Digital 9 Infrastructure | ESG

An important aspect of Triple Point’s approach to ESG and sustainable business is the adoption of the Principles for Responsible Investment (‘PRI’), which we signed up to in 2019. The PRI principles are designed to guide and demonstrate best practice ESG integration, and to promote alignment between the objectives of investors and wider society. The principles, which are voluntary, are intended to be actionable and measurable.

In support of our commitment to ESG and sustainable business, Triple Point has designed and implemented ESG integration policies across our investment strategies. The purpose of each policy is to identify, monitor and manage ESG issues to minimise the risk of Triple Point investing in ways that could undermine ESG principles. Such investing risks harm to wider stakeholders, undermining, and potentially reducing, the financial objectives of our investments.

Should you wish to see a copy of a Fund’s ESG policy please contact: [email protected]

Triple Point Digital 9 Infrastructure PLC (D9) is a digital infrastructure fund which invests in four sub sectors (sub-sea fibre, terrestrial fibre, data centres, wireless) to provide investors with a broad exposure to this critical infrastructure asset. Digital Infrastructure is critical to global connectivity as key aspects of people’s lives – work, education, healthcare, shopping, leisure and socialising – become more reliant on the transfer and storage of data. While it is becoming a basic need for citizens to fully participate in society, Digital Infrastructure is resource and energy intensive, at a time when energy use is facing demand to be minimised.

Integration of ESG is key to ensuring we align to the social benefits of Digital Infrastructure while mitigating for its risks, in particular environmental footprint. In doing so, The Fund also has the opportunity to align to the UN Sustainable Development Goals, Goal 9: Industry Innovation and Infrastructure: Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation. Throughout the investment process we look to maximise this alignment.

The Digital 9 Infrastructure Fund will be one of the first to provide investors in the UK public markets with the opportunity to participate in this key growth sector. We favour those investments which offer investors the reassurance that Triple Point’s Digital 9 Infrastructure Fund provides access to the highest quality opportunities in this growing and essential market, both financially and from an ESG perspective.

D9 has a two-step approach to ESG combining broad and deep ESG integration with a purpose-driven overlay

In our initial due diligence, we look for businesses which have an identifiable alignment to one of our purpose driven themes in every investment made. In doing so we help ensure the broader potential social benefits of Digital Infrastructure are delivered while managing for the known environmental risk. These themes are:

1. Significantly increase access to information and communication technology through our platforms: investing in those assets who can demonstrate the ability to improve digital access, for all sections of society
2. Decarbonisation of Digital Infrastructure use: target assets with the most advanced energy efficiency practices, or where strong improvement can be achieved

We then use ESG integration to bring value both to the investment decision-making process and to the investments which the Company makes. By applying a broad and deep analysis this helps the Company to build a clear picture of the sustainability credentials of a potential investment in addition to driving improvement through ongoing engagement.

Digital Infrastructure is critical to global connectivity as key aspects of people’s lives – work, education, healthcare, shopping, leisure and socialising – become more reliant on the transfer and storage of data. As Nations grapple with the Covid19 global pandemic, reliance on Digital Infrastructure has never been higher or more crucial. Demand for capacity is expected to increase exponentially (for instance, the volume of data in the world has increased by 3,300 per cent. in a decade) as earlier technologies begin to reach capacity or become redundant (for example, 11 of the 14 existing transatlantic cables are expected to retire in the next five years) (World Economic Forum, 2019). Entwined in this need for greater capacity is also the need for greater digital access. Many vulnerable sections of society still don’t have internet access. Recognition of the importance of this social utility is growing. The UN has declared that ensuring universal access to the Internet should be a priority for all States (UN General Assembly, 2011).

Perversely, Digital Infrastructure both solves a problem and contributes to one. While it is becoming a basic need for citizens to fully participate in society, Digital Infrastructure is resource and energy intensive, at a time when energy use is under severe scrutiny, and Green House Gas Emissions must be reduced (for example the UK Government have committed to reducing Green House Gas Emissions to net zero by 2050).

Integration of ESG is key to ensuring we align to the social benefits of Digital Infrastructure while mitigating for its risks, in particular environmental footprint. In doing so, The Fund also has the opportunity to align to the UN Sustainable Development Goals, Goal 9: Industry Innovation and Infrastructure: Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.

Stewardship is an important part of our role as Responsible Investors.

An important part of the D9 ESG strategy is to use our influence to work with investee companies to drive improvements in their ESG practice and outcomes. While we would not invest if there were any critical weaknesses identified, we also recognise that many companies who have good practice can still do more across the full breadth of ESG topics to become leading practitioners. We consider our commitment to ESG engagement a key benefit to this strategy, and important in our role as PRI signatories. Our approach is not to overlook, or argue away weaknesses, but understand them and help identify a pathway for improvement through target setting and tracking. We focus improvement on the ESG topics outlined above, with additional attention on the two topics of our purpose-driven overlay: access to information and communications technology, and decarbonisation of Digital Infrastructure energy use.

We have conducted a careful review of our investment processes to enable the implementation of practical, proportionate and material ESG integration. There are two key elements to our approach:

1. Management (Culture, Capacity & Governance) – this refers to the allocation of appropriate resourcing, training and senior support to ESG integration. It demonstrates Triple Point’s actions have integrity aligned with the strategic position of the company and oversight from senior management. Examples of which include:
   1. Training across our investment team on ESG
   2. Training of our Investment Committee on ESG
   3. Explicitly reference to the importance of ESG in our conversations with prospective investee companies
2. Investment (Process & Reporting) – this refers to action taken in the investment process to assess and improve ESG factors affecting the target asset, how these might affect an investment decision and how we capture decisions and changes to ESG factors during our asset ownership. Examples of which include: 
   1. ESG due diligence and scorecard with results included in IC papers
   2. ESG contributes to our on-going engagement with the company, via the 100 day plan or longer-term action plans.

Publishing ESG KPIs and qualitative analysis