 5 characteristics that should be integrated into an investment strategy for it to be classified as impact investment. SUSI Partners’ energy transition infrastructure investment strategies exhibit all these characteristics while pursuing attractive risk-adjusted returns:

  • Intentionality: Impact investments must have clear objectives, which are defined before initiation of the investment process. Each of SUSI Partners’ investments is required to lead to a measurable reduction in greenhouse gas emissions compared to a baseline scenario.
  • Impact Management and Measurement (“IMM”): IMM should be integrated throughout the investment process – from sourcing to exit. We assess the potential for avoiding emissions and present it to the respective Investment Committees before closing of transactions. Thereafter, we continuously monitor Potential Avoided Emissions (“PAE”) and report these to clients annually.
  • Significant, Net Positive Asset Impact: The assets we invest in contribute to climate change mitigation by advancing the transition to a low-carbon energy system. At the same time, we ensure that assets “do no significant harm” (DNSH), in accordance with SFDR and EU Taxonomy requirements.
  • Significant, Net Positive Investor Impact: We specialise in investing in less contested segments of the mid-market where we do not only fill gaps in capital availability but also actively shape investee companies, collaborating closely with management teams and supporting them with our longstanding experience and expertise.
  • Financial Return: Achieving attractive risk-adjusted returns is the foundation of our business and is in no way inhibited by our pursuit of impact objectives. On the contrary, the contribution of our investments to a sustainable future enhances the long-term performance of our investments.

Challenges of Impact Investing in Infrastructure

While infrastructure investments are well suited to achieve a positive impact to complement financial returns, challenges related to measurement and reporting the achieved impact remain.

First, infrastructure’s broad diversity across sectors and project types makes standardised impact measurement difficult and often too generalised to be meaningful, requiring tailored and resource-intensive approaches. At SUSI, we have developed project type-specific methodologies in line with established reporting standards to quantify Potential Avoided Emissions (“PAE”) of our investments. The methodologies have been developed with the inputs of a specialised consultancy, which also reviews and confirms the PAE we report on an annual basis.

In addition, there remain questions around fair attribution of the achieved impact between the parties involved in a project. The long development timelines and steep upfront capital requirements typical of infrastructure projects create a disconnect between early financial commitment and the delayed realisation of measurable impact. Early-stage activities, which are essential to achieving long-term outcomes, are not sufficiently recognised by regulatory frameworks such as the Sustainable Finance Disclosure Regulation and the EU Taxonomy. The variety of financing structures across equity and debt add further complexity to attributing achieved impact to involved parties while avoiding double counting.

Regulatory Proposals

To fully harness infrastructure’s potential for impact investment, the report calls for investment strategies with clear, pre-defined impact objectives underpinned by rigorous impact measurement and management throughout the asset lifecycle. In addition, it proposes several policy reforms: Explicitly including development stages in the EU Taxonomy; harmonising the definition of impact investing across the EU; creating a dedicated impact investing product category within SFDR; and recognising infrastructure as a distinct asset class within sustainable finance regulation. As the authors argue, these steps could significantly help unlock greater capital flows into infrastructure and support broader sustainability goals in Europe and beyond.

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The information provided does not constitute an offer or invitation to acquire or sell any service or product referred to. Nothing contained herein should be deemed to be a prediction or projection of future performance of any investment or product. Past performance is not a guide to current or future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed.

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