At GIP, making a positive contribution to the communities in which we operate is fundamental to our business and companies with which we work.
ESG at GIP
GIP’s ESG approach is results-focused and data-driven, seeking to integrate and manage ESG considerations throughout the life-cycle of an investment, focused on enhancing long-term value and delivering tangible improvements where feasible and appropriate. We believe that respecting environmental, health & safety, labor, social, governance and business integrity considerations underpins GIP’s license to operate large-scale, critical national and economic infrastructure that impacts millions of people across the globe. As such, ESG concerns have long been at the core of GIP’s approach to investing and operating our businesses in a safe and responsible manner. Climate change and broader ESG trends have intensiﬁed that focus.
GIP strives to adopt ESG best practices and became a signatory to the United Nations Principles for Responsible Investment (“UNPRI”) in 2020, providing third-party challenge and assurance internally and externally of our ESG performance. Furthermore, GIP endeavors to keep abreast of developments in ESG best practices through participation in industry group roundtables and leading collaboration with peers. We also recognize the importance of industry leadership on climate action, and as part of our commitment to mitigate the impacts of climate change, GIP seeks to align itself with leading organizations focused on climate change.
“We have conviction that there is a strong link between rigorous, outcome-focused ESG practices and better investment performance. As ESG tailwinds continue to accelerate, we believe that our ability to generate demonstrable results during our ownership will enhance the long-term value of our investments.”Adebayo O. Ogunlesi
GIP Chairman and Managing Partner
From ‘Letter to Investors’, GIP 2021 ESG Report
Dedicated ESG Team
GIP has a dedicated ESG team with responsibility for ensuring the consistent application of our approach, working hand in hand with our Investment and Business Improvement teams and portfolio companies. To execute GIP’s ESG objectives and support the desired intensity of improvements, GIP has significantly expanded its team in recent years, comprised of members with former investment backgrounds, regulatory and policy backgrounds, ESG specialists with industrial / corporate backgrounds and specialists with development / impact backgrounds.
GIP’s ESG Team is led by a GIP Partner who reports directly to the Ofﬁce of the Chairman and advises the Investment Committee. In addition, to accelerate the desired intensity of improvements and to provide detailed oversight, GIP created a cross-functional ESG Committee in 2020. GIP’s ESG Committee oversees the ESG program..
ESG Approach and Integration
Our ESG approach is harmonized across all our equity and credit funds. Our policy and approach are guided by responsible investing best practices including the UNPRI, World Bank Group Environmental, Health and Safety Guidelines, International Finance Corporation Performance Standards, and Sustainability Accounting Standards Board. View our ESG Policy here.
GIP seeks to thoughtfully integrate and manage our materiality-based and disciplined ESG approach throughout the investment life-cycle and aims to ensure we consider the key factors for a particular sector and country allowing us to concentrate on what we believe is most critical. We will have variations in our investment approach and integration of ESG depending on type of investments (e.g., industry sector, geography, equity / credit, ownership structure / influence). ESG considerations for our equity investments are integrated into our investment process, from origination to exit, with the goal of enhancing positioning and long-term value and delivering results, while GIP’s ESG integration for credit products primarily focuses on negative screening during sourcing opportunities, evaluation of material ESG factors during due diligence, and where possible, ongoing monitoring after investment.
GIP’s ESG integration approach for equity funds typically includes (1):
- Screening investment opportunities based on GIP’s Exclusions List (negative screening) and based on GIP’s desired ESG investment attributes (positive screening);
- Identifying and assessing risks and opportunities during due diligence;
- Developing and executing on an improvement plan during our ownership, refining that plan with the goal of driving up performance in line with peers, regulation and international best practice;
- Setting tailored targets for ESG improvements, including a rigorous decarbonization plan; and
- Focusing on delivering tangible results to create an attractive ESG case for incoming buyers when GIP exits.
- (1) For each investment, the approach will be applied to the extent feasibleand appropriate in GIP’s discretion.
For our credit investments, we seek to ensure that reputational, financial, and legal risks to GIP and subsequently our investors have been addressed prior to a transaction completion due to our often limited level of influence and governance rights post investment.
GIP’s ESG integration for credit products therefore focuses primarily on:
- Negative screening during sourcing opportunities;
- Evaluation of material ESG factors during diligence by ESG experts with support from third-party advisors, as needed; and
- Ongoing monitoring through the life of the investment, consistent with any negotiated arrangements in applicable transaction documentation.
- Extract from GIP’s ESG reports shared with Investors. Statistics shown represent GIP’s Flagship Funds (GIP II, GIP III and GIP IV), GIPA, GIP EM, SMAs (excluding Paine Field) and Continuation Funds as of 31 December 2021, unless otherwise stated. Percentages based on number of portfolio companies.
- In addition, SunPower has enabled the installation of solar projects that generated ~27 TWh renewable energy which is estimated to have avoided 19 million metric tonnes of CO2e for its customers in 2022.
- Where reported data is not available, avoided emissions are estimated by ICE Data Services. ICE Data Services utilizes a similar methodology to how portfolio companies calculate avoided emissions, based on renewable energy generation data and location-specific grid mixes.
- GIP recognizes the importance of understanding our own carbon footprint as well. We have measured our Scope 1, 2 and 3 (business travel) emissions internally since 2019 across all offices. For 2021 and 2022, we estimate that our Scope 1 & 2 emissions were 330-350 tonnes CO2e per year. Our measurement methodology is based primarily on actual data. A conservative approach has been taken for the application of conversion factors and data estimation (where required due to a lack of reported data). Therefore, a range has been provided.
- As of 30 September 2023. Green finance is debt issued in green format that has been independently verified by a third-party advisor or bank. Excludes direct financing of renewables, which would include all assets in Renewables sector.
- Reflects capital invested and/or committed to investments in the renewable energy sector across the GIP platform, including co-investments, as of 30 June 2023.
- Based on the US National Institute of Standards and Technology Cybersecurity Framework.
- As of 31 March 2023. Represents GIP’s Flagship Funds (GIP II, III and IV) only. Recent GIP V investments are excluded. When considering other funds and strategies (i.e. GIPA I and II, GIP EM, SMA’s, Continuation Funds and GIP Core (including Vantage Towers)) as well, 54% of companies’ Boards have 30% diversity or more. Gender diversity is defined as Boards that include at least one woman. Ethnic diversity is defined as Boards that include at least one ethnic minority group, based on the geography of the portfolio company.
GIP is committed to meaningfully helping the communities in which we live and work. We engage with several impactful initiatives supporting our communities through strategic partnerships, charitable giving, team involvement, and support. GIP’s charitable program is focused on social mobility and diversity, through our flagship charity Engineering Tomorrow and various other charitable partners.
Below are two examples of GIP’s program:
Engineering Tomorrow is a public charity founded by Bill Wooburn, a founding partner of Global Infrastructure Partners (GIP), one of the world’s leading infrastructure investors, and a former GE executive. Engineering Tomorrow inspires high school students to pursue an engineering degree in order to create a larger, more diverse and intellectually curious engineering workforce to solve the engineering challenges of the future.
Engineers develop labs that address relevant and pressing global problems that require an engineer’s expertise to solve, such as renewable energy, water reuse, and disease prevention. Since 2014, the program has served more than 300,000 students, and moreover, data suggests that 24% of students who engage in these labs go on to enroll as engineering majors in college.
Sponsors for Educational Opportunity (SEO) supports talented individuals from underrepresented groups in pursuing careers across leading industries. GIP has been involved in SEO’s US Alternative Investments Program (AIP) for several years, before becoming a founding partner of the AIP in the UK. Launched in 2021, the AIP aims to raise increase diversity in the industry. The AIP will provide training, mentoring, job opportunities and ongoing career support. AIP’s flagship Fellowship program will build on the success of the US program, which successfully placed over 90% of its participants into permanent positions within private equity and alternative asset managers.
- While GIP seeks to integrate certain ESG factors into its overall investment management processes, there is no guarantee that GIP will be able to successfully apply such standards or strategies or will otherwise be able to successfully implement its ESG policy or make investments in companies that create a positive ESG impact while achieving its investment strategy. In addition, applying ESG factors to investment decisions is qualitative and subjective by nature, and there is no guarantee that the criteria utilized by GIP, or any judgment exercised by GIP, will reflect the beliefs or values of any particular investor. GIP’s interpretations and decisions are expected to differ from others’ views and have evolved and will continue to evolve over time. In addition, there are variations taken in the firm’s ESG approach depending on the nature of the investment (e.g., sector, geography, ownership structure and control or non-control interest). For the avoidance of doubt, GIP does not expect to subordinate investment returns or increase investment risks as a result of (or in connection with) the consideration of any ESG factors. Please also see SFDR Disclosures.