Meridiam - ESG Approach by Julia Prescot at GIB Summit

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Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014.
Read more about the world leading platform for Sustainable Infrastructure Finance at www.gib-foundation.org.
Next Summit: 27 & 28 May 2015 in Switzerland

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Meridiam - ESG Approach by Julia Prescot at GIB Summit

  1. 1. “Together with our investors and partners, our mission is to deliver sustainable infrastructure that improves the quality of people’s lives” Global Infrastructure Basel May 22 2014
  2. 2. 2 Meridiam in Brief Meridiam is a global developer, investor and asset manager specializing in public and community infrastructure delivered through public-private-partnerships Investing through its 25-year funds, Meridiam takes a long-term view on infrastructure investment 32 PROJECTS AROUND THE WORLD INCLUDING 8 IN NORTH AMERICA 110 EMPLOYEES INCLUDING 50 WORKING IN PROJECT COMPANIES 15 DIFFERENT NATIONALITIES $3.8bn OF ASSETS UNDER MANAGEMENT FOR PROJECTS WORTH $33 BILLION INVESTMENT
  3. 3. 3 • Focused exclusively on equity financing for infrastructure projects • Aligns the interest of our investors with those of our public authority partners • Our investors are primarily public development banks and institutional investors (e.g. pension funds and insurance companies) Meridiam creates an alignment of interest between stakeholders
  4. 4. 4 Investment strategy Meridiam targets investments in public infrastructure which deliver an added value to the community (typically in the form of public-private partnerships) Investment targets Equity shareholdings of 20% to 100% - mainly primary (greenfield) projects, including construction Transportation Social / Public Buildings Environment
  5. 5. 5 RAILWAYROADSOCIAL ENVIRONMENTAL CLOSED PROJECT PREFERRED BIDDER PROJECTK E Y NEAH PRESIDIO PARKWAY LONG BEACH COURTHOUSE NTE SEGMENTS 3A-3B LBJ PORT OF MIAMI TUNNEL CRCHUM NORTH TARRANT EXPRESS (NTE) A334 MOTORWAY A66 MOTORWAY LIMERICK TUNNEL SCOTTISH ROADS NOTTINGHAM TRAM UOH STUDENTS ACCOMMODATION LIFT IOW ROAD MAINTENANCE SEA HSL VÉLODROME CNM HSL L2 MARSEILLE NAVIGATION DAMS E18 MOTORWAY A2 PHASE 1 A5 MOTORWAY A2 PHASE 2 R1 MOTORWAY VIENNA RING ROAD ADANA HOSPITAL CHATEAUROUX GENDARMERIE RENNES HOSPITAL ANNEMASSE HOSPITAL Investment Portfolio - 32 projects across three funds WATERLOO LRT
  6. 6. Meridiam is committed to ESG best practice and has included ESG as part of its regular reporting to investors Meridiam Commitment to ESG • ESG is at the core of our investment and asset management processes • Meridiam Sustainable Development Charter embraces: o Principles of the 1948 Universal Declaration of Human Rights. o Principles of the International Labor Organization. o Principles of the United Nations Global Compact. o Equator Principles o UNPRI • Meridiam is also committed to building long- term projects which benefit and gain support from local communities • ISO 9001: 2008 certification achieved for responsible investment process to offer a unique investment process and principles consistent with the sustainability requirements of investors ESG reporting policy • An overview of ESG aspects for each project in the portfolio is included as part of the quarterly reporting • In addition, Meridiam produces an annual ESG report which includes: • A presentation of Meridiam’s approach and policies in this respect • A detailed analysis of each project in the portfolio • Going forward, Meridiam is working on including further quantitative indicators 6
  7. 7. 7 Evaluating ESG Risks Summary of the integration of ESG criteria in the Investment process
  8. 8. 8 Integrating ESG into the investment process ESG Preliminary Risk Assessment • The projects are classified in three possible categories following their ESG preliminary risk assessment o Low activity risk Little or limited social / environmental impact requiring no detailed due diligence or environmental and social action plan o Medium activity risk Environmental and social impacts can be readily predicted, prevented and/or mitigated o High activity risk Potentially high social or environmental impact requiring detailed due diligence • Examples o Low risk: University of Hertfordshire o Medium risk: Ijmuiden lock o High risk: SEA
  9. 9. 9 Addressing ESG issues at board level • At each meeting of the board convened for the review of a potential investment in a project, the investment team presents an Investment Committee Note to the members that covers ESG and provides an assessment of the ESG risk (ESIRE) o Meridiam recently made an investment into the VNF (Voies Navigable) Dams project – the ESG impact of this project was discussed at length at a recent board – not as much in relation to the pricing but the acceptability as a project investment • At each meeting of the board convened for the quarterly asset management review, ESG high risk projects are subject to specific additional reporting focussing on ESG monitoring. The Tours- Bordeaux high speed railway known as South Europe Atlantic HSL project has been thus subject to this specific reporting to the board of Meridiam on a quarterly basis since 1 January 2013. o An example of a recent initiative on this project is 1360 hectares being planted with trees compensate for the ones cut down, and special heat exchangers helping to reduce global energy consumption and carbon emissions
  10. 10. Planning of the road as a “green motorway” • 5 green bridges for wildlife • ecological construction: use and recycling of local wood and use of local stone • construction of a park and ride parking at the intersection with a rail station at the main junction from Kotka • minimization of the noise caused by traffic, by building 35km of noise barriers • reduction of electrical consumption by means of ‘smart’ control, solar energy production and LED lighting. Utilization of geothermal energy in the heating of roadside service buildings Example of applications in the E18 project in Finland Actions undertaken Example of applications 10

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