Climate and Carbon Neutrality
At the core of Investindustrial’s conviction in ESG issues is the need to reduce carbon emissions, which has societal benefit and commercial value. Investindustrial, carbon neutral since 2009, aims to take a fresh approach to reducing carbon emissions by pursuing innovative and bold measures.
Climate change is one of the highest priority sustainability issues facing investors, as it poses risks and opportunities in addressing climate-related impacts on business, and in shifting to a low-carbon global economy.
Investindustrial recognises the importance of climate as a business issue, and assesses related risks and opportunities throughout the deal cycle. In the context of the Task Force on Climate-related Financial Disclosures (TCFD) framework, these risks and opportunities pertain to transition risks, physical risks, and opportunities. Material findings and mitigating actions are included in the advisory teams’ value creation plans and in the portfolio company’s 100-day plan, thus climate becomes part of Investindustrial’s on-going monitoring activities.
Objectives and Targets
Investindustrial and its active portfolio companies aim to set measurable objectives and targets focused on the management of energy consumption, in line with a global commitment to curb greenhouse gas emissions sufficiently to limit global warming to two degrees or below by 2100. In addition, Investindustrial and all active portfolio companies are working towards reducing greenhouse gas emissions by replacing:
- 50% of electricity requirements with renewable energy by 2018;
- 75% of electricity requirements with renewable energy by 2020;
- 100% of electricity requirements with renewable energy by 2025.
Measuring and monitoring performance
All portfolio companies measure, monitor and publish their carbon emissions as well as their risk exposure to climate change. Investindustrial benchmarks portfolio companies’ carbon intensity against industry and market/location-based benchmarks. In comparison to MSCI Europe ESG and low carbon leader index, the portfolio companies mostly outperform these indices.
In addition to working with portfolio companies, Investindustrial strives to minimise its own carbon emissions.
Investindustrial has been carbon neutral since 2009. The company continues to
work towards its 2027 objective of achieving carbon neutrality through a proprietary carbon capture / displacement project at an Investindustrial, Sponsor and Fund level.
Southern Europe's First Carbon neutral Investment Team
Investindustrial places significant importance on reducing its carbon footprint and has worked with a number of leading providers of carbon reduction solutions, to measure its Greenhouse Gas (GHG) emissions footprint, reduce emissions at source and offset remainder of emissions.
In recent years, the Group has supported several projects to offset the emissions and achieve carbon neutrality. The last projects supported were in Turkey (Aydin - Geothermal Energy and Ankara - Landfill Gas to Energy) and Guatemala (REDD+ Guatemala Caribbean Conservation Coast).
In addition Investindustrial has undertaken a series of actions to reduce its overall emissions per employee.
In 2016, Investindustrial created a Carbon Neutral Policy that provides guidelines to improve the carbon footprint of its portfolio companies. Investindustrial believes that by taking the first step in measuring its carbon footprint, the investee companies are now furnished with vital information that will allow them to act on crucial carbon emissions issues andreduction opportunities via carefully structured KPIs, as Investindustrial has done for itself.
Whilst Investindustrial’s primary goal is carbon reduction and ultimately carbon neutrality, this is not always immediately possible. As such Investindustrial is in the process of developing carbon reduction projects to offset GHG emissions in order to achieve carbon neutrality at an investment programme level.
Given the size and variable nature of the portfolio, Investindustrial seeks an innovative solution to carbon offsetting that is sustainable, flexible and most effective over time. After careful consideration of multiple options Investindustrial decided that, not dissimilar to its portfolio investments, it should be both owner and manager of the initiative and will work with experienced practitioners to develop a portfolio of projects to meet 100% or more of its offsetting needs in the long-term. This portfolio of projects include renewable energy and nature-based solutions. In the interim, Investindustrial will continue to invest in established and reputable global carbon reduction programmes to meet its offset requirements; however, as Investindustrial’s own project matures, there will be less and less reliance on external offsetting.