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AMP Capital Investors

PRI reporting framework 2019

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Post-investment (monitoring and active ownership)

Overview

INF 11. ESG issues in post-investment activities

11.1. Indicate whether your organisation and/or operators consider ESG issues in post-investment activities relating to your infrastructure assets.

11.2. Indicate how your organisation, and/or operators, considers ESG issues in the following post-investment activities relating to your infrastructure assets.

          Please refer INF 11.3 below
        

11.3. Describe how your organisation, and/or operators, considers ESG issues in post-investment activities related to your infrastructure investments. [Optional]

Active ownership and asset management: AMP Capital places a strong emphasis on active management of its infrastructure assets. Each infrastructure investment has a dedicated AMP Capital Asset Manager whose responsibilities include ESG monitoring and management. Transparency and influence of ESG performance is achieved through board representation, CEO and senior management dialogue, strong relationships and contractual arrangements with third-party operators. AMP Capital also initiates ESG-focused research and strategic propositions, based on a wealth of internal experience in the asset class and across responsible investment themes.

Board representation: Board representation allows AMP Capital to play a direct and active role in monitoring, assessing and influencing the financial and ESG performance of our investments. AMP Capital appoints representatives to the boards of almost all assets in which it holds an equity investment on behalf of clients. Nominees may be senior members of the AMP Capital Global Infrastructure Team, or external appointees with the necessary experience and skill.

Our nominees are appointed to asset boards to:

•           ensure ESG issues are considered where relevant in discussions and decisions on operational performance, corporate strategy and stakeholder relationships

•           pursue strong governance, legislative compliance, WH&S, environment and risk management frameworks, including the engagement of sub-committees

•           monitor and review operational performance, providing the dedicated asset manager with regular detailed data

•           leverage broader industry and government relationships to improve performance, and

•           otherwise help protect investors' interests through rigorous decision-making on further investments, distribution strategy and management, capital structures, tax structures and relationships.

Third-party operators: While core infrastructure assets generally have their own board and in-house management team for corporate and operational issues, some social infrastructure investments rely heavily on third-party operators to provide operational support, maintenance and facilities management. In these cases, monitoring and driving the ESG performance of third-party operators is an important aspect of the asset manager's role. We pursue this with standardised reporting, site visits/ inspections by the AMP Capital team and regular forums with stakeholders to progress ESG initiatives.

Social infrastructure management teams: While core infrastructure assets generally have their own in-house management teams to manage the affairs of the company and conduct the business of operating the assets, in contrast social infrastructure assets usually do not employ any staff. In these cases, AMP Capital's Social Infrastructure Team takes a hands-on approach to managing our social infrastructure assets on behalf of our clients.

Periodic ESG appraisals: Each asset's manager appraises its ESG factors and management practices with the support of Infrastructure's ESG and Sustainability Manager. Their conclusions are incorporated into investee company dialogue, co-investor engagement, and budgeting, valuation and asset management practices. While ESG appraisals are typically focused on improved transparency and risk management, we may also propose strategic or operational initiatives to leverage ESG factors for improved profitability.

Leveraging best-practice insights: Each new due diligence process, periodic ESG appraisal or implemented initiative generates new insights that may benefit our global portfolio of assets. As the Infrastructure ESG and Sustainability Manager is engaged with all existing investments and new transactions globally, these insights are easily disseminated to the asset and investment teams.

Unified investment house culture: Our infrastructure insights are just one input into AMP Capital's proprietary in-house research across all asset classes. AMP Capital's highly experienced ESG professionals regularly collaborate on thematic-, sector- and region-specific insights for the benefit of all our investment portfolios.

 


Infrastructure Monitoring and Operations

INF 12. Proportion of assets with ESG performance targets

12.1. Indicate the proportion of infrastructure assets for which your organisation and/or operators included ESG performance in investment monitoring during the reporting year.

 (in terms of number of infrastructure assets)

12.2. Indicate ESG issues for which your organisation, and/or operators, typically sets and monitors targets (KPIs or similar) and provide examples per issue.

List up to three example targets per issue

          ACP Cladding Assessment was rolled out to majority of the assets in the various portfolios & the results were used for any remedial actions as required.
        
          AMP Capital worked with the rail management to perform a review of the Environmental Framework and produced an updated Environmental Sustainability Management Plan.
        
          An Aged Care Company rolled out a project to replace inefficient light globes with energy efficient LED globes & install solar panelling across aged care homes.
        

List up to three example targets per issue

          An airport Draft Master Plan was displayed online, and the community were invited to make submissions in response to the plan presented.
        
          Women’s workshop was facilitated at an airport company by external consultant to inspire & empower women employees & create positive change in their personal & professional lives.
        
          A carpark introduced Park4Purposeprogram under which portion of weekend parking revenue generated on the company’s website will be donated to support local charities & communityorganisations.
        

List up to three example targets per issue

          AMP Capital and the executive management team undertook a successful crisis management plan and simulation exercises with the train operations and advisors
        
          A key part is the inclusion of university staff on the asset board by virtue of residual shareholding & participation of Student Services Division in forums.
        
          Together with management & external advisors a student housing is reviewing the fire safety compliance & annual fire safety & building code regulations through audits and improvement plans.
        

12.3. Additional information. [Optional]

The approach to determine ESG materiality, targets and monitoring processes differ greatly and is very much tailored to the sector, geography and materiality of ESG issues inherent in each investment. ESG targets where relevant are typically set and monitored by the management team and Board of the investee company. Consistent with our active asset management approach, we ensure high participation, transparency and influence with Board and management.


INF 13. Proportion of portfolio companies with ESG/sustainability policy

13.1. Indicate whether you track the proportion of your infrastructure investees that have an ESG/sustainability-related policy (or similar guidelines).

13.2. Indicate the proportion of your infrastructure investees that have an ESG/sustainability-related policy (or similar guidelines).

(in terms of number of infrastructure investees)

13.3. Describe how your organisation, and/or your operators, contribute to the infrastructure investees’ management of ESG issues. [Optional]

A number of our investee companies have an existing ESG / Sustainability related policy in place, and we continue to take steps to institute policies in the remaining investee companies. We believe all investee companies should have relevant policies, processes and accountabilities in place that appropriately address ESG risks and opportunities that are material to the operations of the investment.

A majority of our infrastructure assets participate in the annual GRESB Infrastructure Asset Assessments with support from the executive management and respective leaders to review and improve their ESG practices and performances.


INF 14. Type and frequency of reports received from investees

14.1. Indicate the type and frequency of reports you request and/or receive from infrastructure investees covering ESG issues.

Type of Reporting

Typical reporting frequency

Typical reporting frequency

          Gathering of Fund and Asset level ESG data through completion of GRESB Infrastructure Assessments.
        

Typical reporting frequency

14.2. Additional information.

ESG considerations are now integrated into the continuing management and financial reporting processes of AMP Capital's infrastructure investments. This includes:

•           Standardised monthly reporting to the Board, providing greater consistency, transparency and governance over ESG issues;

•           Quarterly reviews with service providers, government counterparties and other relevant stakeholders to ensure early identification of issues and proactively resolution

•           Annual verification of service provider accreditations (e.g. ISO14000) to assure robust governance and risk management processes.

AMP Capital is also a founding member of the GRESB Infrastructure Assessment launched in 2016 to benchmark the ESG performance of Infrastructure Funds and Assets worldwide.

Through GRESB Infrastructure, AMP Capital benchmarks the ESG performance of its flagship infrastructure funds as well as collecting ESG performance data for a variety of our underlying assets. AMP Capital has played an integral role in the development of this international standard in collaboration with other leading Institutional Investors from Europe and North America. For further information please refer to www.gresb.com

In 2018 GRESB Infrastructure results:

  • AMP Capital Diversified Infrastructure Trust ranked 1st out of 12 Diversified, Asia-Pacific Private Entities;
  • AMP Capital Irish Infrastructure Fund ranked 2nd out of 17 Diversified, Europe Private Entities; and
  • AMP Capital Global Infrastructure Fund ranked 5th out of 18 Diversified, Global Private Entities.

Infrastructure Maintenance

INF 15. Proportion of maintenance projects where ESG issues were considered

15.1. Indicate the proportion of active infrastructure maintenance projects where ESG issues have been considered.

(in terms of number of active maintenance projects)

15.2. Describe your approach to ESG considerations for infrastructure maintenance projects. [Optional]

ESG issues are considered across the full scope of our investment process, from the identification of new opportunities and throughout the lifecycle of an asset. When considering the key ESG issues likely to impact the projects, we assess the physical location of a facility or service, environmental impacts and constraints, community and social implications, the dynamics of the sector or industry in which they operate and the business practices of related counterparties.

Continuous sustainability reviews and infrastructure maintenance projects are driven by investor demands. This can also include future proofing against new regulations and compliance with existing regulations, which are considered by the board and senior management when considered material to operational performance of the investment.


Stakeholder engagement

INF 16. Proportion of stakeholders that were engaged with on ESG issues

16.1. Indicate which stakeholders your organisation, and/or operators, engaged with on ESG issues in relation to your infrastructure assets during the reporting year and what proportion of your investments they apply to.

Stakeholders engaged

Percentage of infrastructure assets these apply to

 (in terms of number of infrastructure assets)

Percentage of infrastructure assets these apply to

 (in terms of number of infrastructure assets)

          Facility managers and operators.
        

Percentage of infrastructure assets these apply to

 (in terms of number of infrastructure assets)

16.2. Describe your approach to stakeholder engagements in relation to your infrastructure assets.

Infrastructure assets, almost by definition, impact a wide range of stakeholders including the communities in which they operate. Positive relationships with investee company management, subcontractors, government counterparties, regulators and local communities help resolve issues efficiently and achieve investment objectives. Regular and active engagement reinforces expectations for all parties, including on investee company objectives. Examples include:

  • Annual reporting to the respective Department, State, regulator that the infrastructure asset company is classified under;
  • Standardised monthly reporting to the Board, providing greater consistency, transparency and governance over ESG issues; Quarterly reviews with service providers, government counterparties and other relevant stakeholders to identify and resolve issues early and directly;
  • Annual 'stakeholder workshops' to clarify and reinforce our successful partnering model, accountabilities and working protocols;
  • Annual verification of service provider accreditations (e.g. ISO14000) to assure robust governance and risk management processes, and
  • Industry stewardship in sharing expertise and insights with industry, tertiary and government bodies.

 


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