InfraRed Capital Partners sets Net Zero targets

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InfraRed Capital Partners (“InfraRed”) today published its net zero interim targets, in line with its commitment to the Net Zero Asset Managers (NZAM) Initiative. This is the latest milestone for InfraRed as it seeks to reach net zero emissions across its entire portfolio and to have a long-term, positive impact on societies and the environment.

These targets were set based on the Paris-aligned Investment Initiative’s (PAII) Net Zero Investment Framework (NZIF) for Infrastructure, developed by The Institutional Investors Group on Climate Change (IIGCC)[1]. InfraRed’s new interim targets include:

  • Portfolio Coverage: InfraRed has set an interim target of having 70% of AUM “aligned”[2] or “aligning”[3] to net zero by 2030 from the baseline of 8% of its AUM as of 31 December 2021. The ultimate target is to have 100% of AUM “aligned” by 2040.
  • Climate Solutions: InfraRed has set a target of 50% of its AUM to be allocated in climate solutions by 2025, from a baseline of 45% in 2021. InfraRed is seeking to substantially grow its AUM between now and 2025, and this target will result in a material growth in capital allocation toward the climate transition
  • Engagement Threshold: InfraRed has committed to ensure that it is engaging, directly or collectively, with the portfolio companies responsible for 90% of its financed emissions by 2030. This engagement will focus on a wide range of climate change aspects, such as data collection, energy performance, net zero strategies and governance.

These interim targets relate to 83%[4] of InfraRed’s current assets under management and will be reviewed every five years at a minimum. InfraRed will publish its progress in its annual sustainability report.

Werner von Guionneau, Chief Executive Officer of InfraRed Capital Partners, said:

“We are excited to set these ambitious targets for our business, as we seek to play our part in addressing the climate crisis. When we embarked on setting these targets over a year ago, an infrastructure specific framework for asset managers did not exist; I’m proud that we’ve shown leadership in the sector. We firmly believe that tackling this crisis and creating a positive impact on societies and the environment will underpin strong investor returns.”

“Achieving global net zero emissions ultimately relies on shared ambition and all stakeholders working together: investors, public sector clients, service providers, suppliers, and individuals. The cost of inaction will only be greater in the long run, which is why engagement forms a fundamental part of our net zero approach.”

InfraRed became a member of the NZAM Initiative in July 2021. The group is made up of 291 international asset managers representing $66 trillion AUM who are committed to supporting the goal of net-zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5°C.

 

[1] https://www.iigcc.org/news/net-zero-guidance-for-infrastructure-asset-class-launched-by-iigcc/

[2] To be considered “aligned”, the asset must have forecast emissions performance against targets set as well as have a decarbonisation strategy (including capital allocation) to support the reduction projection.

[3] To be considered “aligning”, the asset must have short- and medium-term targets that are underpinned by science-based pathways for its sector; it must disclose all material scope emissions (including scope 3) and evidence the governance of net zero plans.

[4] As at 30 June 2022. Funds where assets are currently being sold or transferred in line with the original fund strategy have been excluded from the commitment.

 

About InfraRed Capital Partners

InfraRed Capital Partners is an international infrastructure investment manager, with more than 180 professionals operating worldwide from offices in London, New York, Sydney and Seoul. Over the past 25 years, InfraRed has established itself as a highly successful developer and custodian of infrastructure assets that play a vital role in supporting communities. InfraRed manages US$14bn+ of equity capital[1] for investors across the globe, across listed and private funds in both income and capital gain strategies.

A long-term sustainability-led mindset is integral to how InfraRed operates as it aims to achieve lasting, positive impacts and deliver on its vision of Creating Better Futures. InfraRed has been a signatory of the Principles of Responsible Investment since 2011 and has achieved the highest possible PRI rating[2] for its infrastructure business for seven consecutive assessments, having secured a 5 stars rating for the 2021 period. It is also a member of the Net Zero Asset Manager’s Initiative, a certified CarbonNeutral® company[3], and is a TCFD supporter.

InfraRed is part of SLC Management, the institutional alternatives and traditional asset management business of Sun Life. InfraRed represents the infrastructure equity arm of SLC Management, which also incorporates BentallGreenOak, a global real estate investment management adviser, and Crescent Capital, a global alternative credit investment asset manager.

www.ircp.com

 

[1] Data as at Q2 2022. Equity Capital is calculated using a 5-year average FX rate.

[2] Principles for Responsible Investment (“PRI”) ratings are based on following a set of Principles, including incorporating ESG issues into investment analysis, decision-making processes and ownership policies. More information is available at https://www.unpri.org/about-the-pri

[3] In accordance with The CarbonNeutral Protocol. Further information is available at https://carbonneutral.com/the-carbonneutral-protocol