Foresight Environmental Infrastructure | ESG

Foresight Environmental Infrastructure Limited (“FGEN”) does not have a formal Environmental, Social and Governance (“ESG”) Policy, however, ESG considerations are embedded throughout the FGEN investment process and asset management procedures, from initial investment screening through due diligence and into ongoing monitoring and reporting. FGEN aims to invest in a diversified portfolio of environmental infrastructure that supports more environmentally friendly approaches to economic activity whilst generating a sustainable financial return. Environmental Infrastructure is defined by the Company as infrastructure assets, projects and asset-backed businesses that utilise natural or waste resources or support more environmentally friendly approaches to economic activity, support the transition to a low carbon economy or which mitigate the effects of climate change.

FGEN’s commitment to sustainability goes much further than simply producing green energy through its environmental infrastructure investments, but also incorporates proactive management of Environmental, Social and Governance considerations. 

Overall responsibility for ESG resides with the Board of FGEN, with analysis and reporting against ESG criteria provided by the Company’s Alternative Investment Fund Manager – Foresight Group LLP.

FGEN is categorised as an Article 9 product under the EU Sustainable Finance Disclosure Regulation (“SFDR”) defined as “a fund that has sustainable investment as its objective”.

FGEN has been awarded the London Stock Exchange’s Green Economy Mark which recognises London-listed companies and funds that derive more than 50% of their revenues from products and services that are contributing to environmental objectives such as climate change mitigation and adaptation, waste and pollution reduction and the circular economy. 

FGEN also voluntarily reports against the Task Force on Climate-Related Financial Disclosures framework.

FGEN ESG Objectives

• Promote the efficient use of resources 
• Develop positive relationships with the communities in which FGEN operates
• Ensure effective, ethical governance across the portfolio 

In the year 2020/21, FGEN developed a series of KPIs to help the Company track the portfolio’s performance against each of the ESG objectives set out here and has reported annually against these KPIs since 2021/22.

The Company’s objective contributes to the climate change mitigation objective and supports the transition to a low carbon economy by investing in a diversified portfolio of environmental infrastructure, including infrastructure assets, projects and asset-backed businesses that utilise natural or waste resources or support more environmentally friendly approaches to economic activity whilst generating a sustainable financial return.

The Company’s activities will contribute materially towards the emissions reduction objectives set out under the Paris Climate Agreement. By way of example, FGEN has invested into a portfolio of diversified renewable energy assets, clean fuel distribution assets and other assets that contribute to decarbonising both the national energy mix and other emissions-intensive activities.

The following environmental criteria are typically considered during due diligence and ongoing monitoring of assets: 

• resource management;
• life on land/below water; and
• climate change and resilience.

The following social criteria are typically considered during due diligence and ongoing monitoring of assets: 

• health and wellbeing; 
• local economic impact 
• local social impact; and 
• community engagement and benefit.

Many of FGEN’s project companies have a community fund associated with them and FGEN is supportive of the contributions made by the project companies to them. Some of these are triggered by planning conditions, while others have been put in place by FGEN in order to drive good practice in community engagement. 

FGEN’s approach to ESG is based on three core principles: Assess, Monitor and Engage. Since the publication of the Company’s first ESG report, FGEN has been focused on progressing each of these principles in order to maintain a robust ESG framework. 

FGEN’s Board holds overall responsibility for decision making around ESG, including climate‑related risks and opportunities.  The Board has significant combined experience across the environmental infrastructure landscape, including risks and opportunities related to ESG and climate-change.

FGEN’s Board of Directors meets quarterly and is advised by the Chairs of both the ESG Committee and Risk Committee at each meeting.

The Investment Manager’s management team holds responsibility for overseeing sustainability and ESG across FGEN’s activities on behalf of the Board of Directors.  The management team works directly with, and is advised by, Foresight Group’s sustainability team which comprises sustainability professionals who hold responsibility for ESG and sustainability across Foresight Group.

The management team also works closely with the portfolio managers in order to understand and manage ESG and climate‑related risks and opportunities, as well as to progress the wider ESG objectives set by FGEN’s board.