Transportation of wind turbine blade at dusk

Corporate

Progress Report 2021

05 October 2021

Green impact overview

GIG has maintained a market-leading approach to measuring and reporting the green impact of our investments since our inception. Our Green Impact Advisory team, which consists of recognised global expertise and leadership in climate science, green finance, climate policy and sustainability, is responsible for evaluating all our principal investment activities against GIG’s Green Investment Policy.

This rigorous evaluation ensures all GIG investments meet our green objective by contributing positively to at least one of GIG’s Green Purposes. We also confirm the alignment of our portfolio companies and MGREF1 and MGREF2 activities (see Funds under management for details) with our Green Objective and the Green Investment Policy.

In addition to assessing GIG’s investment activities, we continue to deliver our green impact services to clients and partners, often in partnership with our advisory colleagues across Macquarie. This year we have delivered scalable green impact data reporting for a number of investors and fund managers, and our engagements on developing green frameworks for green debt instruments and investment decision-making have evolved to account for the changing landscape of sustainability standards, such as the EU Sustainable Finance Disclosures Regulation, and EU and other taxonomies for sustainable activities.

Reporting our green impact and metrics

We maintain the same robust and consistent approach to accounting and disclosure of green impact metrics as applied in previous years, reporting performance in our green impact statements. This year’s reporting also maintains the new disclosures introduced in 2020, where we added reporting of our qualitative contributions to all five Green Purposes – through our Green Ratings – to our existing quantitative green impact statements.

As part of our commitment to maintaining a market-leading approach we commissioned Arup to undertake an independent review of our methods and identify next steps for their development. Whilst the Green Purposes have remained unchanged, following this review and working with the GPC trustees, we developed updated definitions of the five Green Purposes to provide greater clarity. These updated definitions can be found in our Green Investment Principles or Green Investment Policy, both of which can be found on the GIG website.

We’ve also reviewed our methodologies to ensure they remain robust and appropriate for investments in new technologies, such as e-mobility charging, battery storage and hydrogen, as well as readying for investment evaluations in CCUS.

Our green impact reporting is for the period 1 April 2020 to 31 March 2021.

Green ratings

Our ratings approach for the reporting period is consistent and comparable with our first disclosures of these ratings last year, although we are currently in the process of revisiting and updating our approach in light of the findings of the independent benchmarking review undertaken by Arup.

We use our green ratings against all five of our Green Purposes to inform our investment decisions – a project’s contribution is evaluated on a scale of AAA to E, as indicated below. Here we report our total ratings given to investments in the year (at FID or later, in accordance with our Green Impact Reporting Criteria). The graphic below indicates the number of projects assigned to each rating.

Reduce greenhouse gas emissions

All of the projects in which we invested in 2020/21 are forecast to result in reduced greenhouse gas emissions.
Projects achieving higher green ratings for this Green Purpose are located in countries with higher grid emissions (e.g. Poland and Australia) and are technologies with lower embedded project emissions (e.g. onshore wind).
The metric reported for this Green Purpose is lifetime greenhouse gas emissions avoided (kt CO₂e).

Advance natural resource efficiency

All of the 2020/21 projects are forecast to advance resource use efficiency.

Projects achieving higher ratings have greater displacement of natural resource consumption.
Metrics reported for this Green Purpose are:
- renewable energy generation (GWh)
- energy consumption avoided (GWh)
- materials recovered for recycling (kt)

Protect or enhance the natural environment

Most of the 2020/21 projects are anticipated to have no significant or minor adverse effects on the local natural environment, following environmental mitigation measures.
Two projects are expected to contribute positively to protection of the natural environment by diverting waste from landfill.
The metric reported for this Green Purpose is landfill avoided (kt).

Protect or enhance biodiversity

None of the 2020/21 projects are expected to contribute directly to biodiversity protection or enhancement.
With biodiversity net gain principles being adopted in countries such as the UK, we expect to report a positive contribution to this Green Purpose in the 2021/22 Green Ratings summary.
Adverse effects on biodiversity have been mitigated to the fullest extent possible, with residual effects deemed acceptable by planning and permitting authorities for each project.
The majority of projects are anticipated to result in minor or no significant adverse effects on biodiversity, following mitigation and compensatory measures, but some will have moderate adverse effects.
Where there is uncertainty over impacts – e.g. disturbance of mammals and birds during onshore wind construction and operation – we conservatively assume more severe impacts until mitigation measures are implemented.

Promotion of environmental sustainability

While the other Green Purposes encompass direct environmental sustainability improvements, this Green Purpose addresses indirect effects of projects to facilitate, stimulate or promote environmentally beneficial action.
All of our projects are expected to make a positive contribution to indirect promotion of environmental sustainability.

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