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.