
Sustainability report continued
2023 voluntary climate-related disclosures continued
In evaluating new and existing investments,
the Investment Manager takes account
of certain climate-related risks and
opportunities where relevant.
This may include the impact of climate
change on the markets each company serves
and demand for its services, the climate
change resilience of each company’s assets,
and, in the case of GHG emissions-intensive
industries, the feasibility and potential cost of
GHG emissions abatement. The Investment
Manager is informed about climate-related
risks and opportunities via its regular
interactions with each portfolio company
and portfolio company board updates
throughout the year.
The 3i Group Risk Committee oversees
theInvestment Manager’s risk management
framework. The 3i Group ESG Committee
advises the Group CEO, directly through the
Group Risk Committee and the Investment
Committee, on ESG-related matters.
Participation in Industry
WorkingGroups
In July 2022, the Investment Manager joined
the Initiative Climat International (‘iCI’), a
global, practitioner-led community of over
200 private markets firms and investors
representing over US$3.2 trillion in assets
under management thatseeks to improve
the understanding andmanagement of the
risks associated withclimate change.
Since joining the group, the Investment
Manager has contributed feedback towards
the guide published by iCI and the British
Private Equity & Venture Capital Association
(‘BVCA’) on the implementation of TCFD
and the working group in relation to
developing the guidance for the calculation
of the Scope 3 GHG emissions of portfolio
companies and on the development of
decarbonisation strategies.
Please refer to the 3i Group’s TCFD
disclosures for more information on
the Investment Manager’s governance
framework and further participation in
working groups.
Strategy
Climate-related risks and opportunities
identified over the short, medium, and
long term and the impact on businesses,
strategy, and financial planning
Our investment strategy is to make a
limited number of new investments each
year, selected within our target sectors and
geographies on the basis of their compatibility
with our return targets and fit with the existing
portfolio. The Company does not operate
asustainability-driven investment strategy.
However, it seeks to identify investments that
benefit from long-term trends, many of which
link to environmental sustainability themes,
including circularity and the transition
toalow-carbon economy.
As set out earlier in this report, the Company,
through its Investment Manager, screens
all investments against the requirements of
3i Group’s Responsible Investment policy,
and embeds an assessment of ESG factors,
including climate-related factors, at all stages
of the investment and value creation journey.
We can screen out opportunities that have an
unsustainable impact on the environment and
societies in which they operate, inconsistent
with generating long-term value.
Once invested, we use our influence
at portfolio companies to encourage
the monitoring of climate-related risks
and opportunities.
We are continuously evolving our approach
as a responsible investor to improve our
assessment of climate risks and opportunities
within our investment and portfolio
management processes.
During the year, portfolio companies
continued to measure their GHG emissions
and, where possible, to develop a
decarbonisation plan.
We are now working with portfolio
companies to refine these plans and
develop science-based GHG emissions
reduction targets where feasible.
Resilience of the organisation’s
strategy, taking into consideration
different climate-related scenarios,
including a2°Cor lower scenario
As a company that invests over the
medium to long term in infrastructure
assets that, by definition, provide essential
and long-term services to society, we
recognise the importance of investing
in the energy transition and that this will
ultimately impact all the sectors in which
we invest.
Early in FY23, the Investment Manager
carried out its first climate scenario
analysis on its Private Equity portfolio and
Economic infrastructure assets, including
those owned by the Company, with the
help of an external consultant.
This high level top-down analysis
suggested that the Company’s portfolio
has limited exposure to material climate-
related risks, and also highlighted that the
Company’s portfolio is exposed to the
energy transition and thus may stand to
benefit in both an orderly and a disorderly
net zero scenario.
3i Infrastructure plc Annual report and accounts 2023 53
Sustainability report