Sustainability-Related Disclosures

Alinda Infrastructure Fund IV SFDR Disclosures

Summary

Alinda Infrastructure Fund IV (Euro), SCSp, is a special limited partnership (société en commandite spéciale) established under the laws of the Grand Duchy of Luxembourg (the “Partnership”, together with Alinda Infrastructure Fund IV, L.P., a Delaware limited partnership (the “Main Fund”), and, together with its parallel funds and alternative investment vehicles, as applicable, the “Fund” or “Fund IV”). The Partnership qualifies as an externally managed alternative investment fund (“AIF”) and therefore falls under the scope of Regulation EU 2019/2088 of 27 November 2019 (“Sustainable Finance Disclosure Regulation” or “SFDR”). Sanne LIS S.A. (the “AIFM”) has been appointed as the external alternative investment fund manager of the Partnership.

In accordance with the SFDR, the Partnership is required to make certain website disclosures regarding its promotion of certain environmental and social characteristics, in compliance with Article 10 of the SFDR. For completeness, the approach taken to the E/S Characteristics (defined in section 3 below) is consistent with that of the Main Fund. The AIFM commits to understanding the ESG-related investment principles applied by Astatine and undertakes to verify that these principles will be complied with in respect of the Partnership.

The Partnership promotes E/S Characteristics (defined in section 3 below), but does not have sustainable investments as its objective. A reference benchmark has not been designated for the purpose of attaining the E/S Characteristics promoted by the Partnership.

The Partnership promotes the E/S Characteristics by applying rigorous ESG-related sourcing and due diligence to prospective Portfolio Investments and through its asset management of such investments. Through the Partnership’s investments in certain infrastructure assets, Astatine intends to invest across the following target sectors: (1) transportation and logistics, (2) utility-related infrastructure, and (3) digital infrastructure.

Astatine and its investment committees consider ESG topics throughout the investment process, beginning with transaction screening and due diligence and continuing through the life of the investment. The Partnership has adopted Astatine’s Environmental, Health & Safety Policy, and the Social Responsibility and Corporate Governance Policy (together, the “ESG Policies”). These form the core of The Partnership’s ESG efforts, and guide Astatine’s investment professionals, consultants and board in the evaluation and management of ESG matters. The Partnership will seek to meet its E/S Characteristics through its binding commitment to evaluate and assess certain ESG-related attributes of investments prior to and following their acquisition. Astatine uses the Sustainability Indicators (defined in section 6 below) to measure the attainment of the E/S Characteristics.

Astatine will invest a minimum proportion of 90% of the Partnership’s assets in order to attain the E/S Characteristics. Astatine is not currently in a position to disclose how and to what extent the investments underlying the Partnership are in economic activities that qualify as environmentally sustainable economic activities.

In order to promote the E/S Characteristics, Astatine relies on portfolio company information and its own internal resources to gather and calculate data in respect of each property for the purpose of monitoring against the Sustainability Indicators. A key limitation to the Fund’s approach to data sourcing is the reliance on portfolio companies to maintain reliable data management systems and ensure data quality. However, Astatine believes that none of these potential limitations will negatively affect the attainment of the environmental or social characteristics of the Fund.

No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Environmental or social characteristics of the financial project

The Partnership promotes certain environmental and social characteristics as described directly below (the “E/S Characteristics”) by applying rigorous ESG-related sourcing and due diligence to prospective Portfolio Investments and through its asset management of such investments. Through the Partnership’s investments in certain infrastructure assets, Astatine intends to invest across the following target sectors in order to deliver positive environmental and social outcomes:

  • transportation and logistics which typically includes assets that support a growing population, urbanization, and the need for replacement or enhancement of mass transportation assets. Through its investments in such assets, including marine terminals and inland ports, transportation services (including railroads and barge providers), airport infrastructure and toll roads, The Partnership seeks to support sustainable urban transport and a greener economy;
  • utility-related infrastructure investments with a focus on non-regulated businesses that provide essential services; and
  • digital infrastructure including mobile communications towers, wireless infrastructure, broadband network assets and data centre assets.

In addition, the Partnership will exclude or limit investments in undertakings involved principally in gathering, treating, processing, stabilising, fractionating, transporting, distributing, refining or storing hydrocarbons used as a fuel source (including natural gas, natural gas liquids, condensate, crude oil and refined products) (each an “Excluded Service”). This exclusion will not apply to Portfolio Investments in undertakings which derive no more than 15 per cent. of total revenues from the provision of Excluded Services provided their principal operations do not relate to Excluded Services.

The Partnership is committed to the prevention of pollution and will strive to conserve the earth’s natural resources when seeking out investments. In addition, Portfolio Investments are expected to conduct their business activities in a responsible manner, appropriately manage and protect against recognised hazards, and to safeguard the health and safety of their employees, customers, suppliers, partners and the community.

Investment strategy

Astatine and its investment committees consider ESG topics throughout the investment process, beginning with transaction screening and due diligence and continuing through the life of the investment. The Partnership has adopted Astatine’s Environmental, Health & Safety Policy, and the Social Responsibility and Corporate Governance Policy (together, the “ESG Policies”). These form the core of the Partnership’s ESG efforts, and guide Astatine’s investment professionals, consultants and board in the evaluation and management of ESG matters.

The Partnership will seek to meet its E/S Characteristics through its binding commitment to evaluate and assess certain ESG-related attributes of investments prior to and following their acquisition. Astatine prioritizes prospective Portfolio Investments with the following ESG-related attributes:

  • Strong health and safety record, with a target of zero accidents/incidents;
  • Strong environmental policies and performance, with a target of zero incidents;
  • Strong governance policies and guidelines in place for officers and employees;
  • Promoting policies and practices that reduce negative environmental impact, including climate change;
  • Observing and supporting human rights;
  • Banning all forms of forced labor;
  • Respecting the freedom of association and trade union membership;
  • Banning all forms of discrimination in the workplace;
  • Encouraging and supporting a diverse workforce and gender equality;
  • Conducting business with the highest ethical standards;
  • Compliance with all relevant legal and regulatory requirements; and
  • Actively participating in the communities in which they operate.

Where the Partnership (a) is to make a new investment, ESG matters associated with that prospective Portfolio Investment will be evaluated in accordance with Astatine’s ESG Policies and (b) holds a controlling stake (generally, more than 50% of the voting securities) in an investment, ESG matters associated with that Portfolio Investment will be monitored by Astatine’s transaction team as provided in the ESG Policies. In addition, as noted above, the Partnership will exclude or limit investments in undertakings involved principally in the Excluded Services.

Good governance practices

The Partnership assesses the good governance practices of prospective Portfolio Investments by performing due diligence on their compliance with all relevant legal and regulatory requirements, policies relating to health, safety, diversity and inclusion. Assessment of these factors is also conducted during the post-acquisition phase to ensure continued good governance.

Proportion of investments

Astatine will invest a minimum proportion of 90% of the Partnership’s assets directly in Portfolio Investments that attain the E/S Characteristics. As a result, between 0% to 10% of the Partnership’s assets will relate to investments in “#2 Other”. In respect of these “#2 Other” investments, the Partnership may enter into hedging contracts (in particular but without limitation, in respect of inflation, interest rate or currency hedging) and other derivative contracts for the purposes of efficient portfolio management.

Astatine is not currently in a position to disclose how and to what extent the investments underlying the Partnership are in economic activities that qualify as environmentally sustainable economic activities (as defined in Article 3 of the EU Taxonomy). In accordance with the European Commission’s Decision Notice of 13 May 2022 (C(2022) 3051), Astatine confirms that the Partnership’s investments are 0% Taxonomy-aligned.

Monitoring of environment or social characteristics

Astatine uses the following key performance indicators to measure the attainment of the E/S Characteristics that the Partnership promotes (together, the “Sustainability Indicators”):

  • environmental: Scope 1 and 2 emissions, water and waste management, energy management, sustainable land use, and resource depletion / renewable energy; and
  • social: impact on local community, data security, employee engagement, diversity and social inclusion, employee health and safety, and labor practices.

Methodologies for environmental or social characteristics

As set out in the section above, Astatine uses the Sustainability Indicators to measure the attainment of the E/S Characteristics. The Sustainability Indicators relevant to each Portfolio Investment will be monitored by Astatine’s transaction team as provided in the ESG Policies throughout the investment lifecycle.

Data sources and processing

In order to promote the E/S Characteristics, Astatine uses its internal resources to calculate and review each Portfolio Investment against the Sustainability Indicators.

Limitation to methodologies and data

Further information regarding any limitations to the methodologies for data sourcing and processing shall be provided from 1 January 2023.

Due diligence

When conducting due diligence on prospective Portfolio Investments, Astatine’s transaction team must pay particular attention to ESG-related matters and potential risks, including:

  • Understanding the target Investment’s international business and industry to determine potential ESG issues;
  • Ensuring due diligence includes identifying ESG related matters as part of the scope of work of engaged consultants (e.g., primarily engineering consultants and legal counsel although a separate environmental consultant may be utilized if warranted); and
  • Ensuring that ESG and related matters are addressed in the definitive agreements governing the transaction.

Engagement policies

As noted above, where the Partnership holds a controlling stake (generally, more than 50% of the voting securities) in an investment, ESG matters associated with that Portfolio Investment will be monitored by Astatine’s transaction team as provided in the ESG Policies.

Designated reference benchmark

A reference benchmark has not been designated for the purpose of attaining the E/S Characteristics.

First published: 31 December 2022
Last updated: 30 June 2023
Version: 2