The consideration of the influence of sustainability factors on the risk, return and longevity of investments provides a more thorough due diligence process and better risk-adjusted returns. The interaction between our investment, stewardship and reporting activities is depicted below.
Source: 4D Infrastructure
We believe sustainability factors are often interlinked for companies in our investment universe. Therefore, while assessed on an individual basis, their inter-relationship also needs to be understood and assessed. For example, when assessing the pace of energy transition in decommissioning fossil fuel generation facilities, utility companies should consider social factors, such as the impact on energy affordability for customers, the impact on reliability of service and security of supply, and the employment opportunities of displaced workers.
As a signatory to UNPRI, and for the benefit of our investors, we undertake stewardship activities with companies both in our portfolios and greater investment universe. We actively incorporate responsible investment in our investment and stewardship activities, incorporate information learned through our engagement activities into our decision making, promote enhanced transparency through engagement and proxy voting, and promote implementation of responsible investment in the infrastructure sector.
Responsible investment is integrated into our investment process and is an important component of our investment stewardship. This document outlines our stewardship activities over the past year for investors and stakeholders.