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INFRAVIA CAPITAL PARTNERS

PRI reporting framework 2019

You are in Direct - Infrastructure » Pre-Investment (Selection)

Pre-Investment (Selection)

INF 05. Incorporating ESG issues when selecting investments

05.1. Indicate if your organisation typically incorporates ESG issues when selecting infrastructure investments.

05.2. Describe your organisation's approach to incorporating ESG issues in infrastructure investment selection.

The incorporation of ESG issues in pre-investment is not determined by clients mandates. ESG consideration in pre-investment is performed and presented to InfraVia Capital Partners Investment Committee analysing the 8 criteria (see 04.2) defined in InfraVia Capital Partners ESG policy.

ESG ISSUES IN PRE-INVESTMENT PROCESS

Short-term considerations :

- Ability to comply with regulatory request from the public client in terms of ESG to be awarded

- Ability of getting the appropriate authorisations/regulatory approval to build and/or operate the infrastructure

Long term considerations :

- Acceptance of the project in its various components: environmental, social and societal issues

- Governance adapted to the specific features of the project to ensure proper alignment of interests between the various stakeholders

- Ability to deliver long term and regular cash flows

- Ability to sell a long term infrastructure assets

USE OF ESG TO ASSESS DOWNSIDE RISKS AND CREATE VALUE

InfraVia Capital Partners investment process is more concentrated on assessing the solidity of the business plan and the associated underlying cash flows. The analysis of ESG criteria is focused on evaluating downside risks (pollution, safety, noise, etc …) and value creation (employment, training, etc …) across the whole ESG matrix

DIFFERENCE IN HOW ESG ISSUES ARE TAKEN INTO ACCOUNT IN DIFFERENT INFRASTRUCTURE INVESTMENTS AND GEOGRAPHIC REGIONS

See 7.2 below


INF 06. ESG advice and research when selecting investments

06.1. Indicate whether your organisation typically uses ESG advice and research sourced internally and/or externally when incorporating ESG issues into the infrastructure investment selection process.

          CEO of InfraVia Capital Partners
        
          COO / Compliance Officer
        
          Asset and Investment Managers
        
          External advisor has been appointed in 2018 for ESG data collection and analysis.
        

06.2. Additional information. [Optional]


INF 07. Examples of ESG issues in investment selection process

07.1. Indicate which E, S and/or G issues are typically considered by your organisation in the investment selection process and list up to three typical examples per issue.

ESG issues

List up to three typical examples of environmental issues

          Environmental benefit: e.g. production of renewable energy.
        
          Environmental impact reduction: specific actions undertaken at the company level and/or within its main partners (waste management, noise reduction, gas emission reduction).
        
          Existence of environmental policies at the level of the investment and/or its main partners.
        

List up to three typical examples of social issues

          Economic and societal development benefit of the infrastructure.
        
          Number of employment creation.
        
          Number and frequency of incident/accident.
        

List up to three typical examples of governance issues

          Existence of a formalised governance policy (shareholders agreement or other type of documents)
        
          Alignment of interest between the stakeholders
        
          Analysis of the respective power of each shareholders, board members and management and consistent with the project nature.
        

07.2. Additional information. [Optional]


INF 08. Types of ESG information considered in investment selection

08.1. Indicate what type of ESG information your organisation typically considers during your infrastructure investment selection process.

08.2. Additional information.

As infrastructure investment is specific to the market/environment in which they are build/operated and not often comparable with other existing infrastructure assets, benchmarks are not always available. However, as of today, InfraVia Capital Partners holds 17 infrastructure projects, providing him solid benchmark information among portfolio companies.

Sources of information on ESG issues frequently used:

•          Report from external adviser (technical advisers, legal/regulatory, social as the case may be);

•          Industrial partners specific ESG policies;

•          Contractual documentation with stakeholders (including shareholders agreement);

•          Technical and environmental value proposition in the context of RFP organised by a public body;

•          Management and employee interviews during the due diligence process;

•          Specific ESG reporting provided by the underlying portfolio company;

•          Internet, other …

Record of ESG information:

•             ESG analysis on each investment is part of the formal Investment Memorandum supporting the investment decision during the Investment Committee and is filed in accordance with the filing procedure of InfraVia Capital Partners.


INF 09. ESG issues impact in selection process

09.1. Indicate if ESG issues impacted your infrastructure investment selection processes during the reporting year.

09.2. Indicate how ESG issues impacted your infrastructure investment deal structuring processes during the reporting year.

09.3. Additional information.

As described in more details previously, ESG criteria in terms of sustainability, acceptance and proper governance implementation are key in the investment decision making and monitoring processes. Impact on the pricing can be assessed in the following cases : level of capital expenditure deployment for environmental compliance, and social criteria consideration when performing an investment in nursing homes or hospitals. Implementation of a proper governance involving the various stakeholders impacts necessarily the terms of the shareholder agreements.


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