RNS Number : 6293R
BBGI Global Infrastructure S.A.
10 March 2021
10 March 2021
BBGI Global Infrastructure S.A.
Disclosures for the Sustainable Finance Disclosure Regulation
BBGI Global Infrastructure S.A. (LSE ticker: BBGI), the global
infrastructure investment company, hereby shares its disclosures
for the SFDR.
These disclosures are made for the purposes of Articles 3, 4, 5,
6, 7(2), 8 and 10 of EU Regulation 2019/2088, known as the
Sustainable Finance Disclosure Regulation or SFDR. ([i]) They are
made by BBGI Global Infrastructure S.A. (the Company), being a
société d'investissement à capital variable. The Company is an
internally-managed alternative investment fund under the EU
Alternative Investment Funds Managers Directive 2011/61/EU.
1. DISCLOSURE ON SUSTAINABILITY RISKS (ARTICLE 6(1) OF SFDR)
Article 6(1) of SFDR requires the Company to make certain
disclosures on the subject of sustainability risk. This means "an
environmental, social or governance event or condition that, if it
occurs, could cause an actual or a potential material negative
impact on the value of a relevant investment". For this purpose,
the following points are noted. The terms ESG and sustainability
are used as interchangeable in this disclosure.
1.1 Manner in which sustainability risks are integrated into investment decisions
The Company is required to describe the manner in which
sustainability risks are integrated into its investment decisions.
This may be described as follows:
(a) Through a robust internal due diligence process, we seek to
ensure that we identify and give appropriate consideration to all
relevant and material risks before making an investment
(b) This includes sustainability risk, otherwise known as ESG
(environment, social, governance) risk. In this regard, we are
conscious of the increasing importance being placed on ESG risks by
investors, regulators, governments and other stakeholders, with
climate change in particular being regarded as a fundamental issue.
We therefore ensure that we give appropriate consideration to ESG
risks in our due diligence process, considering these risks
alongside more traditional financial criteria to understand when
financially material sustainability risks might have a meaningful
impact, and if so, the extent of the potential impacts on the
investment's value and performance.
(c) It should be noted, however, that ESG risk is considered in
the round. In other words, we consider sustainability risk
alongside all other relevant factors, taking a holistic
(d) By way of a summary, the following is noted:
(i) Key relevant information is gathered as part of the due
diligence process. This information facilitates the Management
Board's understanding as to the extent of the sustainability risks
and how these risks should be considered - i.e. what are the main
risks, how they are monitored, managed and mitigated in practice,
and (overall) how sustainability risks may affect performance or
returns/value. We conduct a detailed analysis of the information
provided to form a view as to the material ESG risks that could
arise for the Company if it were to proceed with the investment
proposal, and the impact on potential returns and performance.
(ii) Where applicable, we review internal policies and
procedures of the target company to enable us take a view as to the
robustness of the internal frameworks. As part of this process we
assess the target against some key governance areas such as, but
not limited to, the soundness of management structures, employee
relations and remuneration of staff (if any), codes of conduct, tax
compliance, anti-slavery, anti-discrimination, cyber security,
health and safety, and whistle-blowing among other areas.
(iii) We may engage external third parties to conduct technical
due diligence on certain investment opportunities where
appropriate; e.g. if the investment is proposed in a company
exposed to environmental risk, we may commission a site assessment
to consider the environmental condition of any relevant land, to
consider specific environmental risks (e.g. exposure to the risk of
floods, cyclones, rising sea levels, extreme weather events, etc),
and/or to consider energy efficiency issues.
(iv) Where available, we will check available ESG ratings and
scores obtained from independent ratings agencies; e.g. BREEAM or
(v) Beyond this, we will use and consider other relevant sources
of information, including publicly available studies and other
resources that may contain an analysis of environmental issues or
risks relating to the location of the relevant asset (see examples
in 1.1(d)(iii) above).
(vi) Once all relevant information has been compiled and
assessed, an investment committee paper is prepared. This paper
includes a final recommendation supported by a summary of the
findings from the various due diligence workstreams including the
outcome of the ESG due diligence. If any third party reports have
been obtained, these are summarised. The paper includes a dedicated
section headed "Sustainability Risks", which includes a summary and
analysis of the relevant issues.
(vii) If a decision is made to proceed, a monitoring, management
and engagement strategy will be put in place to ensure relevant
risks, including sustainability risks, are monitored, managed and
mitigated to the extent possible.
(e) Sustainability risk is potentially relevant to the Company
having regard to the types of investments that may be made in
accordance with our investment policy and objectives. In
particular, the Company is exposed to the sustainability risks
referred to in the section of the Prospectus entitled "Risk
Factors", including in particular under the headers "Environmental
Liabilities", "Termination of Project Agreements", "Major Events"
and "Corrupt Gifts".
(f) The impacts following the occurrence of a sustainability
risk may be numerous and may vary depending on the nature of the
specific sustainability risk, together with the region and asset
class concerned. In general, where a sustainability risk
crystallises in respect of an investment, there could be a negative
impact on, or even entire loss of, its value, whether on a
temporary or permanent basis.
1.2 Assessment of likely impacts of sustainability risks on returns
The Company is required to describe the results of its
assessment of the likely impacts of sustainability risks on the
returns of the Company. In particular, where our sustainability
risk assessment leads to the conclusion that those risks are
relevant, it is required to disclose the extent to which those
sustainability risks might impact the performance of the Company.
For this purpose, the following points are noted:
(a) The Company's conclusion is that it cannot rule out the risk
that one or more sustainability risks may crystallise, and as a
result, have a negative impact on the value of the Company, and
therefore returns and performance. It also cannot rule out the risk
that the potential impact could be material.
(b) However, the Company has a robust approach in place to seek
to mitigate the impact of sustainability risk on its returns,
including (among other things) by integrating the consideration of
such risks into its investment decision-making process, and through
monitoring and management where relevant, in each case, as
2. Disclosure on environmental and/or social characteristics (Article 8(1) of SFDR)
Article 8(1) of SFDR requires that certain disclosures be made
where a financial product promotes environmental and/or social
characteristics. It is also necessary for the companies in which
investments are made to follow good governance practices. The
Company takes the view that it falls within the scope of Article 8
and therefore confirms as follows.
2.1 What environmental and/or social characteristics are promoted by the Company?
(a) Our investment strategy delivers the Company's purpose to
provide responsible capital required to build and maintain the
developed world's social infrastructure. The investment policy is
to invest in essential social infrastructure projects that have
been developed predominantly under the Public Private Partnerships
(PPP) or similar procurement models. By way of background:
(b) Between now and 2030, it is estimated that around GBP5
trillion of investment is required every year to support the
development and growth of the world's infrastructure needs. Central
and local governments, however, typically do not have enough
capital, technical skills or human resources to always fulfil this
growing demand for investment.
(c) The availability-based PPP model is an established
procurement method whereby responsible capital provided by private
sector investors such as the Company helps to fill the
infrastructure spending gap in order to deliver essential public
services for communities and users.
(d) We report regularly on our responsible investment activities each year:
(i) The Company publishes a detailed standalone ESG Report which
covers the environmental, social and governance aspects of BBGI.
The Company is a hands-on steward of critical social infrastructure
investments such as hospitals, schools, blue light[ii] and justice
facilities, and transport projects. The company has a global
footprint and owns assets in Australia, Canada, Germany,
Netherlands, Norway, the UK and the US. The Company is committed to
good governance, investing responsibly, and being a good long-term
custodian of critical infrastructure assets. We understand the
value of maintaining a disciplined focus and we aim to be an
industry leader in responsible infrastructure investment which is
essential to creating long-term benefits for all of our
(ii) The Company submits a Public Signatory Report to the UN
PRI. The Public Signatory Report is available on the following
(e) The Company continues to align its investment portfolio to
contribute to selected UN's Sustainable Development Goals (SDGs),
recognising the important role that investors can play in helping
to meet global sustainable development priorities.
(f) The Company is also a signatory to the UN Global Compact
which is the world's largest corporate sustainability initiative.
The UN Global Compact is a call to companies to align strategies
and operations with universal principles on human rights, labour,
environment and anti-corruption and take actions that advance
societal goals. The Company reports against the UN Global Compact
10 Ten Principles.
(g) The Company's aim is to invest responsibly. Its philosophy
on responsible investment can be summarised as follows:
(i) The Company's investment focus is in essential social
infrastructure such as schools, healthcare, blue light and justice
facilities and transport, procured using availability-based
(ii) Stewardship, strong corporate citizenship and sustainable
growth guide our business decisions.
(iii) We have implemented a robust framework to integrate ESG
into all aspects of our investment cycle, from initial screening
through to end of investment life. ESG outcomes also affect the
variable compensation paid to our identified staff.
(iv) We are active owners and incorporate ESG issues into our
ownership policies and practices.
(v) We seek appropriate disclosure on ESG issues by the entities in which we invest.
These practices are mandatory under the Company's internal
policies and procedures.
2.2 How are those characteristics met?
(a) The Company will invest predominantly in infrastructure
projects whose revenue streams are public sector or
government-backed, meaning at least 75% of the portfolio value.
(b) The Company's policies and procedures require compliance
with the practices referred to above; for example, a due diligence
process that includes a consideration of relevant environmental,
social and governance factors before a decision is made to proceed
with a particular investment.
2.3 What policies do we use to assess the good governance practices of investee companies?
We have policies and procedures in place to obtain a reasonable
degree of comfort that relevant portfolio companies have and
maintain good governance practices, as follows:
(a) We ask to see internal policies and procedures to enable us
take a view as to the robustness of the internal approach to
governance; in particular, considering governance matters such as
the soundness of management structures, employee relations and
remuneration of staff (if any), tax compliance, anti-slavery,
anti-discrimination, cyber security, health and safety,
remuneration and whistle-blowing.
(b) We consider governance issues in our due diligence process,
used before making an investment, and will not make an investment
unless we are able to form a positive view.
(c) If a decision is made to proceed, an oversight and
engagement strategy is put in place to ensure the position on
governance is monitored and maintained, including reporting and
regular meetings with the board and/or executive management team,
and regular reviews of the environmental, social and ethical
policies that the investee companies have in place and their
adherence to these policies in the delivery of their services.
(d) The Company also seeks to have, in the vast majority of
cases, at least one appointed Company board representative on each
investee company. The Company's appointed director at the investee
company's board level then reports back to the Company and to the
Company's management board at least on a monthly basis on areas
such as governance at the investee company level.
2.4 Additional product-specific information
More product-specific information can be found on the Company's
website at www.bb-gi.com.
3. New SFDR regime on principal adverse impacts or PAI (Article 7(2) of SFDR)
The Company currently takes a number of ESG factors into account
when considering a new investment and in terms of the monitoring
and oversight of existing investments, as summarised above. This
includes AML and CTF assessments.
The Company therefore welcomes the new regime being introduced
by SFDR, to require certain disclosures to be made by firms that
consider the principal adverse impacts (PAI) of investment
decisions on sustainability factors. "Sustainability factors" are
defined by SFDR as environmental, social and employee matters,
respect for human rights, anti-corruption and anti-bribery
This is in line with the Company's overall philosophy and
approach as regards responsible investing, and accordingly, the
Company is fully supportive of this initiative.
It is therefore pleased to confirm that:
(a) it is working towards updating its current policies and
procedures to reflect the detailed new regime; and
(b) the intention of the Company is to be fully compliant with
this new regime on or before 30 June 2021.
In the interim, the Company will use the option provided by SFDR
of temporarily "opting out" of this regime (i.e. it will not
consider the adverse impacts of investment decisions on
sustainability factors, as prescribed by Article 4 of SFDR).
This is being done simply to ensure that the Company has
additional time to ensure the framework it puts in place is
carefully considered, and "tailor made" for the specific types of
investments that the Company conducts.
4. Disclosure on METHODOLOGIES (Article 10(1)(B) of SFDR)
The Company is required by Article 10(1)(b) to publish on its
website "information on the methodologies used to assess, measure
and monitor its environmental or social characteristics, including
its data sources, screening criteria for the underlying assets and
the relevant sustainability indicators used to measure the
environmental or social characteristics. For this purpose, the
following is noted:
(a) Methodologies - The Company's investment strategy is to
provide responsible capital required to build and maintain the
developed world's social infrastructure. To demonstrate how we
deliver social value, we have aligned our investment strategy with
the UN's Sustainable Development Goals (SDGs). The 2030 Agenda for
Sustainable Development, adopted by all United Nations Member
States in 2015, provides a shared blueprint for peace and
prosperity for people and the planet, now and into the future. At
its heart are the 17 SDGs, which are an urgent call for action by
all countries in a global partnership to improve among other things
health and education, reduce inequality, and spur economic growth -
all while tackling climate change and working to preserve our
oceans and forests. As BBGI is an investor in essential social
infrastructure the Company will use the SDG methodology to assess,
measure and monitor its performance against selected focus SDGs
(b) Data sources - See the data sources referred to in paragraphs 1 and 2 above.
(c) Screening criteria for the underlying assets - All
investments must at least offer benefits to stakeholders and have a
significant positive impact on one or more Focus SDGs.
(d) Sustainability indicators - The Company will use the Focus
SDGs to measure whether it achieves the required "social"
characteristics. To illustrate this, the Company confirms its view
that its current portfolio of social infrastructure investments
currently offers benefits to stakeholders and has a positive impact
on the following SDGs.
(i) SDG 3: The Company has investments in 41 hospitals and
health facilities in Australia, Canada and the UK.
(ii) SDG 4: The Company has investments in 34 schools and colleges in Germany and the UK.
(iii) SDG 9: The Company's investment strategy generally helps
to deliver this target by developing quality, reliable, sustainable
and resilient infrastructure to support economic development and
human well-being, with a focus on affordable and equitable access
(iv) SDG 11: The Company has investments in 17 essential
transportation projects in Canada, the Netherlands, Norway, the UK
and the US.
(v) SDG 16: The Company has investments in four police
facilities and four justice facilities and a strong governance
structure in place in relation to non-discriminatory policies.
It should be noted, however, that regulatory expectations and
market practice in respect of Article 10(1)(b) of SFDR are not yet
clear, and are expected to evolve over the coming weeks and months.
The Company therefore reserves its right to periodically update its
position on these matters via its website.
5. Information on Remuneration Policies (Article 5 of SFDR)
In terms of Article 5 of SFDR, the Company is required to:
(a) include in its remuneration policies information on how
those policies are consistent with the integration of
sustainability risks - as noted above, this means "an
environmental, social or governance event or condition that, if it
occurs, could cause an actual or a potential material negative
impact on the value of the investment"; and
(b) publish that information on its websites.
The disclosure in this paragraph comprises such information.
5.2 Sustainability risk
The Company appreciates the desire of regulators to ensure firms
take into account all current and future risks when making
decisions pertaining to variable remuneration, including
sustainability risk where relevant.
We believe that our remuneration policies and procedures
represent a robust approach to this issue. For example:
(a) variable compensation is linked to, among other things, the following:
(i) sustainability factors aligned with Company policy and
strategy. These factors promote sound and effective risk management
on various subjects including sustainability risk, and ensure that
compensation is linked to risk-adjusted performance;
(ii) we differentiate individual compensation based on
quantitative and qualitative criteria, such as delivering on
financial and growth targets, maintaining a sound governance
structure, regulatory compliance and performance including in
respect of ESG factors, to reflect employees' contributions;
(b) the evaluation of variable compensation takes into
consideration long-term performance as well as the current and
future risks associated with that performance and the lifetime of
the assets under management;
(c) a meaningful portion of any variable compensation for
identified staff is provided in the form of equity, with deferred
vesting, to link long-term shareholder value creation to the
interests of management and enhance alignment with risk outcomes.
This also results in encouraging relevant staff to avoid an unduly
To the extent sustainability risks are or become material risk
inputs, they are therefore integrated into our approach in the same
way as other more traditional risks such as market risk, credit
risk and operational risk. This aligns with a relevant policy
objective underlying SFDR, which refers to "the remuneration
policies of [relevant firms], that promote sound and effective risk
management with respect to sustainability risks whereas the
structure of remuneration does not encourage excessive risk --
taking with respect to sustainability risks and is linked to risk
-- adjusted performance" (recital 22, SFDR).
5.3 Review and monitoring
The Company recognises that ESG is the subject of increasing
focus by investors, regulators, governments and other stakeholders,
and can have a real impact on the value of investments over the
long term. The Company therefore proposes to keep the matters set
out in this paragraph under review, bearing in mind that ESG is an
evolving landscape. This paragraph is therefore likely to be
reviewed and updated periodically over time.
6. OTHER DISCLOSURES FOR SFDR
The Company is required to publish certain other information for
the purposes of SFDR. This is covered as follows:
(a) The Company is required by Article 3(1) of SFDR to publish
on its website information about its policies on the integration of
sustainability risks in its investment decision -- making process.
This information is set out in paragraph 1.1 above.
(b) The Company is required by Article 4(1) of SFDR to publish
and maintain on its website, where it does not consider adverse
impacts of investment decisions on sustainability factors, clear
reasons for why it does not do so, including, where relevant,
information as to whether and when it intends to consider such
adverse impacts. This information is included in paragraph 3
(c) As noted above, the Company takes the view that it falls
within the scope of Article 8 of SFDR (i.e. that, in general terms,
it promotes environmental or social characteristics), and is
therefore required by Article 10 of SFDR to publish and maintain on
its website the following information (as relevant):
(i) a description of the relevant environmental or social
characteristics - this is included in paragraph 2.1 above;
(ii) information on the methodologies used to assess, measure
and monitor the relevant environmental or social characteristics,
including its data sources, screening criteria for the underlying
assets and the relevant sustainability indicators used to measure
the environmental or social characteristics - this is included in
paragraph 4 above;
(iii) the information referred to in Article 8 - this is included in paragraph 2 above;
(iv) the information referred to in Article 11 - in due course,
this will require certain information to be included in our
periodic reports for the purposes of SFDR, and will therefore be
inserted into this document or otherwise published on our website
in due course.
A copy of these disclosures is also available to view on the
Company's website at www.bb-gi.com * .
For further information, please contact:
BBGI Management Team +352 263 479-1
BBGI Global Infrastructure S.A. (BBGI) is a responsible
infrastructure investment company and a constituent of the FTSE 250
that invests in and actively manages for the long-term a globally
diversified, low-risk portfolio of essential social infrastructure
BBGI is committed to delivering stable and predictable cash
flows with progressive long-term dividend growth and attractive,
sustainable, returns for shareholders. BBGI has a proactive
approach to preserving and enhancing the value of its investments,
and to delivering well maintained social infrastructure for
communities and end users, whilst serving society by supporting
All of BBGI's investments are availability-based and supported
by secure public sector-backed contracted revenues, with
inflation-protection characteristics, that is paid so long as the
assets are available for use.
BBGI's investment portfolio is over 99% operational with all its
investments located across highly rated investment grade countries
with stable, well developed operating environments.
BBGI's in-house management team is incentivised by shareholder
returns and consistently maintains low comparative ongoing charges
Further information about BBGI is available on its website at
The Company's LEI: 529900CV0RWCOP5YHK95
Any reference to the Company or BBGI refers also to its
subsidiaries (where applicable).
* Neither the Company's website nor the content of any website
accessible from hyperlinks on its website (or any other website) is
(or is deemed to be) incorporated into, or forms (or is deemed to
form) part of this announcement.
[i] Regulation (EU) 2019/2088 of the European Parliament and of
the Council of 27 November 2019 on sustainability-related
disclosures in the financial services sector.
[ii] Blue light infrastructure represents our investments in
fire and police stations.
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(END) Dow Jones Newswires
March 10, 2021 02:00 ET (07:00 GMT)