Climate Change Data

Environmental Metrics

ESG Focus Areas

• Responsible Employer
• Responsible Investor
• Good Corporate Citizen

Environmental Achievements

• Reduced Scope 1 and 2 (location-based) GHG emissions by 13%
• Reduced Scope 3 GHG emissions by 5%
• Installed energy-efficient LED lighting in London office
• Replaced data center hardware, significantly reducing energy consumption
• Purchased 100% renewable electricity for London office (80% of total consumption)
• Implemented Secure Print technology, reducing paper consumption by 15%
• Recycled 1,693.1 tonnes of waste

Social Achievements

• Launched a graduate recruitment scheme
• 45% of new hires were female
• More than one in eight of 3i’s total UK employees were people with a BME background
• No incidents of discrimination recorded
• 83% participation in UK Share Incentive Plan
• 10% unplanned employee turnover rate
• Charitable giving totalled £288,000

Governance Achievements

• No confirmed incidents of corruption
• Compliance with FCA principles of conduct
• Implemented comprehensive compliance training programs
• Established robust anti-bribery and anti-money laundering policies
• Active participation in policy forums through industry representative bodies

Climate Goals & Targets

Environmental Challenges

• Maintaining high ESG standards while managing a large investment portfolio
• Minimizing environmental impact despite a relatively small operational footprint
• Achieving better gender and ethnic diversity within a small organization

Mitigation Strategies

• Embedded Responsible Investment policy into investment and portfolio management processes
• Implemented an Environmental Management System
• Encouraged diversity through culture and policies, without setting specific targets
• Regularly reviewed compliance with established standards of conduct and behavior

Supply Chain Management

Responsible Procurement

• Policies and procedures for sourcing products and services responsibly
• Collaboration with service providers to address issues
• Monitoring ESG issues with key suppliers
• Request for proposals including specific language relating to the Modern Slavery Act

Climate-Related Risks & Opportunities

Opportunities

• Investments in renewable energy (e.g., offshore wind farms, landfill gas generation)

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: Carbon Credentials Energy Services Ltd (for GHG emissions)

Awards & Recognition

• CDP’s “Most improved” award for UK-based responders in 2016

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• London and Luxembourg offices procure electricity from 100% renewable sources.
• Overall Scope 1 and 2 emissions decreased by 16.6% due to office closure and decreased UK grid emission factor.
• Implemented energy-efficient LED lighting and encouraged employees to switch off equipment to reduce energy consumption.

Social Achievements

• Rolled out unconscious bias training program for selected staff.
• 58% of new hires were female.
• Launched a graduate recruitment scheme.
• No incidents of discrimination recorded.
• Supported employees' wellbeing through various initiatives including flexible working, private medical insurance, and employee assistance program.
• Charitable giving totaled £550,000.

Governance Achievements

• Maintained memberships in Dow Jones Sustainability Europe Index, FTSE4Good Index Series, and Ethibel Sustainability Index.
• Published Modern Slavery statement.
• Implemented a robust Responsible Investment Policy.

Climate Goals & Targets

Environmental Challenges

• Increase in business travel leading to higher Scope 3 emissions.
• Insufficient capacity in EfW and plastics recycling installations in the Dutch and UK waste markets (for Attero).

Mitigation Strategies

• Rationalised business travel through clear guidelines and approvals.
• Encouraged use of teleconferencing and audiovisual solutions.
• Attero invested in a new steam turbine and Polymer Recycling Plant to increase capacity.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement Policy requiring due diligence on prospective suppliers, including ESG considerations.
• Focus on working with suppliers who support responsible sourcing.
• Inclusion of Modern Slavery Act related obligations in contracts.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Investments in renewable energy (e.g., offshore wind farms, energy from waste), decarbonisation in the automotive industry.

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14064-3 (for emissions verification)

Third-party Assurance: Carbon Credentials Energy Services Ltd

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Responsible Investment
• Responsible Employer
• Good Corporate Citizen

Environmental Achievements

• London and Luxembourg offices procure electricity from 100% renewable sources.
• Overall Scope 1, 2 (market-based), and 3 emissions decreased by 61%, driven principally by a reduction in business travel due to Covid-19 travel restrictions.

Social Achievements

• Launched graduate recruitment scheme in 2015, with graduates from 10 different nationalities and 18 universities.
• Set up a £5 million Covid-19 charitable fund to alleviate hardships.
• Maintained staff engagement through regular updates and virtual meetings during the pandemic.
• Provided specialist mental health and wellbeing training for all staff.

Governance Achievements

• Established a robust Responsible Investment policy embedded in investment and portfolio management processes.
• Implemented strong processes to assess and manage ESG risks in the portfolio.
• Maintained compliance with regulatory requirements across multiple jurisdictions.

Climate Goals & Targets

Environmental Challenges

• Impact of the Covid-19 pandemic on portfolio companies, particularly those in travel and automotive sectors.
• Climate change affecting investments through regulatory changes, consumer preferences, and stakeholder pressure.
• Cyber security vulnerabilities for many companies.

Mitigation Strategies

• Provided operational and financial support to portfolio companies during the pandemic (e.g., equity injection to Hans Anders, liquidity support to Audley Travel).
• Ensured portfolio companies understand their environmental impacts and adapt to regulatory and market developments; facilitated a carbon roundtable.
• Supported material investment in IT and security infrastructure in portfolio companies; conducted cyber audits; raised cyber risk awareness.

Supply Chain Management

Responsible Procurement

• Policies and procedures for responsible sourcing; collaboration with suppliers; monitoring ESG issues; due diligence on prospective suppliers.

Climate-Related Risks & Opportunities

Transition Risks

• Changes in regulation, consumer preferences, stakeholder pressure to reduce environmental footprint.

Reporting Standards

Frameworks Used: GRI Core, SASB

Third-party Assurance: Carbon Intelligence (GHG emissions data)

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity, Equity, and Inclusion
• Responsible Investment

Environmental Achievements

• Improved collection of GHG emissions data from over 70% of Private Equity portfolio companies and over 80% of economic Infrastructure investments.
• London, Luxembourg and New York offices procure electricity from 100% renewable sources.
• Many portfolio companies have set realistic and achievable emission reduction targets.

Social Achievements

• Launched a series of talks with external speakers to provide insights to employees on career development, including DE&I topics.
• Havea opened an inter-company crèche at its headquarters.
• Action partners with initiatives to reintegrate people distanced from the labour market.

Climate Goals & Targets

Environmental Challenges

• Climate change affecting investments through regulatory changes, consumer preferences, and stakeholder pressure.
• Covid-19 pandemic impacting operations and portfolio.
• Russia's invasion of Ukraine causing supply chain disruptions and increased commodity/energy prices.

Mitigation Strategies

• Engaging with portfolio companies to support management of operational and financial issues related to Covid-19 and providing financial support where needed.
• Refining investment screening process to include earlier assessment of climate risks and opportunities.
• Collecting GHG emissions data from portfolio companies and improving processes for analysis.
• Carrying out climate scenario analysis for portfolio companies.
• Organizing training programs on climate change risks and opportunities.
• Donating £1 million to UNICEF and MSF Emergency Fund in response to the Ukraine crisis.

Supply Chain Management

Responsible Procurement

• Policies and procedures for responsible sourcing
• Due diligence on prospective suppliers
• ESG monitoring of key suppliers
• Requirement for suppliers to have anti-bribery and corruption controls and comply with Modern Slavery Act

Climate-Related Risks & Opportunities

Transition Risks

• Changes in regulation
• Changes in consumer preferences
• Stakeholder pressure to reduce environmental footprint

Opportunities

• Investments in businesses benefiting from the transition to a low-carbon economy

Reporting Standards

Frameworks Used: GRI, SASB

Certifications: ISO 14064-3 (limited assurance for GHG emissions)

Third-party Assurance: Carbon Intelligence (limited assurance for GHG emissions); Internal Audit team (verification work)

Environmental Metrics

ESG Focus Areas

• Invest responsibly
• Recruit and develop a diverse pool of talent
• Act as a good corporate citizen

Environmental Achievements

• Reduced absolute Scope 1 and 2 (market-based) GHG emissions by 42% by FY2030 from a FY2023 base year (target)
• 68% per megawatt-hour (“MWh”) reduction in GHG emissions from the electricity generation sector within its eligible portfolio by FY2030 from a FY2023 base year (target)
• 31% of its listed and eligible Private Equity portfolio by invested capital setting SBTi validated targets by FY2028 and 100% by FY2040 from a FY2023 base year (target)

Social Achievements

• Established a Diversity, Equity and Inclusion (“DE&I”) steering group
• Expanded the reach of its Leading with Impact Programme
• Implemented an internal mentoring programme
• Participated in the #10000BlackInterns initiative
• Offered reasonable flexibility at work and a range of family-friendly policies
• Published a Menopause Policy

Governance Achievements

• Updated Responsible Investment (“RI”) policy in May 2024 to reflect the introduction of considerations and criteria to enable 3i to achieve its science-based targets
• Implemented a new software tool to increase the consistency and quality of the ESG data received from portfolio companies
• Up to 10% of the maximum annual bonus opportunity for executive management was tied to progress against a number of ESG targets in FY2024

Climate Goals & Targets

Environmental Challenges

• Climate change affecting many investments through regulatory changes, consumer preferences, and stakeholder pressure
• Potential adverse impacts on human rights resulting from portfolio company actions or operations
• Occupational health and safety risks across many portfolio companies
• Impact of environmental and social regulation on portfolio companies
• Cyber security risks
• Fraud risks
• Sanctions risks
• Changing consumer preferences towards more sustainable options

Mitigation Strategies

• Climate change scenario analyses to refine understanding and assessment of climate risks
• Assessment of human rights risks in detailed portfolio company reviews, focusing on supply chain policies and audits
• Ensuring portfolio companies have robust health and safety policies and procedures
• Ensuring portfolio companies stay abreast of regulatory developments and comply timely
• Actively promoting cyber resilience in portfolio companies
• Managing fraud risk through investment and portfolio management processes
• Complying with all applicable UK and international economic sanctions
• Monitoring and managing market developments and customer preferences

Supply Chain Management

Supplier Audits: 2,104 assessments at suppliers and factories in 2023 (Action example)

Responsible Procurement

• Ethical sourcing policy (Action example)
• Minimum ESG requirements within RI policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, flooding, heatwaves

Transition Risks

• New regulations and commitments, carbon pricing mechanisms, technology changes, changing consumer and investor preferences, market shifts, reputational risks

Opportunities

• Investment in lower-emissions products and services, compliance with regulations, carbon pricing mechanisms

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Third-party Assurance: Accenture (limited assurance to ISO 14064-3 standard for own operations emissions)

Awards & Recognition

• Top ESG Performer in Orbis Advisory 2023 Private Equity ESG Transparency Index