Sustainability

Sustainability Disclosure

Transparency is important to us

The European Commission considers transparency surrounding the incorporation of sustainability risks a key factor in the transition to a sustainable and low-emission economy. For this reason, Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability-related disclosure requirements in the financial services sector (SFDR) was adopted.

EIP takes these sustainability-related disclosure requirements very seriously and aims to demonstrate how sustainability risks are considered in the investment decision-making process alongside all relevant financial risks. Sustainability risks are considered to be environmental, social and governance (ESG) factors that can have a significant negative impact on the value of an investment.

Disclosure of sustainability risk policies
(Art. 3 SFDR)

EIP established a Sustainability Risk Policy to integrate sustainability risks into its investment decision-making process. The Policy also defines the management and monitoring principles of such risks to establish the necessary risk control.

This Policy is applicable to all bodies, employees and subsidiaries of EIP. It covers the overall investment process and is relevant for all the investment decisions recommended by EIP to its managed funds.

To highlight how ESG factors can impact EIP’s investments, EIP uses the framework developed by the Task Force on Climate-related Financial Disclosures (TCFD), where risks are grouped in two categories: “Transition” and “Physical.” These two categories are then further substantiated and examined in the context of the investment decision.

Which ESG factors have a concrete influence on companies and investments depends on the specific business model as well as the industry. EIP is active exclusively in the area of energy infrastructure assets. Against this background, EIP has identified the following overarching ESG criteria as relevant:

  • Environmental: Degradation & Pollution, Resource efficiency/sourcing/use/treatment, Physical impact on infrastructure assets
  • Social: Working conditions, Stakeholders, Physical impact on infrastructure assets
  • Governance: Corporate governance, Operational aspects

In assessing sustainability risks, EIP applies recognized standards (UN PRI and SSF memberships). In addition to sustainable investments in renewable energy, exclusion principles and long-term partnerships with portfolio companies also support efforts to drive the energy transition.

A dedicated risk management process ensures that sustainability risks are adequately monitored and that funds and collective assets are managed within the framework of individual investment guidelines, taking into account strict risk and performance tolerance values.

The Sustainability Risk Policy can be made available upon request. Please contact us for more information.

Disclosure of adverse sustainability impacts at entity level
(Art. 4 SFDR)

EIP mainly invests into large-scale renewables and system-critical energy infrastructure assets that facilitate the energy transition and the shift towards a decarbonized future.

Article 4 of the SFDR requires that financial market participants provide transparent information on adverse sustainability impacts at entity level. EIP aims to meet this requirement in the future and will report on potential adverse sustainability impacts of the investment process in the coming months.

Disclosure of remuneration policies in relation to the integration of sustainability risks
(Art. 5 SFDR)

EIP’s overall Remuneration Policy does not reward any excessive risk taking, including sustainability risks, and seeks to encourage the alignment of the risks taken by the Company (and the decisions of employees and managing partners) with those of the assets it manages and the interests of underlying investors.

Disclosure of the promotion of environmental or social characteristics for European energy infrastructure
(Art. 10 SFDR)

The European energy infrastructure sub-fund managed by EIP promotes environmental characteristics and supports the energy transition towards low-carbon sources. It therefore qualifies as a thematic investment and is classified as an Article 8 product according to the SFDR.

The sub-fund meets environmental characteristics by investing a substantial majority of its investments into renewable energy sources such as power generation and storage. Technologies and assets related to energy efficiency that support the transition to a low-emission future are also part of the investment strategy.

To assess environmental characteristics, EIP performs ESG due diligence when relevant. EIP also identifies the materiality of sustainability risks in accordance with the Sustainability Risk Policy.

EIP assesses and monitors quantitative and qualitative non-financial key performance indicators linked to energy infrastructure assets (e.g. carbon footprint, renewable energy produced, energy efficiency policy, health & safety policy) collected from its investee companies and their partners, and reports on these non-financial performance indicators through regulatory disclosures.

Want to learn more about EIP’s commitment to sustainable renewable energy investments? Please contact us.