Cube Infrastructure Managers (“Cube IM”) aims to ensure long-term regular yields and above market returns to investors through investing in infrastructure companies providing services sustaining or enhancing living conditions for the population.
Cube IM believes that Environment, Social and Governance (“ESG”) considerations are one of the levers, to decrease risk and create value for the infrastructure companies, in which the funds invest.
Consequently, since 2016, Cube IM has been formally implementing ESG principles in its main portfolio management processes and, more particularly, through the careful selection of the sectors in which the funds managed by Cube IM invest.
The execution of the long-term buy and grow strategy requires investments in sectors aligned with the current and future needs of the population and the environmental challenges. Cube IM has therefore positioned itself principally in the three sectors below:
Public Transport: Efficient public transports (buses, regional trains, etc.) provide all citizens affordable means to commute, which is of increasing importance (greater mobility, congestion in cities, etc.) and contribute greatly to the reduction of GHG emissions (limiting the personal use of cars, etc.), especially as the trend towards greener (electric, hydrogen) public transport grows in importance.
Energy efficiency: Renewable power plants are a significant part of this strategy, with investments having been made in PV, hydro, wind power and waste to energy. A strong focus has been given to district heating and energy efficiency, as a substantial part of energy consumption is generated through heating and cooling. Notably centralized district heating systems enable the utilization of any remaining heat and facilitate the use of renewable energy sources and/or local sources (e.g. a datacenter) and often the reduction of the heating cost for the end-customer (businesses, social housing, etc.) over the long run. Highly polluting forms of energy production (e.g. power from coal) are excluded. In addition to this, Cube IM has also identified Electric Vehicle (“EV”) charging infrastructure as an important sector going forward and has already invested in two EV charging stations companies to foster the adoption of individual electric mobility.
Communication Infrastructure: Our strategy is to focus primarily on open-access networks in underserved areas (most often semi-dense and rural areas), where the digital divide creates a new exodus of businesses and people from less dense (and more affordable) locations to already congested cities. By encouraging the use of teleworking, e-government services, videoconference, etc. such networks may allow the avoidance of GHG emissions. In addition, Cube IM has invested in the Internet of Things networks using low-energy Zero-G technologies.
Cube IM strives to integrate Sustainability Risks into its investment decision making, risk management and remuneration processes and discloses the results of the assessment of the likely impacts of Sustainability Risks on the returns of the Funds it manages.
Sector selection is only a first step. Indeed, Cube IM believes it is paramount to consider and analyze ESG issues and Sustainability Risks for each investment and, during the holding period, not only monitor risks but also implement pragmatic ESG action plans in all portfolio companies, covering ESG Governance, Business Ethics, Human Resources, Health & Safety, Supply Chain, Environment, Community Involvement and Climate-related risks.
It is worth noting that the impacts following the occurrence of a Sustainability Risk may be numerous and vary depending on the specific risk, region and asset class. In general, where a Sustainability Risk occurs in respect of an investment, there will be a negative impact on, or entire loss of, its value.
Cube IM pays its employees a combination of fixed
remuneration (salary and benefits) and variable remuneration (including bonus).
Variable remuneration for relevant employees takes into account, among others,
compliance with all of Cube IM’s policies and procedures, including the
ESMS-RI, as well as with Cube IM’s risk management framework and risk limits,
including those relating to the integration of sustainability risks.
No consideration of sustainability adverse impacts
Cube IM has implemented processes and procedures aiming at understanding how the investments performed by the funds it manages contribute to certain factors (some can be found in the Summary of Annual ESG Report). However, to date, Cube IM is not in a position to ascertain the potential adverse impact of its investment decisions on Sustainability Factors as the relevant financial information/data are still not available in satisfactory quality and quantity. Cube IM intends to monitor the evolution of the applicable ESG regulatory and technical framework and to complement and enhance its ESG processes accordingly.
Cube IM is a signatory to the UN PRI and of the Montreal Pledge and a supporter of the TCFD. Cube Infrastructure Fund II is also a member of the GRESB Infrastructure.
Additional information may be found in the link below:
Summary of Annual ESG Report
More specific and detailed information on our ESG strategy, actions undertaken by Cube IM within the industry, the extra-financial performance of our investments, progress with respect to action plans and key initiatives is available to our investors in our Annual ESG Reports.
Distinction and scores:
Cube IM was proud to be honoured in the SWEN ESG Best Practice Awards in 2018 and in 2019 in the Infrastructure category and again in 2020 in the Engagement category.
UN PRI Strategy & Governance : A+ (2017, 2018, 2019, 2020)
UN PRI Infrastructure : A+ (2017, 2018, 2019, 2020)