We are pleased to report HIF I* ranked 2nd out of 20 participating European Diversified Funds in the 2019 GRESB Infrastructure Assessment.
As in previous years, the Fund and the majority of our portfolio companies (89.4% of the Fund’s direct investment portfolio, on a NAV** basis), participated in the 2019 GRESB Infrastructure Assessment, a global ESG engagement and benchmarking exercise that measures effective management of ESG risks and opportunities. Originally developed for the real estate industry, and launched for the infrastructure sector in 2016, the assessment has gained broad industry support over the past two years as an opportunity to benchmark ESG-related performance. 393 infrastructure businesses (280 in 2018) across 33 sectors in 57 countries and 107 funds (75 in 2018) participated in 2019.
The assessment, undertaken at both portfolio company and fund level, measures and ranks participating entities ESG impact across two principal areas, Management & Policy and Implementation & Measurement. Funds are scored, and hence ranked, on the basis of the weighted average of participating portfolio companies’ scores and the investment vehicle’s score.
In 2019, its third year of participation, HIF I’s overall score remained in line with previous years, underpinned by improved performance at Fund level, partially offset by a slight reduction in portfolio company performance, that reflected the increased number of participants this year, together with the benchmark level of ESG standards companies are being assessed against also increased. 2019 marked the first GRESB submission for Cadent Gas. Our most recent acquisition, Scandlines, will participate in GRESB in 2020. HIF I has achieved year-on-year improvements in its GRESB ranking, underpinned by Hermes Infrastructure’s promotion of continuous improvement in ESG outcomes across HIF I’s investment portfolio.
While recognising there are always areas for further improvement, Hermes Infrastructure is delighted with the progress of HIF I and its portfolio companies in the 2019 GRESB Infrastructure Assessment.
Reporting of ESG related performance metrics of portfolio companies continues to evolve for the industry and challenges remain around being able to quantify the impact of certain ESG related activities. The sector diversification implicit in the Fund’s portfolio also poses challenges to the standardisation of reporting. On this basis, we remain supportive of the GRESB initiative. During 2018, Hermes Infrastructure was invited to participate in the GRESB EMEA Infrastructure Benchmark Committee, whose remit is to provide commercial and technical input to GRESB regarding the content of the assessments, other infrastructure products and services and on GRESB’s relationship with the regional and global infrastructure sector.
* HIF I is now closed
**NAV as at 30 June 2019
The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. Past performance is not a reliable indicator of future results.