Though the ESG movement began more than a decade ago, there is increased momentum in the drive toward a low carbon future. Today, ESG investing is estimated at over $20 trillion AUM and is rapidly growing. There is greater awareness of how integrating ESG principles into investment portfolios  is not only good for society but good for business as well. 

Continued declines in renewable energy and battery storage costs have been major stimuli behind the projected shift from two-thirds fossil fuel-based energy in 2018 to two-thirds zero carbon energy by 2050. On the consumer side, there is heightened awareness of climate change, leading to greater interest in environmental stewardship. The electric vehicle market, for example, is projected to grow from 1.7M in 2020 sales to 8.5M by 2025, reflecting changing consumer preference and improvements in price and performance. The COVID pandemic has exerted additional pressure on corporations and institutions to accelerate their transition to sustainability in the interests of public health and safety. These dynamics make sustainable infrastructure an attractive sector that will jump-start economic growth, create jobs, provide environmental and social benefits. 

For investors, sustainable infrastructure returns have a low correlation to the equity markets, and thus offer an opportunity for portfolio diversification. Given growth of this asset class, there is an expanding universe of financial sponsors and strategic buyers to support successful exits.