Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 70% of portfolio companies conducted an assessment of business risks and opportunities associated with environmental and/or social issues, or developed a sustainability policy.
• Garnica, a portfolio company, complied with all ESG regulations applicable in Spain and France with no major risk of pollution or safety.
• Staci, an exited portfolio company, achieved Ecovadis Gold status, ranking in the top 1% of logistics companies for ESG performance.

Social Achievements

• 84% of the approximately 70% of portfolio companies addressing ESG assigned specific responsibilities for ensuring compliance with ESG policies.
• Staci implemented policies to reduce accidents at work and long-term illnesses; partnered with organizations to promote employment of disabled workers; and implemented policies to promote gender equality.
• Low litigation rates among portfolio companies due to social and/or commercial activities.

Governance Achievements

• ICG completed its fourth UNPRI filing, achieving a Grade A in Strategy and Governance and Direct Private Equity modules.
• A proposed investment with a financial services company resulted in a covenant in the financing structure to address governance shortfalls.
• ICG included ESG within the commercial sections of Private Placement Memorandums (PPMs) for several funds.

Climate Goals & Targets

Environmental Challenges

• Varying levels of ICG's influence with senior management of portfolio companies depending on investment type.
• Some portfolio companies lacked robust ESG policies or systems.
• Need to further integrate ESG into North American Private Debt and Strategic Equity businesses.

Mitigation Strategies

• ICG works closely with portfolio companies to increase ESG awareness and make it a business priority.
• ICG distributes annual ESG surveys to portfolio companies.
• ICG is integrating these businesses and having investment members join the RI Committee.
• ICG is embedding ESG into investment strategies and including ESG in PPMs.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNPRI

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Optimization
• Diversity
• Supply Chain Management
• Social Impact

Environmental Achievements

• 80% reduction in own operations emissions targeted by 2030
• Offset FY2019 emissions through partnership with SolarAid
• New London head office to source 100% renewable energy and sustainable materials
• Carbon footprint analysis of Europe Fund VII commenced

Social Achievements

• Launched Future Teachers Programme with Supporting Education Group
• Supported Marston in deploying body-worn video cameras, improving customer and agent safety
• Euro Cater prevented 284,000kg of food waste in 2017-18
• Garnica financed plantations comprising over 50,000 trees

Governance Achievements

• Updated Responsible Investing Policy
• Implemented company-wide Exclusion List and ESG Screening Checklist
• Introduced Reprisk, an online ESG screening and monitoring tool
• 100% of AUM covered by Responsible Investing Policy

Climate Goals & Targets

Environmental Challenges

• Lack of good quality corporate ESG reporting in private debt and equity
• Climate change impacts on global economy and portfolio companies
• Integrating ESG deeper into investment practices and business as a whole

Mitigation Strategies

• Joined PRI Investor Reference Group on Corporate Reporting
• Engaging with portfolio companies to set ESG targets and KPIs
• Conducting carbon footprint analysis of portfolio companies
• Developing and implementing enhanced Responsible Investing framework

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Monitoring and auditing wood suppliers (Garnica)
• Promoting sustainable products through webshop (Euro Cater)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Shift towards electrification of vehicles (Capital Markets case study)

Opportunities

• Investments in energy-efficient technologies (Marston)

Reporting Standards

Frameworks Used: UN Principles for Responsible Investment (PRI), Task Force on Climate-related Financial Disclosures (TCFD)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 6, 7, 9, 11 (Sale & Leaseback)
• SDG 7 (SolarAid)
• SDG 12 (Euro Cater)

Initiatives contribute to these goals through various means, such as energy efficiency improvements, renewable energy use, sustainable resource management, and community development.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Sir Martyn Lewis Award (ThinkForward program)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Supply Chain Management
• Diversity & Inclusion
• Employee Wellbeing
• Responsible Procurement
• Cybersecurity

Environmental Achievements

• Reduced operational emissions by 21% compared to the prior year.
• Sourcing 100% renewable energy for new London headquarters.
• Achieved a Gold SKA rating for new London office.
• Park Holidays improved double-glazed and centrally heated caravans from 49% to 77%
• 98.5% of Park Holidays’ waste diverted from landfill.

Social Achievements

• Launched several initiatives to improve employee wellbeing.
• Supported two charities to alleviate the impact of Covid-19.
• 63% of portfolio companies provided products/services or made donations to support Covid-19 relief efforts.
• Workhuman created “Thank You Healthcare” site with over 7.5 million expressions of gratitude.
• Annual commitment of £100,000 to ThinkForward charity and staff volunteering program.

Governance Achievements

• Received an A+A+A score from the PRI.
• Received an ‘A-’ score for CDP reporting.
• Implemented a Responsible Procurement Policy.
• Developed a climate risk tool to assess investment opportunities.
• Incorporated climate-related risks and opportunities into financial filings.

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic and its impact on portfolio companies and operations.
• Climate change risks and opportunities across the portfolio.
• Cybersecurity risks for mid-market businesses.
• Supply chain disruptions

Mitigation Strategies

• Supported portfolio companies with Covid-19 relief efforts.
• Conducted a climate risk assessment and developed a screening tool.
• Engaged with portfolio companies to set climate-related KPIs and targets.
• Conducted an external assessment of cyber risk across portfolio companies.
• Developed tools and resources to improve procurement policies and practices.

Supply Chain Management

Responsible Procurement

• Developed a suite of tools and resources to facilitate improvement of procurement policies and practices.
• Established a Responsible Procurement Policy.
• Supplier Risk questionnaires assessing ESG factors.

Climate-Related Risks & Opportunities

Physical Risks

• Water shortages
• Flooding
• Extreme temperatures
• Wildfires

Transition Risks

• Regulatory changes
• Changing consumer behavior

Opportunities

• Investments in renewable energy and sustainable infrastructure.

Reporting Standards

Frameworks Used: PRI, TCFD, SASB, UN SDGs, IRIS+

Certifications: B Corp (for some portfolio companies), AENOR certification of “protocols against Covid-19” (for Ingesport), SKA Gold (for Procession House), LEED Platinum (for Warsaw office)

UN Sustainable Development Goals

• SDG 7 (Affordable and clean energy)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 11 (Sustainable cities and communities)

Infrastructure Equity strategy designed to contribute to SDGs.

Awards & Recognition

• Shortlisted for UN PRI award in ‘ESG Incorporation Initiative of the Year’ category.

Environmental Metrics

ESG Focus Areas

• Climate change
• Responsible Investing
• People and culture
• Governance and business ethics
• Cyber risk
• Transparency

Environmental Achievements

• Committed to net zero GHG emissions by 2040, with Science Based Targets initiative (SBTi) approved targets to reduce direct emissions by 80% by 2030 and 100% of relevant investments to have SBTi-approved targets by 2030.
• Launched three sustainably-themed products (Sale and Leaseback, Infrastructure Equity, Real Estate Debt VI).
• Developed a Green Loan Framework for Real Estate Debt VI, financially incentivizing borrowers to improve sustainability.
• Raised c.$3bn in ESG-linked financing.

Social Achievements

• 42% of new hires were female (in the twelve months to 31 March 2021).
• Launched a graduate program with a focus on diversity (63% female and 37% ethnic minority).
• Launched a Wellbeing Survey and established a Covid-19 support hub.
• Introduced Wellbeing Champions globally.
• Maintained high employee engagement scores (96% in 2019 survey).

Governance Achievements

• Established a Responsible Investing Committee (since 2014).
• Appointed Stephen Welton as a designated Non-Executive Director on ESG matters.
• Appointed Amy Schioldager as the Non-Executive Director responsible for liaising with employees.
• Implemented an enhanced ESG framework for Europe VIII, focusing on climate change, human capital management, and diversity and inclusion.
• Developed a proprietary ESG risk rating.

Climate Goals & Targets

Environmental Challenges

• Limited coverage of ESG ratings for the Credit Fund Management platform's investment universe.
• Nascent practice of ESG reporting by private companies.

Mitigation Strategies

• Developing a proprietary ESG rating.
• Participating in the CDP private markets pilot to improve climate-related data availability and consistency.
• Implementing a dedicated ESG data management system.

Supply Chain Management

Supplier Audits: Annual screening of nearly 600 existing suppliers on modern slavery and wider environmental and social risks.

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Opportunities

• Development of sustainable investment products and strategies.

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, SFDR

UN Sustainable Development Goals

• SDG 7 (Clean Energy)
• SDG 13 (Climate Action)

Sustainably-themed products align with specific SDGs, focusing on climate-focused goals.

Sustainable Products & Innovation

• Sale and Leaseback
• Infrastructure Equity
• Real Estate Debt VI

Awards & Recognition

• Shortlisted for the 2020 PRI award in the ‘ESG Incorporation Initiative of the Year’ category (Infrastructure Equity).

Environmental Metrics

ESG Focus Areas

• climate change
• diversity and inclusion (D&I)
• digital resilience

Environmental Achievements

• Group Scope 1 and 2 (market-based) emissions decreased by 85% compared to FY20 baseline
• 1,703 MW of electricity consumed by ICG offices was from renewable sources in FY22, up from only 22.5% in FY21
• 58% of portfolio companies have set science-based emissions reduction targets, committing to a reduction of over 69 thousand tonnes of CO2e emissions

Social Achievements

• 41% female senior management in the UK, achieving UK Women in Finance Charter ambition a year early
• £4m committed from FY23 to FY25 to support new partner charities focusing on education and social mobility
• 75% response rate from employees globally in the first Inclusion Survey

Governance Achievements

• ESG data management platform deployed to support ESG integration, portfolio monitoring and reporting across 100% of AUM
• Continuously enhanced vigilance and controls over cyber risks at ICG
• 94% of portfolio companies where ICG has sufficient influence completed or launched an internal audit of cyber capabilities

Climate Goals & Targets

Environmental Challenges

• Nascent ESG disclosures among sub-investment grade private issuers
• Challenges in assessing net zero solutions for strategies not covered by SBTi
• Growing need to address human rights considerations in investment approach

Mitigation Strategies

• Developing a plan to systematically assess potential net zero solutions for strategies not covered by SBTi
• Engaging with industry groups and thought leaders to explore decarbonisation tools and net zero measurement frameworks
• Incorporating human rights considerations into investment approach and assessing links between human rights and other ESG priorities

Supply Chain Management

Supplier Audits: 442 suppliers reviewed in 2022

Responsible Procurement

• Supplier Code of Conduct outlining expectations on compliance with laws and regulations, ethical business practices, labor and human rights, environmental impact management, and supply chain risk management

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Investment in climate solutions, such as renewable energy infrastructure

Reporting Standards

Frameworks Used: GRI, SASB

Certifications: ISO 14064-3

Third-party Assurance: Carbon Intelligence (limited assurance)

UN Sustainable Development Goals

• SDG 7 (Clean Energy)
• SDG 13 (Climate Action)

Sustainably-themed products in real assets align with specific UN SDGs, including climate-focused goals.

Sustainable Products & Innovation

• Sustainably-themed products investing in real assets

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Decarbonisation
• Diversity, Equity, and Inclusion (DEI)
• Sustainability Governance
• Nature and Biodiversity
• Social Value
• Circular Economy

Environmental Achievements

• Alvinesa achieved a 48% reduction in Scope 1 and 2 emissions and a 70% reduction in emissions intensity vs FY21.
• Mercia Park project generated all concrete onsite, reduced HGV deliveries by 37%, and saved 34 tonnes of carbon by using Green Diesel.
• Ocea Smart Building reduced energy consumption and water usage by 15% on average through submeter installation, saving 33 million cubic meters of water per year.
• ICG Infrastructure Equity portfolio generated 5,226 GWh of renewable energy in 2023.

Social Achievements

• United Living provides new and renovated affordable housing, generating positive socio-economic impacts.
• Lucid Group launched a group-wide inclusion policy and improved employee engagement and reduced attrition.
• Supporting Education Group developed an impact evaluation framework focusing on eight outcomes for schools, educators, parents, and learners.
• Tottenham Hale development project employed 20% of its workforce from the local borough, established apprenticeships, and provided work experience placements.

Governance Achievements

• ICG developed an ICG Sustainability Priorities Tool (SPOTlight) to guide pre-investment sustainability assessment and post-investment engagement.
• ICG standardized sustainability content within Investment Committee memos.
• ICG updated its Climate Risk Assessment methodology.
• Gateway Services issued its inaugural ESG report outlining its sustainability priorities and progress.

Climate Goals & Targets

Environmental Challenges

• Data limitations, particularly where ICG does not have operational control of the asset.
• Comprehensive sustainability disclosures are still nascent among sub-investment grade private issuers.

Mitigation Strategies

• ICG onboarded a software platform to support with collection and analysis of asset-level sustainability data.
• ICG engages directly with issuers and collaborates with other stakeholders to improve transparency and disclosure of ESG performance and GHG emissions.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Investment in renewable energy assets

Reporting Standards

Frameworks Used: TCFD, SFDR, GRI, SASB, PMDR, IRIS+, UN SDGs

UN Sustainable Development Goals

• SDG 7 (Clean Energy)
• SDG 13 (Climate Action)

Many ICG products have sustainability frameworks designed to align with specific UN SDGs, particularly those focused on climate and clean energy.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity, and Inclusion (DEI)
• Responsible Investing

Environmental Achievements

• Retained CDP Climate Change Leadership score of A-
• Maintained MSCI ESG Ratings AAA
• Reduced Scope 1 and Scope 2 (market-based) emissions to 28 tCO2e, a 95% reduction compared to the 2020 base year.
• 64% of Relevant Investments (by invested capital) have set SBTi-validated targets or submitted for validation, achieving the interim target of 50% two years early.

Social Achievements

• Exceeded gender target of 30% women in leadership (36.3% reported)
• Launched Inclusive Recruitment program
• Continued charitable giving (£2.6m)
• Employee engagement score of 7.1/10

Governance Achievements

• Completed Board evaluation, identifying areas for improvement
• Refined disclosure on fund performance
• Amended dividend policy to be “progressive”
• Implemented a refreshed DEI strategy

Climate Goals & Targets

Environmental Challenges

• Challenging fundraising environment
• Reduced transaction velocity for equity-focused strategies
• Data limitations in measuring financed emissions and portfolio carbon footprint
• Need to improve data coverage and quality for climate metrics

Mitigation Strategies

• Diversified investment strategies
• Strong balance sheet and liquidity
• Focus on attracting and retaining talent
• Continued investment in platform and technology
• Proactive engagement with stakeholders
• Improved climate risk assessment methodologies

Supply Chain Management

Responsible Procurement

• Enhanced due diligence on key suppliers regarding sustainability metrics
• Supplier Code of Conduct
• Modern Slavery risk assessment of suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Shift in climate patterns

Transition Risks

• Changes to climate-related regulations
• Changes to market-related regulatory mechanisms
• Increased litigation
• Lower fund performance
• Lower asset valuations

Opportunities

• Growth in AUM
• Higher fund performance
• Higher asset valuations
• Development of energy-efficient products
• Climate-linked financing

Reporting Standards

Frameworks Used: TCFD, UN PRI, Science Based Targets initiative (SBTi)

Certifications: ISO 27001

Third-party Assurance: Ernst & Young LLP (EY) provided limited assurance over GHG emission metrics

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• Green loans
• Sustainability-linked financing

Awards & Recognition

• Real Deals’ ESG Large Cap House of the Year
• FT’s Climate Leader
• BVCA Excellence in ESG Special Recognition
• #1 by Honordex Inclusive PE and VC Index 2024