InfraRed's broad investment approach to ESG matters during the pre-investment process has been described in the response to indicator INF 01.1 of this Module.
To summarise, ESG matters are fundamental to all InfraRed investment decisions across sectors, geographic locations and the scale of the investment. InfraRed manages several different funds with different investment parameters and strategies, including two that are publicly listed; the InfraRed ESG strategy and philosophy is a common requirement across all of them without any differentiation. Many of InfraRed's institutional investors have their own ESG requirements. InfraRed's overarching ESG philosophy has been developed to ensure that it exceeds these requirements.
As noted in the response to indicator INF 04.2 above, Side Letters can be used to record the requirements of individual investors in private funds, e.g. for investment in certain sectors to be considered an Excused Investment, with the option given not to participate. In practice, this is not normally a risk given the investment focus of the funds in question. Investment process controls ensure each new opportunity is screened against applicable investor requirements.
InfraRed's approach is now well established but also flexible. As standards increase and new areas take shape (e.g. in relation to climate change and the UN Sustainable Development Goals), InfraRed's investment process controls can be expanded to ensure the each Deal Teams gives adequate consideration to ESG issues and that the relevant Investment Committee can subject it to review and scrutiny.