Environmental, Social & Corporate Governance (ESG)

Consistent with the views of its Investment Adviser, HICL believes that the ability to identify, assess and manage ESG considerations can materially impact investment and corporate performance. As a consequence, the Company has adopted a set of ESG policies which are in line with good industry practice as applicable to an infrastructure investment company. These policies apply not just at the time of investment, but throughout the investment's ownership. All of the policies are supported by clear procedures which the Company's various service providers adopt and which demonstrate compliance.

New Investments 

In relation to making new investments, the investment team will include InfraRed's developed and integrated ESG analysis in its due diligence scope. It will review the investment against HICL’s ESG Policies and seek to identify any breaches by either the target project company or by key supply chain members. If breaches are found which are not possible to remedy or mitigate, it is unlikely the investment will be made.

Current Portfolio 

With respect to the current portfolio, the Company aims to be a pro-active owner of its investments with regard to good ESG practice. An aspect of this involves monitoring the main subcontractors to ensure as a minimum they have appropriate ESG policies in place and are abiding by them; those parties are encouraged however to adhere to the highest standards of corporate conduct and implement corporate governance frameworks in line with applicable country codes. The main tools used by InfraRed - principally the Asset Management function - to achieve this goal include bespoke questionnaires and KPI metrics for monitoring and evaluating ESG credentials of the project companies, supported by an annual audit.

In addition, InfraRed has devoted resources to conduct specific ESG initiatives at certain HICL projects. These initiatives include the community engagement programmes at Croydon Schools (Oasis Academy) and Barking and Dagenham Schools (Eastbury Community School) projects, where the aim was to help deepen the students’ understanding of life in the work place and potential career opportunities. Further detail can be found in the Croydon Schools' Case Study.

ESG Reporting and Policy Review

The Company reports on its ESG Policies and related monitoring activities annually in its Annual Report and Accounts.

Compliance with the HICL's ESG Policy is reviewed annually with the Board and ESG is a standing agenda item at every Board meeting.

Principles for Responsible Investment (PRI) 

InfraRed, HICL's Investment Adviser, is a signatory of the Principles for Responsible Investment (PRI). These principles provide a voluntary framework to help institutional investors incorporate ESG issues into investment analysis, decision-making and ownership practices. In respect of the 2017 PRI Assessment, InfraRed's infrastructure score was 'A+', the highest attainable award, and compares favourably to the median score of 'B' registered across all participants.