ESG Investing

Multiple ESG Targets Fill Infrastructure Investment and Jobs Act


After more than seven months of inter- and intra-party negotiations, the House of Representatives passed the Infrastructure Investment and Jobs Act on November 6, 2021. Nine days later, President Joe Biden signed the $1.2 trillion legislation, which received bipartisan support in both the House and Senate, into law.

In keeping with traditional federal infrastructure spending packages, much of the bill was earmarked for projects deemed essential to keeping the nation’s crucial transportation arteries from deteriorating further. Ideally, such efforts will improve the country’s core infrastructure, which the American Society of Civil Engineers (ASCE) grades as a C-.

Just as critically for ESG and impact investors, however, the act pledges billions to measures that directly and indirectly address environmental and social matters. This puts a lot of wind at the backs of many ESG issues.

Environmentally Minded Advances

In addition to repairing crumbling roads, deteriorating bridges, and weakening dams, the Infrastructure Investment and Jobs Act also directly supports climate-friendly initiatives, including:

  • $65 billion for upgrades to the country’s power grid and transmission system, which are critical for moving electricity generated in remote portions of the country to heavily populated regions. Considering the ASCE estimates that 70% of power transmission, and distribution lines are past the midpoint of their 50-year life expectancy, upgrades featuring new clean energy technology will help improve efficiency and effectiveness while delivering power from renewable sources.
  • $12 billion for carbon management programs, including more than $7 billion for developing carbon capture, transport, and storage systems that remove carbon from emissions and the environment.
  • $9.5 billion to further the development and utility of abundant, clean hydrogen as a viable energy source.
  • $7.5 billion for a national electric vehicle charging station network that streamlines the current landscape of 100,000 public charging stations bogged down by a myriad of hardware capabilities, technical requirements, and accessibility. It also recognizes that charging Infrastructure is key to wider electric vehicle adoption.

Just as critically for ESG and impact investors, the act pledges billions to measures that directly and indirectly address environmental and social matters.

Encompassing Societal Issues

Projects in the Infrastructure Investment and Jobs Act place social impacts virtually on par with the physical objectives. These include:

  • $89.9 billion, including $39 billion of new investment, in public transportation systems nationwide. According to the Biden Administration, while modernizing bus fleets with zero-emission vehicles will reduce greenhouse emissions, expanded systems will aid communities of color, which are more likely to use public transportation. It will also improve accessibility for the elderly and individuals with disabilities.
  • $65 billion for a nationwide broadband network buildout and cash subsidies to narrow the nation’s digital divide. This will improve the availability of broadband technology to the 157 million Americans who don’t currently have high-speed internet access, which hinders educational, employment, and healthcare opportunities. This may help close the digital divide.
  • $55 billion for improved access to healthy drinking water, including $15 billion specifically designated to replacing lead pipes. The bulk of individuals exposed to such toxic water delivery systems lives in low-income communities and communities of color.
  • $21 billion for cleanup efforts at polluted brownfield and superfund sites, which continue to harm the environment long past initial contamination. Such blighted areas are frequently located near communities of color: The US Environmental Protection Agency estimates more than one in four Black and Hispanic residents live within three miles of a superfund site, which are frequently considerable detriments to public health.

When President Biden took office, he pledged to take a government-wide approach to the climate crisis and pursue environmental and economic justice. Over the next five years, the programs within the Infrastructure Investment and Jobs Act will serve as jumping-off points for the country’s efforts on all of those fronts. They may also show impact investors which way the wind is blowing.

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