Investments in real assets are valued for providing diversification benefits, inflation protection, and stable yield—they also have the potential to be part of the solution to some of our most urgent global challenges.
“Our world is facing three pressing global challenges: the climate emergency, the loss of nature and growing inequality. Each of them, on its own, can endanger the safe operating space for humanity and the planet, as well as the license to operate for business.”
“Time to transform,” World Business Council for Sustainable Development, March 25, 2021.
Real assets have long been recognized for their investment merits. More recently, we’ve seen accelerated interest in them for another reason altogether: to address global environmental, social, and governance (ESG) challenges. A rare silver lining to emerge from the grueling COVID-19 pandemic may be a heightened awareness of the interconnectedness of these challenges.
We’ve long believed that real assets represent part of the solution to these issues, and our experience of both investing in and operating real assets has allowed us unique insights into understanding material ESG considerations over extended time horizons. Real assets such as agriculture, timberland, and real estate innately contribute to meeting basic human needs for food, materials, and shelter, while infrastructure contributes to essential water, energy, and transport services. We believe these asset classes can play a critical role in addressing these important issues—climate change, nature loss, and rising inequality.
