Triple Point Energy Transition | 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 Energy Efficiency Infrastructure Company plc (“TEEC” or the “Company”) is an energy efficiency infrastructure investment fund which aims to help reduce carbon emissions within the UK via investment in energy efficiency projects. These projects are crucial for the transition to a low carbon economy and to achieve the UK's net zero targets, whilst ensuring our shareholders have an attractive, long-term income source with a positive impact.

The Company intends to achieve its energy efficiency investment objective by investing in a diversified portfolio of Energy Efficiency investments in the United Kingdom. The term Energy Efficiency refers to assets or processes which reduce primary energy input for a given output, thereby reducing or eliminating energy waste. Energy Efficiency is one of the cornerstones of the global drive to addressing the climate emergency. The cleanest or greenest energy is the energy that is never used – the projects and assets which deliver such savings are the focus of the Company. The Company through its subsidiary TEEC Holdings Ltd. will invest in a range of energy efficiency assets which will contribute to or are already contributing to Energy Efficiency in sub-sectors including electricity and heat generation, distribution, and end user consumption.

Specifically, we target a portfolio of UK based energy efficiency infrastructure assets across three sectors:

1. Low Carbon Heat (Combined Heat & Power, Heat Networks)

Heat accounts for over a third of UK carbon emissions and is the most difficult challenge faced enroute to net-zero by 2050.

Heat Networks involve taking heat from a central source and delivering it to domestic or non-domestic buildings. Typically, the heat source might be a facility that provides a dedicated supply to the heat network, such as a CHP plant.  

2. Social Housing Retrofit and Industrial Energy Efficiency

Millions of vulnerable adults and children live in energy inefficient homes, which need investment to lower their carbon footprint and to improve energy efficiency. We look at retrofit measures including insulation, double glazing, solar PV and heat pumps.

Industrial emissions are responsible for around 20% of total UK carbon emissions. We will look at improving energy efficiency in steam systems, waste heat recovery and bioenergy/waste utilisation.

3. Distributed Generation

Distributed generation refers to a variety of technologies that generate electricity, such as solar panels, hydropower and biomass. Distributed generation can help support delivery of clean and reliable power and reduce electricity losses.

The need for low carbon energy efficient solutions is as much a social issue as it is an environmental one. The impacts of climate change do not affect people evenly, and the poorest in society are currently those likely to be impacted the most severely. In alignment with the UN Sustainable Development Goals (SDGs), in particular SDG7 (Affordable Clean Energy), SDG8 (Decent work and economic growth), and SDG9 (Industry, Innovation, and Infrastructure), this fund looks to improve the rate of energy efficiency, contribute to employment opportunities and to the development of infrastructure which is affordable and equitable in access for all.

As Governments seek to drive down carbon emissions, outdated forms of energy production will rise in cost, and based on current structural barriers so will the cost of their replacement. Energy efficiency solutions can help ease this burden and enable a more just transition to a low carbon economy, that seeks to leave no one behind or to unfairly penalise any one demographic. For example, one of our three target sectors “Social Housing Retrofit and Industrial Energy Efficiency” has the potential to help millions of vulnerable adults and children who live in energy inefficient homes and face a rising risk of fuel poverty.

TEEC aims to help reduce carbon emissions within the UK via investment in energy efficiency projects. These projects are crucial for the transition to a low carbon economy and to achieve the UK's net zero targets, whilst ensuring our shareholders have an attractive, long-term income source with a positive impact.

In alignment with the UN Sustainable Development Goals (SDGs), in particular SDG7 (Affordable Clean Energy), SDG8 (Decent work and economic growth), and SDG9 (Industry, Innovation, and Infrastructure), this fund looks to improve the rate of energy efficiency, contribute to employment opportunities and to the development of infrastructure which is affordable and equitable in access for all.

As Governments seek to drive down carbon emissions, outdated forms of energy production will rise in cost, and based on current structural barriers so will the cost of their replacement. Energy efficiency solutions can help ease this burden and enable a more just transition to a low carbon economy, that seeks to leave no one behind or to unfairly penalise any one demographic. For example, as one of our three target sectors “Social Housing Retrofit and Industrial Energy Efficiency” has the potential to help millions of vulnerable adults and children who live in energy inefficient homes and face a rising risk of fuel poverty.

TEEC aims to mitigate the creation of GHG emissions, by reducing energy waste. It is a criterion in every investment that the proposed project will reduce the GHG emissions compared to an appropriate counterfactual, across scope 1, 2 and 3 (where measurable) emissions.

For the Fund and at a company level, Triple Point support the intention of the Task Force on Climate-related Financial Disclosures (‘TCFD’)  framework, which reflects a wider internal strategic review process to develop a robust climate risk management strategy. Most recently we appointed the Carbon Trust to estimate our downstream scope 3 emissions (or “financed emissions”), as the first step in the development of our formal Climate Risk Management strategy. Using these results, we are establishing a Roadmap of action, to include climate targets, a net zero strategy, and disclosure against the TCFD framework.

The TCFD framework recommends that organisations should seek to understand the impact of climate-related financial risks and opportunities and disclose the ‘actual and potential impacts’ of those risks and opportunities. Financial risks from climate change arise through two primary channels, or ‘risk factors’: physical and transition.

We analyse these climate related physical and transitional risks and opportunities when looking at potential future investments. The physical risks are based on physical changes the UK is predicted to experience due to climate change as reported in the Carbon Changes Committee 6th Carbon budget, and the transitional risks are legislation changes that research show are likely to occur that we think would affect the investment. Where possible the Manager looks to integrate these sensitivities into our financial models so that we can easily see the financial risks, or opportunities, that an investment may have due to the physical and transitional effects of climate change.

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

We work alongside investee companies to ensure they meet TEEC’s ESG objectives by seeking formal commitment from investee companies. This is done by incorporating ESG into deal documentation or, where limited practices are in place, we implement a 100-day improvement action plan. For longer term concerns we will collaboratively work with the investee company to establish a roadmap for improvement over a 3-5 year horizon with clear process benchmarks.

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. Providing greater transparency on our approach to ESG in all materials
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. Formal inclusion of our energy efficiency commitments within our sourcing and DD
   2. ESG due diligence and scorecard with results included in IC papers
   3. ESG contributes to our on-going engagement with the company, via the 100 day plan or longer-term action plans.