Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Sustainable Energy
• Responsible Investment

Environmental Achievements

• Zero harm to employees and contractors in OFTO investments.
• 95% waste diverted from landfill in Cadent (86% in 2018/19).
• 68% reduction in Cadent's operational Greenhouse Gas emissions.
• Tideway reduced its base-case carbon footprint by 19% (199,000 tonnes) through initiatives like river transport of materials.
• Angel Trains increased the percentage of electric trains under ownership from 64% to 69%.

Social Achievements

• Over 21,800 additional community hours provided by social infrastructure investments.
• Reliance Rail received a five-star GRESB Infrastructure rating (94/100), ranking 12th out of 406 assessments and first among rail companies.
• Tideway recorded 2,514 sustained FTE jobs, with 55% of the workforce being female.
• Cadent improved its employee Accident Frequency Rate to 0.06 in 2020.

Governance Achievements

• Established an ESG Committee in March 2021.
• Investment Adviser received an A+ ranking for both Strategy and Governance and Infrastructure modules from the UN PRI.
• Aligned investment activities with the objectives of the Paris Agreement.
• Committed to aligning with the recommendations of the TCFD.

Climate Goals & Targets

Environmental Challenges

• Climate change presents both transitional and physical risks to investments.
• Covid-19 pandemic caused disruptions.
• Need to reduce embodied carbon in construction.
• Improving gender balance in leadership positions within Cadent.

Mitigation Strategies

• Introduced additional requirements for assessing transitional and physical risks of climate change.
• Successfully worked with Investment Adviser to avoid Covid-19 disruptions.
• Closely monitoring government policy developments and progress in reducing embodied carbon.
• Cadent is committed to achieving an overall improved gender balance across its business.

Supply Chain Management

Responsible Procurement

• Focus on long-term value for stakeholders
• Proactive maintenance of an engaged supply chain for investments

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Transition to low-carbon fuels (hydrogen, biomethane)
• Energy efficiency projects

Reporting Standards

Frameworks Used: UN PRI, TCFD, Paris Agreement, GRESB Infrastructure, BREEAM, LEED, S&P Global Ratings, IFC Performance Standards, World Bank Environmental, Health and Safety Guidelines

Certifications: ISO 9001, OHSAS 18001, ISO 14001, ISO 18001

UN Sustainable Development Goals

• SDG 3 (Good Health and Wellbeing)
• SDG 4 (Quality Education)
• SDG 6 (Clean Water and Sanitation)
• SDG 7 (Affordable and Clean Energy)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 11 (Sustainable Cities and Communities)
• SDG 13 (Climate Action)
• SDG 16 (Peace, Justice and Strong Institutions)

Investments support these SDGs through the provision of essential services, sustainable infrastructure, and clean energy.

Sustainable Products & Innovation

• HyDrive hybrid drive system (Angel Trains)
• Biomethane connections (Cadent)
• Hydrogen blending (Cadent)

Awards & Recognition

• FTSE 250 Top 10 Best Performers for gender diversity (2020)

Environmental Metrics

ESG Focus Areas

• Climate action
• Energy transition
• Supporting Ukraine and Central and Eastern Europe
• ESG integration into investment decision-making
• Corporate culture and employee well-being
• Net zero
• Climate risk assessment
• Biodiversity

Environmental Achievements

• Reduced scope 1, 2 (market-based), and 3 (non-investment) emissions by 9% in 2021 compared to 2020.
• Avoided over 72,000 tCO2e emissions in 2021 through Enery's solar generation assets.
• Saved 39 GWh of energy per annum through MEEF investments.
• Reduced CO2e emissions by 15,650 tonnes per annum through MEEF investments.
• Achieved PAS 2060: Carbon Neutrality certification in 2021.

Social Achievements

• Financially supported Ukraine's humanitarian effort.
• Launched the Green New Deal Fund (GNDF) to support SMEs and the public sector in meeting net-zero targets.
• Continued various initiatives to support employee mental health and well-being.
• Formed a D&I Committee to champion diversity and inclusion across the organization.
• Supported the ALL4Kids charity initiative.

Governance Achievements

• Supported INPP's categorisation as an Article 8 Financial Product under the EU SFDR.
• Updated ESG data collection tools and processes to support SFDR, EU Taxonomy, and TCFD disclosures.
• Enhanced ESG integration across the investment lifecycle, including EU Taxonomy considerations and climate risk assessments.
• Developed an Embodied Carbon Policy to reduce emissions from major development investments.

Climate Goals & Targets

Environmental Challenges

• Global economic challenges and the invasion of Ukraine impacting international energy policy and investment.
• Balancing the electricity network due to the variable nature of renewable assets.
• Establishing portfolio-level GHG targets for the diverse infrastructure asset class.
• Quantifying GHG emissions for all mandates to establish a baseline for Paris-aligned target setting.

Mitigation Strategies

• Regularly considering risk processes and responding across portfolios.
• Investing in battery energy storage systems to support renewable energy integration.
• Taking a sector-by-sector approach to creating a net zero plan across the investment portfolio.
• Collecting GHG activity data from all investments to establish an emissions baseline.
• Developing innovative financing solutions to support the transition to net zero.

Supply Chain Management

Responsible Procurement

• Embodied Carbon Policy (from 2022 onwards)

Climate-Related Risks & Opportunities

Physical Risks

• Flooding and sea level rise

Transition Risks

• Policy changes
• Market shifts
• Reputational impacts

Opportunities

• Investment in renewable energy generation and storage
• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GHG Protocol, SFDR, EU Taxonomy, TCFD, UN PRI, SDGs, PAS 2060

Certifications: PAS 2060: Carbon Neutrality (2021)

UN Sustainable Development Goals

• SDG 3
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 15
• SDG 17

Investments support various SDGs through infrastructure development, renewable energy, education, healthcare, and community engagement.

Sustainable Products & Innovation

• Battery energy storage systems
• Electric vehicle charging infrastructure

Awards & Recognition

• Amber Horizons won Best Corporate Sustainability Strategy

Environmental Metrics

ESG Focus Areas

• Sustainable Development Goals (SDGs)
• Environmental, Social, and Governance (ESG) integration
• Climate change
• Net zero

Environmental Achievements

• Reached financial close for the long-term operation of the transmission link to the 714MW EA1 offshore wind farm, increasing contribution to net zero targets.
• OFTO portfolio accounts for 23% of the Company’s portfolio by investment fair value and contributes to the UK’s carbon reduction targets and the SDGs: SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action).

Social Achievements

• Investments support at least one SDG; key contributions include: >173,000 students attending schools, >2,700,000 homes powered by renewable energy, >154,000,000 annual passenger journeys through sustainable transport investments.
• Worked with Collecteco to support local communities through the donation of fixtures, fittings and equipment.

Governance Achievements

• Categorized itself as an Article 8 financial product under SFDR.
• Enhanced approach to disclosing climate change risks and opportunities in line with TCFD recommendations.

Climate Goals & Targets

Environmental Challenges

• Market volatility impacting share price.
• Cost of living crisis and industrial action impacting service providers.
• Interest rate increases.
• Covid-19 pandemic.
• War in Ukraine (indirect impacts).

Mitigation Strategies

• Resilient portfolio with inflation-linked cash flows and active asset management.
• Contingency plans for service provider issues.
• Hedging strategies and prudent use of CDF.
• Business model offering protection against adverse scenarios.
• Active monitoring of the war in Ukraine's indirect impacts.

Supply Chain Management

Responsible Procurement

• Annual Management Engagement Committee review
• Ad-hoc engagement
• Quarterly Board meetings and reporting
• Investment Adviser managing investment supply chain

Climate-Related Risks & Opportunities

Physical Risks

• Flood, tropical cyclone, extreme wind and heat

Transition Risks

• Regulatory changes, decarbonisation of heat, increased electrification of transportation

Opportunities

• Infrastructure investment opportunities in the transition to net zero

Reporting Standards

Frameworks Used: SFDR, TCFD, SDGs, PCAF

UN Sustainable Development Goals

• Goal 7
• Goal 13
• Goal 4
• Goal 6
• Goal 11
• Goal 9
• Goal 16

Investments support at least one SDG; key contributions include: >173,000 students attending schools, >2,700,000 homes powered by renewable energy, >154,000,000 annual passenger journeys through sustainable transport investments.

Awards & Recognition

• 5-star PRI rating for Investment and Stewardship Policy and Infrastructure modules

Environmental Metrics

ESG Focus Areas

• Net Zero
• EU Taxonomy Alignment
• Environmental Performance
• Social Performance (Health & Safety, Diversity, Equality & Inclusion)
• Governance

Environmental Achievements

• 100% of investments have an environmental management system (as of 31 December 2023)
• 100% of investments have initiatives to improve environmental performance (as of 31 December 2023)
• Tideway project expected to reduce stormwater sewage discharges to the River Thames by about 37 million cubic meters annually

Social Achievements

• 100% of investments have undergone a biennial, independent health and safety audit (as of 31 December 2023)
• 100% of investments have initiatives to improve health and safety performance (as of 31 December 2023)
• 100% of operating companies transparently disclose delivery of diversity, equality, and inclusion policies (as of 31 December 2023)
• Tideway Legacy Programme delivers approximately £1.72 of social value for every £1 invested

Governance Achievements

• 100% of investments have policies and processes in line with UN Global Compact Principles (as of 31 December 2023)
• 100% implementation of INPP minimum Governance policies and procedures on: Conflicts of Interest; Financial Crime Mitigation; Diversity and inclusion; and Whistleblowing (as of 31 December 2023)

Climate Goals & Targets

Environmental Challenges

• Limited influence over operational activities in some investments (minority stakes, debt investments)
• Data availability challenges for GHG emissions in some investments
• Contractual or regulatory limitations on altering energy usage or equipment configurations in some concession agreements

Mitigation Strategies

• Collaboration with investee companies to support ESG reporting and decarbonisation strategies
• Use of industry benchmarks to estimate GHG emissions where primary data is unavailable
• Collaboration with public sector clients to assess climate mitigation strategies and incorporate them into future agreements
• Active engagement with investments and public sector partners to achieve net zero emissions

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Flood
• Tropical cyclone
• Extreme wind
• Heat

Transition Risks

• Changes to net zero transition

Opportunities

• Expansion of OFTO assets
• Increased rail passenger demand
• Opportunities for hydrogen distribution infrastructure

Reporting Standards

Frameworks Used: UN SDGs, TCFD, SFDR, PCAF, GRI, NZIF

Third-party Assurance: Third-party verification of Tideway’s Scope 3 (embedded) carbon data

UN Sustainable Development Goals

• 3
• 4
• 6
• 7
• 9
• 11
• 16

Investments support targets set by these SDGs

Environmental Metrics

ESG Focus Areas

• Sustainable Development Goals (SDGs)
• Environmental, Social, and Governance (ESG)
• Net Zero

Environmental Achievements

• 100% of investments support at least one SDG
• Moray East OFTO investment capable of powering the equivalent of c.1.0 million homes, increasing the total equivalent across the Company’s OFTO portfolio to c.3.7 million homes.
• Tideway project nearing completion, expected to significantly improve water quality of the Thames

Social Achievements

• Investments support over 180,000 students attending schools developed and/or maintained by the Company
• Tideway project reducing discharges by c.37 million cubic meters annually
• BeNEX's contribution to transporting fans safely during the 2024 European Football Championship in Germany
• BeNEX's regional rail operations in Germany seeing increased usage due to the "Deutschlandticket"

Governance Achievements

• Appointment of Giles Adu to the Board
• Ongoing periodic rotation of Board responsibilities and committee chairs
• Board will be entirely constituted of independent directors after the 2025 AGM
• Third-party review of ESG data controls
• Alignment with the finalised guidance relating to the anti-greenwashing rule

Climate Goals & Targets

Environmental Challenges

• Volatile macroeconomic environment and challenges faced by the UK listed investment trust sector
• Company’s shares trading at a discount to their NAV
• Outage on the EA1 OFTO due to an offshore cable fault
• Uncertainty regarding the UK Government's approach to infrastructure investment and the role of private investors
• Potential impact of Thames Water's financial position on Tideway investment

Supply Chain Management

Responsible Procurement

• Active management and mitigation of counterparty risk

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: UN SDGs, TCFD, SFDR, PRI