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J.P. Morgan Asset Management

PRI reporting framework 2020

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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.

          ESG matters are required to be considered by each board of directors at the investee companies pursuant to our mandatory governance calendars
        

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

Through our active asset management practices in working with the investee company boards and executive management teams, we engage investee companies in their approach to ESG issues.

  • We require transparent reporting by our investee companies on ESG and initiatives on an ad-hoc, quarterly and annual basis. This includes involvement of auditors and consultants to help check the accuracy of our reporting of elements of the primary environmental metrics.
  • We work with our investee companies to address relevant emerging ESG issues (for example: climate change risks and opportunities, resilience initiatives, supply chain considerations, culture, employee engagement and diversity & inclusion).
  • We also strive to share and adopt a best practice approach in the practical implementation of decision making across our investee companies. The team hosts Forums and Summits that bring together specific groups where ESG is an agenda item (for example: CEOs, Chairperson, Independent Directors, General Counsels or individuals who work in specific sectors); in addition, in 2019, an ESG Leadership Group was created to share best practices across the portfolio and includes one Leader (investee partner) from each investee partner.
  • We onboard new investee companies and boards with ESG trainings/workshops and encourage continual improvement in ESG performance.
  • Executive team compensation alignment includes consideration of ESG matters.

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

          Water companies set KPIs for water conservation
        
          Agreed Upon Procedures (AUP) engagements with each investee company’s local auditor to provide accuracy and consistency of environmental data, including GHG emissions and energy usage
        
          Companies report on environmental violations
        

List up to three example targets per issue

          Health and safety of employees, contractors and customers goals set and monitored
        
          Employee engagement programs, surveys and implementation of feedback
        
          Diversity and inclusion trainings and current statistics for each company
        

List up to three example targets per issue

          Adoption of board calendars that include distinct ESG topics, benchmarking results and areas of improvement
        
          Cybersecurity trainings for board members and tracking of cybersecurity incidents
        
          Anticorruption policies adopted and trainings implemented
        

12.3. Additional information. [Optional]

Direct Infrastructure discloses information regarding ESG in its Annual and Quarterly Reports and webcasts to investors. The Annual Report includes a sustainability report with annual ESG metrics and qualitative examples and case studies. The Quarterly report includes ESG updates which may include environmental responses and updates on recent storm or disaster recovery, community or philanthropic initiatives, governance and board member updates, trainings or workshop updates, employee engagement initiatives and any form of incident or violation reporting. In addition, the strategy and investee companies participate in annual benchmarking (GRESB) and those results are shared in detail with investors. In 2019, an ESG Leadership Group was created to share best practices across the portfolio – the group includes a member from each investee company and members from the Direct Infrastructure strategy.


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]

Through our active asset management practices in working with the investee company boards and executive management teams, we engage each investee company in their approach to ESG issues, including the adoption of ESG related policies, including standalone ESG policies, health & safety policies, stakeholder engagement policies, catastrophe and resilience policies or whistleblowing polices, etc. We work with our investee companies regularly to address relevant emerging ESG issues, like climate change risks and disaster recovery communication plans. We also use the GRESB assessment to formally engage with each company to complete the assessment and review results, share best practices across the portfolio, discuss areas of improvement as it relates to ESG policies, process and implementation and serve as a guide for continuous improvement for material ESG drivers. In addition, in 2019, an ESG Leadership Group was created to share best practices across the portfolio – the group includes a member from each investee company and members from the Direct Infrastructure strategy. Quarterly and ad hoc calls are held to discuss different topics including culture, health and safety, energy transition, materiality and specific investee company ESG initiatives.


INF 14. Type and frequency of reports received from investees (Private)


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]

We believe that ESG factors are relevant to the performance of specific infrastructure investments, in addition to their relevance to the effective functioning of markets and economic systems as a whole. More broadly, when ESG factors are considered and complement traditional fundamental analysis, they can contribute to the development of a more sustainable, stable and well-governed portfolio of infrastructure investments. As such, ESG assessment is important to the design and ongoing decision-making process for our infrastructure investments. Accordingly, we incorporate these factors into our investment and portfolio management processes (inclusive of maintenance projects that will take place throughout the year), including through consideration of appropriate ESG factors in contractor and other supply chain aspects of maintenance projects and applicable stakeholder engagement before and during projects. Some considerations in respect of maintenance projects include modern slavery statement, storm hardening, waste management, health & safety and habitat impact.


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