Our approach
There is a strong link between companies that have high environmental, social and governance standards and those that are able to achieve long-term sustainable business growth
Responsibility starts when we first consider investing in a company. The Investment Manager is a signatory to the UN Principles for Responsible Investment and has embedded responsible investing policies into its investment and asset management processes. The Responsible Investment policy sets out the businesses in which the Company will not invest, as well as minimum standards in relation to sustainability matters which we expect new portfolio companies to meet, or to commit to meeting, over a reasonable time period
The Investment Manager is committed to constructing and managing the Company's portfolio in accordance with the Investment Manager's Responsible Investment policy, which covers a range of sustainability issues including climate.
For more information on the Investment Manager’s sustainability policies, please refer to the 3i Group website. The adoption of these policies by the Investment Manager meets the Company’s objectives in this area.
Our strategic sustainability focus areas
Carbon and climate
Considerations of the potential impacts of climate change and the transition to a low-carbon economy remain key focus areas for the Investment Manager and its engagement strategy.
We continue to enhance GHG emissions data, increase the adoption of science-based emissions and reduction targets across the 3i Infrastructure portfolio, and deepen our understanding of climate risks and mitigation.
In March 2024, 3i Group plc set SBTi-validated science-based emissions reduction targets, covering both direct emissions and downstream indirect emissions associated with all the portfolio companies that 3i manages.
In FY25, Ionisos and Joulz received SBTi validation of their science-based targets. In FY26, SRL and TCR also received SBTi validation of their targets. In FY27, the Sustainability team will continue working with portfolio companies to develop science-aligned targets and facilitate the submission of reduction targets to the SBTi for validation.
Strategy and leadership
Against an evolving landscape of macro trends and regulations, developing an approach to emerging themes is key.
The Investment Manager encourages all portfolio companies to assign responsibility for sustainability at both board and executive levels, ensuring appropriate allocation of resources. Linking executive remuneration to sustainability objectives remains a valuable mechanism for promoting accountability and supporting the achievement of targets.
Each asset management team includes a sustainability lead to monitor progress, address incidents where necessary and provide comprehensive support to management teams on material sustainability matters.
Portfolio companies are also encouraged to undertake materiality assessments to identify the sustainability issues most relevant to their activities. Recent amendments to the Corporate Sustainability Reporting Directive (‘CSRD’) mean that most portfolio companies do not fall directly within scope. Double materiality assessments nonetheless remain best practice.
Health & safety and people
The health and safety of 3i Infrastucture portfolio companies’ employees, and of those impacted by their activities, remains the Investment Manager’s highestpriority.
Each portfolio company board is responsible for monitoring and oversight of health and safety matters. Serious incidents are escalated to the Investment Manager.
The Investment Manager encourages portfolio companies to set clear leading and lagging indicator targets and reviews performance against these regularly, based on data tracked by management on an ongoing basis. This monitoring enables trends to be identified promptly and addressed directly with management teams if performance falls short of expectations.
In addition, annual health and safety performance data is collected through the Sustainability survey to support portfolio-wide analysis and disclosure. During the year, focused attention from several portfolio company boards has supported continuous improvement in safety culture and strengthened oversight of the higher-risk activities inherent in an infrastructure portfolio.
The Investment Manager also strengthened its approach to human rights during the year, enhancing existing policies and continuing
engagement with portfolio companies on this topic where it is most material.
Gender diversity amongst portfolio company employees, senior management teams and boards continues to be monitored, recognising the broader challenges associated with improving representation in the infrastructure sector. Looking ahead to FY27, the Investment Manager plans to undertake active engagement with Human Resources leaders across the portfolio to facilitate the sharing of insights and best practices across employee-related topics.
Dedicated Sustainability team
Our Sustainability team works in partnership with the investment and portfolio management teams to define and deliver sustainability strategies, shaped by what is material to each business.
We seek to embed strong sustainability governance at board level through regular oversight of key sustainability topics, formal approval of sustainability strategies and clear accountability for appropriate resourcing and delivery.
Our approach balances portfolio company ownership of developing and delivering sustainability initiatives with the effective leveraging of 3i’s in-house expertise. This balance varies according to each company’s positioning, sustainability maturity and strategic priorities.
Our Sustainability team continues to provide bespoke support to portfolio companies through direct work with management teams and collaborative workstreams to develop approaches to, amongst other topics, health and safety, decarbonisation, governance, climate risk, and reporting. The team also continues to support the 3i Infrastructure investment team on sustainability due diligence for all acquisitions and exits, with a structured approach aligned to relevant industry frameworks and fully embedded in the diligence process.
From landfill to low-carbon
CEO Bruce Heppenstall and 3i’s Tim Short discuss how Infinis is transforming legacy landfill sites into a fast-growing solar and battery storage platform, supporting the UK’s net zero ambitions.
