Kurt Summers to help Blackstone overlay PPPs with ESG

Kurt Summers, who as city treasurer brought ESG to government spending in Chicago, has joined Blackstone’s infrastructure group to lead public-private partnership deals.

Blackstone’s infrastructure group, which launched in 2017 to capture growing investment opportunities in the US, will likely play a large role in the firm’s energy transition plans. The firm is managing an open-end fund that raised $14 billion by 2019 and reopened for fundraising last October, as reported by affiliate Infrastructure Investor. The Blackstone Infrastructure Partners vehicle has invested in transportation, midstream and digital infrastructure assets.

Summers also is likely to play a large role in any climate-related investment strategy, as well as any ESG integration plan touching Blackstone’s infrastructure group.

Since leaving his post as city treasurer of Chicago in 2019, he acted as a senior adviser to Blackstone’s infrastructure group. Now, in an official capacity, Summers will be responsible for leading investment partnerships involving local governments, civic and labour organisations, and broader stakeholders, according to a statement announcing his hire.

Summers was an early embracer of ESG. In a 2019 interview with affiliate title Private Equity International he described how integrating sustainability factors into the investment process was part of the pension’s fiduciary duty: “The real risk was not doing this, to sit there blind to all of these factors that could have a material impact on the quality of our investments, and thus the return or risk we’re taking unknowingly on behalf of taxpayers.”

From 2014 to 2019, as city treasurer, Summers helped integrate Chicago’s ESG strategy into 100 percent of the city’s investment decisions on corporate, agency and municipal fixed-income securities. He also helped Chicago achieve a carbon-neutral investment portfolio and led the city to become a signatory to the United Nations-supported Principles for Responsible Investment.

In May 2019, as an outgoing treasurer, Summers wrote a letter to other US state treasurers imploring them to take advantage of the “enormous value proposition” that ESG strategies can have to enhance government investment decisions for their own constituents, according to reporting published by affiliate publication Responsible Investor.

Summers laid out three steps other public-sector institutions can take to integrate ESG including:

• Evaluate status quo and identify opportunities to drive additional value with ESG.
• Identify and address barriers to ESG integration.
• Integrate ESG approaches into security selection and overall portfolio management.

“ESG integration presents an enormous value proposition to us as public-sector investors,” Summers wrote in his letter, “not only driving more favourable risk-adjusted returns but also empowering us to align our investments with our broader policy priorities.”

Hiring Summers is Blackstone’s latest move to add high-level sustainable investing experience to a firm managing $731 billion in assets. Over the past year, Blackstone has invested to expand the number and reach of ESG professionals across the firm.

In November, Blackstone named Jean Rogers, founder of the Sustainability Accounting Standards Board, as its new head of ESG. In July, the firm appointed Devin Glenn as global head of diversity, equity and inclusion, while also announcing in April four new ESG-related hires.

On the investment side, Blackstone has moved to purchase Sphera, a Chicago-based ESG software, data and consulting services provided for $1.4 billion. Earlier this month, the firm’s credit group launched the Sustainable Resources Platform and, at the same time, set the outline for $100 billion of climate-related and energy transition investments to come over the next decade.