Evaluating Infrastructure Investment Opportunities and Risks

Morgan Stanley’s Consulting Group provides investment consulting to over $765 billion in client assets in advisory accounts.  The Capstone team selected three impact investment projects to evaluate the risks associated with these investments.  The team then identified the best methods to incorporate these types of projects with the green bond framework.

Within the green bond market, the team found that the main challenge with impact investment projects was to balance green bond issuance and demand to create value alignment.  The   lack   of standardization   and   failure to produce a more comprehensive list of tangible and intangible benefits incur a higher bond issuance cost. Based on these findings, the team developed a project evaluation criteria by assigning   monetary values to financial, social, and environmental factors, alongside the risk associated with each.