ESG factors affecting the asset sustainability of infrastructure REITs in China

Purpose Environmental, social and governance (ESG) can enhance the sustainable value and profitability of assets by improving environmental responsibility, social benefits and governance quality. However, there is a lack of research on the ESG aspects of the asset sustainability of infrastructure Real Estate Investment Trusts (REITs), particularly in terms of how ESG affects asset sustainability and their intrinsic relationships. Therefore, this study aims to explore the ESG factors affecting the asset sustainability of infrastructure REITs and their intrinsic linkages, in order to enhance the long-term sustainability of the asset. Design/methodology/approach The study employed structural equation modeling (SEM) to analyze the relationship between ESG factors and the sustainability of infrastructure REITs, through a comprehensive literature review and questionnaire survey to collect data. This method aims to provide a quantitative analysis framework to assess the impact strength and interactions of these factors. Findings The 11 ESG factors positively influence the sustainability of infrastructure assets. Specifically, carbon emission management, information disclosure and infrastructure asset management have the most substantial impacts, with path coefficients of 0.830, 0.814 and 0.817, respectively. Measures such as optimizing resource use, enhancing transparency and improving operational efficiency contribute to increased asset sustainability. Also, interviews indicate that asset managers and corporate executives with overseas educational backgrounds play a crucial role in the ESG management of infrastructure assets. Sustainability can be enhanced by promoting sustainable technologies and enhancing cross-cultural communication. Practical implications The results offer guidance for infrastructure REIT managers and policymakers, emphasizing the importance of strengthening specific ESG practices to enhance sustainability. This provides an empirical basis for optimizing ESG policies and practices, helping to advance infrastructure REITs towards more sustainable development directions. Originality/value This study offers new insights into the field of ESG for infrastructure REITs in China by providing specific analysis of ESG factors and applying SEM. The originality of this study lies in its deep exploration of the specific impact factors within the ESG dimensions and quantifying their relationship with sustainability, offering strong scientific support for the sustainable development practices of infrastructure REIT.