Building retirement savings while preserving community trust
In the investment community, we deal with myriad risks every day and they frame our decisions. In many cases, however, it’s only when an investment goes wrong that its risks are revealed and articulated. If an investment makes a poor return or if there is a major financial crisis, the community wants answers and eventually the risks that were being taken come to light. These become “learning moments” for the community as people come to understand more about what institutional investors are doing with their money.
Managing a major community infrastructure asset necessarily involves understanding all the risks facing that business, such as climate, reputation risk, labour issues, supply chain issues, demographic shifts, health and safety risks, workforce management issues, geopolitical and government policy risks, to name a few.
For institutional investors who invest in essential community infrastructure assets, there is a dual responsibility to end-investors as well as the community. Global infrastructure investors – who in many cases also assume responsibility for the day-today management of infrastructure assets – need to consider and manage risks in multiple communities and jurisdictions. We believe being able to understand and anticipate the community’s implicit expectations about how they should invest in and manage community infrastructure assets is key to enabling them to make the investments successful and to maintaining their social licence to operate. It’s essential for infrastructure investors to earn and maintain community trust.