Sustainable Infrastructure as a High-Conviction Long-Term Asset Class

The global infrastructure landscape is undergoing a seismic shift. By 2025, the world faces a staggering $68 trillion investment need to modernize critical systems, driven by climate adaptation and the energy transition. This figure, underscored by BlackRock's Larry Fink in his 2025 chairman's letter and corroborated by the OECD and World Bank, reflects a structural transformation in how societies will power economies, manage resources, and mitigate climate risks over the next 15 years according to OECD and World Bank data. For investors, this represents not just a financial challenge but a strategic opportunity to align capital with long-term resilience and sustainability.

The Strategic Imperative: Beyond Growth to Resilience

The urgency for infrastructure investment is rooted in three overlapping forces: digital disruption, energy transition, and climate adaptation. According to the OECD, annual infrastructure spending must reach $6.9 trillion by 2030 to align with the Sustainable Development Goals and the Paris Agreement. This demand spans sectors such as renewable energy, smart transportation, and water management, where underinvestment has left systems vulnerable to shocks. For example, global renewable power capacity is projected to double by 2030, requiring massive capital inflows to scale technologies like solar, wind, and carbon capture.

The energy transition alone is a linchpin of this $68 trillion need. A Climate Policy Initiative/A&O Shearman report highlights that an additional $5.9 trillion annually must be allocated to climate mitigation between 2024 and 2030 to close the net-zero financing gap. This underscores the scale of capital required to decarbonize energy systems, retrofit buildings, and electrify transport-a transition that is both a risk and an opportunity for investors.

Capitalizing Through Climate-Aligned, Liquid Index Strategies

To navigate this complex landscape, investors are increasingly turning to climate-aligned, liquid index strategies. These tools offer a disciplined way to access high-conviction infrastructure equities while aligning with sustainability goals. A prime example is the FTSE Sustainable Infrastructure Index Series, developed by LSEG in collaboration with BlackRock. This index series targets listed infrastructure equities that are driving the low-carbon transition, including companies in renewable energy, green mobility, and climate-resilient utilities.

The FTSE Green Revenues Select Infrastructure and Industrials Index, a component of this series, has demonstrated strong performance, outperforming conventional infrastructure benchmarks over an eight-year period ending September 2025. Liquidity is another critical advantage. Unlike private infrastructure investments, which are often illiquid and require long holding periods, listed infrastructure equities offer daily tradability and transparency. As noted by iShares, infrastructure assets inherently provide diversification, lower volatility, and inflation-hedging benefits-making them a compelling addition to institutional and individual portfolios.

Performance and the Path Forward

The performance of climate-aligned indices is not an anomaly but a reflection of broader market dynamics. Over the past decade, investor appetite for infrastructure has nearly tripled, driven by its role in addressing global challenges. The FTSE Global Core Infrastructure TPI Climate Transition Index, for instance, tracks companies aligned with the Transition Pathway Initiative's criteria, emphasizing decarbonization roadmaps and governance standards according to LSEG data. While its returns have closely mirrored traditional benchmarks, its thematic focus ensures exposure to sectors poised for long-term growth.

For investors, the key lies in balancing thematic exposure with risk management. Geographic and sectoral diversification within these indices help mitigate volatility, while the inclusion of high-quality, cash-generative assets ensures resilience. As Larry Fink emphasized, the $68 trillion opportunity will be funded through a mix of public and private capital, with public markets playing a pivotal role in scaling solutions.

Conclusion: A Defining Investment Opportunity

The $68 trillion global infrastructure investment need is not merely a statistic-it is a call to action for investors to rethink how capital is deployed. Climate-aligned, liquid index strategies offer a bridge between financial returns and planetary imperatives, enabling investors to participate in the energy transition while capturing the inherent stability of infrastructure assets. As the OECD and World Bank stress, the next 15 years will define the trajectory of sustainable development. For those with a long-term horizon, the infrastructure sector is no longer a peripheral asset class but a cornerstone of resilient, future-proof portfolios.