Promoting Sustainability Through Integration and Engagement.
Assessing sustainability factors is an integral part of our investment process. To construct our investment universe or opportunity set, we firstly screen the global universe of listed equity securities for infrastructure companies. The process aims to focus our research on companies where infrastructure is the primary driver of fundamental valuation, and the predictability and stability of cash flows meet investors expectation of core infrastructure. As a result, this screening process excludes companies for:
Our sustainability research may directly affect our valuation of companies to the extent that it affects our assessment of cash flows. For example, companies may need to invest in mitigating the impact of climate change, and such investments need to be reflected in financial forecasts.
Accordingly, we will adjust our expected returns to reflect sustainability risks or opportunities as part of the portfolio construction process.
Prior to the stock selection process, our universe selection process seeks to exclude companies where the assets are not predominantly infrastructure. We also seek to exclude companies and regions that are subject to sanctions or concerns over modern slavery.
Our infrastructure investment team incorporates sustainability analysis into the investment process and portfolio construction via three main pillars:
While considering potential investments and stock selection, the Investment Committees refer to the valuation of various companies, as well as the sustainability risks and opportunities identified by the investment team alongside sustainability alerts and controversy data.