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Alinda Capital Partners Ltd.

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

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01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

 Alnda is one of the world’s leading investment firms in infrastructure and is one of the most experienced, having made over $10 billion of equity investments in infrastructure businesses over the last fourteen years. The Funds invest globally with a primary focus on middle-market investments in North America and Europe. Focus sectors are:

  • Transportation Infrastructure
  • Utility-related Infrastructure
  • Digital Infrastructure

Going forward, Alinda will not invest in traditional midstream energy.  Alinda has adopted a Code of Business Conduct and Ethics which addresses the management of ESG issues generally in balance with the fiduciary duties it owes to its managed funds.  Evaluation of ESG issues is an integral part of Alinda’s due diligence review of a targeted investment and ESG matters are subject to rigorous analyses during our due diligence process.  Our Investment Process Memorandum includes guidance on the management of issues in undertaking due diligence and portfolio management functions relating to specific portfolio investments.  Because we recognize that ESG issues can affect the performance of an Alinda Fund’s investment portfolio, we require that, where relevant information is available, a targeted investment’s performance with respect to ESG matters be considered during the acquisition due diligence process and ongoing monitoring and reporting. 

 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Overview of Alinda’s ESG and Sustainability Approach

Alinda recognizes that environmental, social, and corporate governance (“ESG”), and more broadly, sustainability, issues can affect the performance of an Alinda Fund’s investment portfolio (to varying degrees across companies, sectors, regions, and asset classes and through time).  The proper consideration of ESG issues may also better align a Fund’s Investments with the broader objectives of its Investors and of society generally. As a result, we require that, where relevant information is available, a targeted investment’s performance with respect to ESG matters be considered during the acquisition due diligence process. 

Alinda’s Investment Process Memorandum includes written processes, policies and procedures designed to address the management of ESG issues.  Evaluation of ESG issues is an integral part of Alinda’s due diligence review of a targeted investment and ESG matters are subject to rigorous analyses on a number of dimensions during our due diligence process.  Our Investment Process Memorandum includes guidance on the management of issues in undertaking due diligence and portfolio management functions relating to specific portfolio investments.  Areas of particular relevance include the targeted investment’s record in:

  • Observing and supporting human rights
  • Not being complicit in infringements of human rights
  • Respecting the freedom of association and trade union membership
  • Banning all forms of forced labor
  • Banning discrimination at work and in occupations
  • Encouraging and supporting a diverse workforce
  • Strong health and safety record with a target of zero accidents/incidents
  • Strong environmental policies and performance, with a target of zero incidents
  • Observance of relevant standards regarding environmental matters
  • Combating all forms of extortion and bribery

Further, Alinda’s target market comprises Canada, the European Union and the United States, each of which is recognized internationally as having strong rules and regulations relating to ESG issues.  Alinda’s written policies mandate compliance with applicable law.  We view the applicable regulatory and other legal obligations as minimum standards for the management of ESG matters post-acquisition.

Alinda is an active portfolio manager and we seek to implement operating enhancements at the portfolio companies of the Funds we manage.  Alinda’s Partners and staff generally hold board seats of the portfolio companies, including voting control, and supervise governance structures and practices.  Alinda controls or shares control of most portfolio companies of the Alinda Funds.  Senior management and other ESG factors, including policies regarding subcontractors, are supervised by Alinda’s representatives on the portfolio companies’ boards.

Evaluation and Management of ESG and Sustainability Matters

In mid-2013, Alinda enhanced its ESG approach by implementing two policies that form the core of our ESG efforts and has updated them periodically. In 2020, Alinda supplemented its Environmental, Health and Safety Policy to recognize the impact of climate change as a key consideration throughout the investment cycle and state its commitment to reduce investment in fossil fuel related businesses and undertake to reduce the carbon footprint of its existing investments where feasible. These policies guide Alinda’s investment professionals and consultants in the evaluation and management of ESG/Sustainability matters:

  • Environmental, Health & Safety Policy (the “EHS Policy”)
  • Social Responsibility and Corporate Governance Policy (the “Corporate Governance Policy”)

The EHS Policy and the Corporate Governance Policy are together referred to as the “ESG Policies”.  The ESG Policies are attached as Exhibits to Alinda’s Investment Process Memorandum and copies are a

EHS Policy

The EHS Policy describes the purposes of the policy and Alinda’s objectives with regard to the evaluation and management of environmental, health and safety impacts of investment targets and portfolio companies.  Alinda expects portfolio companies to:

  • conduct their business activities in a responsible manner that manages and protects against recognized hazards, and to safeguard the health and safety of their employees, customers, suppliers, partners and the community
  • actively encourage and support portfolio companies’ efforts to reduce GHG emissions as a critical component of our collective responsibility to mitigate climate change
  • comply with all applicable environmental, health and safety regulations and laws of the jurisdictions in which they operate
  • implement programs policies and objectives tailored to their respective operations
  • solicit feedback from our limited partners regarding their responsibility investing and sustainability preferences and incorporate that into our investment process as appropriate

The policy establishes guidelines for the evaluation of the ESG matters relating to a targeted acquisition.  With respect to an acquisition, the Alinda transaction team will evaluate, among other things:

the target’s performance against applicable environmental laws and regulations

  • the impact of the target’s operations on the environment
  • the target’s performance against applicable occupational safety and health regulations

Regarding the on-going portfolio management function following the acquisition of a portfolio company, the policy sets out requirements for a comprehensive review of the ESG program of the acquired company with the results of the review being incorporated into Alinda’s 100-day plan process.  If Alinda acquires control of the portfolio company, the policy requires that the portfolio company develop and implement an appropriate EHS policy tailored to its business and operation. Finally, the policy establishes reporting requirements calling for periodic and annual reports.

Corporate Governance Policy

The Corporate Governance Policy describes the purposes of the policy and Alinda’s objectives with regard to the evaluation and management of social responsibility, corporate governance, and ethical business practices matters associated with targets and portfolio companies.  Alinda requires that portfolio companies conduct their business activities ethically and in a manner that positively reflects a responsible corporate citizen that is actively engaged with the communities in which it operates.  Portfolio Companies are expected to comply with all applicable laws, regulations, and rules regarding the proper conduct of business for its operations and by its employees.

The policy establishes guidelines for the evaluation of the corporate governance matters relating to a targeted acquisition.  With respect to an acquisition, the Alinda transaction team will evaluate, among other things:

  • the target’s performance against business ethics rules and related applicable laws and regulations
  • the target’s existing corporate governance programs (including those designed to prevent corrupt practices)
  • the target’s existing practices in community involvement

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

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02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

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02.3. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

The Funds’ Advisory Committees consist of representatives of Limited Partners not affiliated with the General Partner. The Advisory Committees meet as required to consult with the General Partner as to, among other things, conflicts of interest. On any issue involving actual conflicts of interest not addressed in the Partnership Agreement, the General Partner will be guided by its good faith judgment as to a Fund’s best interests. In the event that any matter arises that the General Partner determines in its good faith judgment constitutes an actual conflict of interest between the Fund and the General Partner or its affiliates, the General Partner may take such actions as may be necessary, practical or appropriate to ameliorate the conflict (and upon taking such actions approved by the Advisory Committee, the General Partner will be relieved of any responsibility for the conflict of interest).

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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