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InfraRed Capital Partners Limited

PRI reporting framework 2019

Export Public Responses

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ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation undertakes scenario analysis and/or modelling and provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe As part of its due diligence process in both real estate and infrastructure, InfraRed has included a specific ESG section to address issues such as flooding zones or energy efficiency.
Describe CC scenario analysis exercises were carried out for InfraRed's private Infrastructure and RE Funds in their investment periods. Involving the relevant Fund Managers, these exercises identified a range of fund and project-specific risks and opportunities and some further work items. It was reviewed by the RI-ESG Committee.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

As a manager of private and listed funds focused on 2 particular asset classes, InfraRed cannot engage in active or tactical asset allocation. However, ESG considerations are central to how new funds are designed. Long-term forecasts of macro environmental and social trends drive the focus of their investment strategies; governance standards are a main determinant of the jurisdictions in which InfraRed invests. Further details are set out in the response to the next indicator SG 14.

In addition, InfraRed is well positioned to learn from analysis of consumer behaviours undertaken at the portfolio level. This helps us focus on specific real estate sectors that are increasing in prominence, and confirm or challenge the key macro trends in our infrastructure strategies InfraRed conducts detailed quantitative scenario forecasting in respect of HICL, the listed infrastructure fund, modelling a range of ESG-relevant factors. 


SG 13 CC.

13.4 CC. Describe how the organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, the results and any future plans.

Describe

InfraRed has completed scenario analysis exercises – in line with TCFD guidance – in relation to its private investment funds still in their investment periods.

specify

          Scenario Analysis
        

Describe

Scenario analysis is at the root of how InfraRed has approached the challenge of identifying and managing climate-related risks and opportunities. Based on the outcomes of this analysis, InfraRed has itemised both the project and fund-specific issues and the firmwide challenges it faces and used this to inform the remaining actions that emerged from its Gap Analysis of mid-2018

13.5 CC. Indicate who uses this analysis.

13.6 CC. Indicate whether the organisation has evaluated the impacts of climate-related risk, beyond the investment time-horizon, on the organisations investment strategy.

Please explain the rationale

The time horizon chosen is already quite long, i.e. the lifetime of the infrastructure or real estate project.

13.7 CC. Indicate whether a range of climate scenarios is used.

Indicate the climate scenarios the organisation uses.
Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other
Other
Other

SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

other description (1)

          Government subsidies for renewable energy assets
        

other description (2)

          Tax - InfraRed has developed sustainable tax policies to reflect good tax governance, taking into account the interests of all stakeholders.
        

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

InfraRed has been investing in renewable energies through both a dedicated private fund and its listed fund called TRIG (https://www.trig-ltd.com/). 

In its most recent infrastructure private fund, which reached final close Q4 2018, it also included renewable energy as part of the fund's investment strategy. 

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

other description

          InfraRed is working in 2019 to identify metrics best suited to the climate-related risks and opportunities for its overall business and fund investment projects.
        

14.5. Additional information [Optional]

In terms of InfraRed’s focus on technology developments, (selected above), the investment focus for various funds means we need to stay appraised of fast-developing technology, e.g. renewable electricity generation, expanding fields like tidal power, and battery storage.


SG 14 CC.

14.6 CC. Please provide further details on these key metric(s) used to assess climate related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Exposure to carbon-related assets
          
        
          
        
          
        

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risks management processes for identifying, assessing, and managing climate-related risks.

Please describe

InfraRed plans in 2019 to make changes to its fund risk matrices and other risk management tools to integrate climate-related risks for the first time in its overall risk management framework. This will complement the changes in the investment processes, asset management, the responsibilities of key individuals and other aspects of its business.


SG 15. Allocation of assets to environmental and social themed areas

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

49 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

4 % of AUM

Brief description and measures of investment

Includes building battery storage facilities to hlp balance renewable energy assets.

The % figure here relates to the percentage of Infrastructure assets in the area (i.e. not overall AUM).

Asset class invested

25 % of AUM

Brief description and measures of investment

Includes building and operating wind farms, PV solar and CSP solar parks.

The % figure here relates to the percentage of Infrastructure assets in the area (i.e. not overall AUM).

Asset class invested

10 % of AUM

Brief description and measures of investment

Includes buildings that have reached or expected to reach certain a BREEAM rating of Very Good and HQE Excellent.

The % figure here relates to the percentage of property assets in the area (i.e. not overall AUM).

Asset class invested

7 % of AUM

Brief description and measures of investment

Includes building schools and providing facilities management services.

The % figure here relates to the percentage of Infrastructure assets in the area (i.e. not overall AUM).

Asset class invested

19 % of AUM

Brief description and measures of investment

Includes building hospitals and various healthcare facilities and providing facilities management services.

The % figure here relates to the percentage of Infrastructure assets in the area (i.e. not overall AUM).

Asset class invested

4 % of AUM

Brief description and measures of investment

Includes interests in water operating companies, building desalination facilities management services.

The % figure here relates to the percentage of Infrastructure assets in the area (i.e. not overall AUM).

15.4. Please attach any supporting information you wish to include. [OPTIONAL]



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