The key role of infrastructure in the environmental transition

“Our goal is to accelerate the transition of infrastructure towards a low-carbon economy through long-term, sustainable and resilient investments so that we can develop a common and sustainable future."

We have all experienced it in the past few months. The summer has been hot and dry all over Europe, causing severe droughts and unprecedent wildfires (seven times more in France and three times more in Europe than 2006-2021 average). Everyone rightly wonders whether these events are just a statistical anomaly or a more acute sign of climate change at work. The science on the topic is unequivocal: global warming is directly linked to greenhouse gas (GHG) emissions coming from human activities that accumulate in the Earth’s atmosphere. These rising temperatures are leading to rapid and dramatic changes in the climate, ecosystems, and ultimately the role that Homo sapiens plays in its environment.

Last February, the IPCC published the second part of its Sixth Assessment Report on climate change. The conclusions are indisputable and the figures alarming. At a global warming level of 2°C by 2100, about 18% of the Earth’s land species could be in danger of extinction, and one out of two species in a 4°C scenario. This would disrupt major ecosystems, putting up to 3.5 billion humans at risk. Human activity is emitting far more greenhouse gases than the planet can absorb. With that in mind, I call on all of us to take urgent action to reduce greenhouse gas emissions and protect ourselves against climate change.

Insfrastructure and decarbonisaton of the economy

Let’s focus on infrastructure. It has a key role to play in the transition to a low-carbon economy. Energy, manufacturing, transport and buildings are currently responsible for more than 85% of CO2 emissions in Europe. A radical change is needed in the way infrastructure are delivering essential services (energy, transport, water, waste, data, etc.). I am convinced of that. So what solutions can we implement to make the transition happen?

• We must shift from energy consumption based mainly on fossil fuels to consumption based more on renewable energy and a circular economy. That means developing renewable (wind, solar, biomass) and low-carbon energy, while adapting grids to new energy mixes that can better adjust to demand and provide more storage (green H2). This transition will also promote the relocation of energy supply and thus increase our energy sovereignty – and security.
• We must also adapt infrastructure to be resilient to the consequences of climate change, i.e. heat waves, droughts, rising waters, storms, etc. But that's not all. This also requires deploying new, more responsible infrastructure, such as clean and smart transport (electric cars, trains and trams for people and freight), and developing the circular economy to manage our water and waste responsibly and sustainably.
• Finally, this transition will not happen without accelerating the digital transformation to foster the development of communication networks accessible to all and to infrastructure, as well as stepping up the transition of industrial processes towards low-carbon solutions and increasing the energy efficiency of buildings.

The state of affairs is therefore clear: this transition can only be achieved by investing massively in sectors that contribute to the decarbonisation of the economy in order to make our communities sustainable and durable, in balance with ecosystems.

We are keenly aware of this at Eurazeo and are strongly committed to the fight against climate change.

Eurazeo and infrastructure for a sustainable future

We have invested in companies from the infrastructure sector with a mission to deliver essential services in a sustainable and resilient manner, as part of the energy transition and the digital transition. In recent months, we have made three investments in companies that, together, could contribute to avoiding the emission of more than 1 million tonnes of CO2e by 2028:

• Ikaros Solar, an independent builder and operator of renewable solar energy active in several European countries;

• Electra, operator of electric vehicle charging stations; and
• Resource, a major plastic waste sorting plant in Denmark we are developing in partnership with Quantafuel. 

What are we doing to help them to grow? As an investor, we provide them with capital and prime access to capital markets. We guide them in their development by bringing in sector or functional experts. But our support goes beyond that: we endeavour to instil in them a responsible approach to value creation. For each of our investments, we draw up a thorough environmental business plan. We monitor these plans using specific performance indicators that we measure throughout the holding period.

We aim to combine financial performance with a positive contribution to long-term sustainable development and the fight against climate change, through our investment strategy focused on transition infrastructure. For a transition towards a decarbonised world.