Sustainability is a cornerstone of our investment approach. From our investment selection and strategy to our engagement as managers, we integrate sustainability factors into everything we do. With each investment, we aim to contribute to a more prosperous, stable and secure society.
This report details our progress towards a more sustainable, resilient future. It outlines our activities and achievements of the last year from a sustainability perspective.
Our Sustainability Report for 2023 was prepared with reference to the Global Reporting Initiative Standards, often known as GRI.
At Energy Infrastructure Partners AG (“EIP”), we consider it necessary to assess and manage sustainability factors across each transaction investment cycle. As per Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”), sustainability factors are defined as environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. Whilst the SFDR at the entity level does not directly apply to EIP AG, we consider that the SFDR provides a relevant framework to provide appropriate sustainability-related disclosures, particularly considering our function as a delegated portfolio manager for EU-domiciled funds.
As part of our commitment towards sustainability and a robust ESG management across the funds for which we have assumed the portfolio management function, the following disclosures are made.
The EIP Sustainability Risk Policy sets out how we integrate sustainability factors into our investment decision-making process. To this end, we have a fully dedicated and experienced in-house ESG function that works closely with other teams. It is our goal to ensure robust management of ESG and sustainability factors and risks at due diligence and asset management phases.
The applicability and materiality of sustainability factors vary across investment opportunities and assets. Sustainability factors can present both risks and opportunities that first need to be identified, then assessed and monitored, managed and/or capitalized upon. Therefore, we ensure that the due diligence and asset management phases are appropriately scoped, prioritized and conducted effectively in relation to these sustainability factors. As appropriate, we also use our leverage (which will vary across the portfolio) to take steps to enhance ESG performance of the target company in accordance with international industry best practices.
For more information on how sustainability risks are integrated into our investment decision-making process, please find a summary of our Sustainability Risk Policy
At EIP, we consider adverse sustainability impacts across our managed portfolios and throughout the investment lifecycle – from the early due diligence stage to asset management and exit stages.
Our Remuneration Policy does not reward any excessive risk taking – including sustainability risks. It seeks to encourage the alignment of the risks taken by us (and the decisions of employees and senior management) with those of the assets we manage and the interests of the underlying investors.
For sustainability-related disclosures relating to Energy Infrastructure Partners Luxembourg S.à r.l, the alternative investment fund manager domiciled in Luxembourg, please follow this link.
We recognize the significance of sustainability risks for investors, local communities, the environment, and biodiversity. Thus, we aim to identify and mitigate these risks accordingly. Moreover, we are convinced that long-term investors benefit when portfolio companies actively manage sustainability factors. At EIP, we therefore fully integrate sustainability factors throughout the investment lifecycle (see infographic).
Energy Infrastructure Partners Luxembourg S.à r.l. Sustainability disclosures
Energy Infrastructure Partners Luxembourg S.à r.l. (“EIP Luxembourg”) is authorized to act as an alternative investment fund manager (“AIFM”) within the meaning of Chapter II of the Luxembourg Law of 12 July 2013 on alternative investment fund managers.
Transparency is important to us
In accordance with Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”), EIP Luxembourg qualifies as a financial market participant in accordance with the SFDR and is therefore required to provide transparency with respect to the following at entity level:
Further transparency requirements apply to the managed investment funds and are included below.
Regardless of the transparency requirements, sustainability considerations are key to EIP Luxembourg and, hence, integrated in its operations. It is EIP Luxembourg’s conviction that investors, as long-term stakeholders, benefit when investments operate their businesses responsibly. Sustainability risks or adverse sustainability impacts can not only harm the investment and its stakeholders, but also expose investments to material risks that can materialize in different ways affecting the activities and the value of the investment.
On the other hand, robust sustainability and ESG practices can be important value drivers.
As per SFDR, sustainability risks are defined as environmental, social and governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.
EIP Luxembourg established a Sustainability Risk Policy to integrate sustainability factors and risks into its investment decision-making process. This policy also defines the management and monitoring principles of such risks to establish the necessary risk control.
EIP Luxembourg has delegated the portfolio management function to Energy Infrastructure Partners AG which has robust in-house ESG and sustainability expertise. The delegated portfolio manager shall be responsible for the investment decision-making process and the consideration of sustainability risks. Sustainability risks deemed relevant shall be integrated within the due diligence and investment decision-making process and, subsequently, during the asset management phase in accordance with EIP Luxembourg’s Sustainability Risk Policy, which, inter alia, refers to SFDR requirements.
EIP Luxembourg will monitor the integration of sustainability risks in the investment decision-making process as part of the due diligence and ongoing monitoring of the delegated portfolio manager and managed funds.
This statement describes Energy Infrastructure Partners Luxembourg S.à r.l. decision with respect to the requirements of article 4 (1) SFDR regarding the consideration of principal adverse impacts (hereinafter “PAIs”) of investment decisions on sustainability factors.
EIP Luxembourg ensures that it adopts remuneration policies and procedures which are consistent with the integration of sustainability risks, to the extent sustainability risks are integrated into the investment decision-making process.
EIP Luxembourg remuneration structures do not encourage excessive risk-taking with respect to sustainability risks and remuneration is limited to risk adjusted performance.
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SFDR article 8 funds managed by EIP Luxembourg promote environmental characteristics as they intend to positively contribute to energy transition, mitigate climate change and/or related environmental challenges. These funds invest in technologies and assets that support the transition to a more decarbonized future and contribute to energy security of supply.
For investors, please find here the full sustainability-related disclosures required for Article 8 financial products:
Download past reports detailing Energy Infrastructure Partners’ progress towards a more sustainable, resilient future.
“We believe it is critical to integrate sustainability factors into our operations and invest in companies and projects that are aligned with this view”
Pelayo Menéndez Calvo
Head of ESG
We contribute to the energy transition and a decarbonized future by managing funds that invest in energy infrastructure. We use the UN Sustainable Development Goals (SDGs) as framework to map our contribution and are continuously enhancing how we measure the positive impacts of our managed assets.
Through our work as an asset manager, we strive to leave a positive impact on the world. We take into account evolving sustainability regulation, expectations from investors and other stakeholders, as well as emerging sustainability-related topics in the energy industry.
To this end, EIP is a signatory or member of voluntary standards and associations in the field of sustainable finance.