Sustainable and responsible investment in action
Capital for the long run – infrastructure
IMAS provides patient money for the long term. Infrastructure investments are a natural fit with this objective, given their long horizons and the essential services they provide for communities or regions (e.g. railways). Long-term partnerships with both the private and public sectors can address the significant investment need in infrastructure, generate a stable return for investors and promote a more sustainable future for people and planet.
Infranode, an infrastructure manager with a strong local presence in the Nordics, is a good example of a manager with a genuine long-term view. Infranode invests in essential infrastructure in the Nordic region within energy, transport, digital infrastructure and social infrastructure through closed-end funds with a horizon of 25 years. Since 2014, it has invested in projects including district heating assets in Norway and Finland, large solar parks in Denmark, container ports in Sweden and Norway, solar and geothermal energy solutions for real estate in Sweden, and schools and preschools in Norway.
Accelerating the transition
Within infrastructure, we also invest in greenfield opportunities—projects that still need to be built—as well as operational assets. Our mandate goes beyond developed countries. Selectively, we look at funds with a focus on emerging markets if they offer the right risk reward.
Asper, a London-based infrastructure manager, offers an interesting approach. It launched a managed co-investment partnership that invests in the development, construction and operation of sustainable district heating networks in the Netherlands. This is an attractive opportunity given the current low penetration of district heating networks in the Dutch market and the need for alternatives to gas as the main heat source for residential buildings. Asper partnered with an experienced developer in the Netherlands and secured a pipeline requiring over €500 million of capital in 12 projects across the country.
Climate Investor One is a blended finance facility investing in renewable energy infrastructure projects in emerging markets. It focuses on onshore and near-shore wind, solar PV and run-of-river hydroelectricity. Climate Investor One offers financing for the entire lifecycle of a project, from design to construction and into operations, through to post-construction refinancing. The strategy is unique as it allows public funding to de-risk the development phase of renewable projects, which typically cannot be financed by private sector investors. Public sector donors also play a key role in mobilising private sector capital during the construction stage of projects where risks are better understood and attractive financial returns can be achieved.
Our approach to decarbonisation
We implement decarbonisation strategies across our portfolio in several different ways:
- Investing in funds which reduce or fully exclude stocks with a high carbon footprint.
- Investing in funds with a focus on sustainable solutions.
- Investing in traditional sectors with the aim of influencing deep systems transformation.
Osmosis Resource Efficient Core Equity Fund focuses on companies that are efficient in their use of resources (water, waste and energy), while excluding the heaviest polluters. It is one of multiple investment funds in our listed equity portfolio that reduce or exclude carbon-intensive stocks.
Ninety One Global Environment is an example of a fund that focuses on sustainable solutions. It invests in companies that operate in segments that contribute or generate positive environmental impact, such as renewable energy and electric transportation.
Focusing on decarbonisation doesn’t mean that we completely avoid sectors with a high carbon footprint. On the contrary, IMAS believes that investors need to pay attention to traditional sectors such as cars, construction and materials (e.g. cement and steel). Only through a deep transformation across all sectors and by scaling capital towards the most impactful climate solutions, can overall climate objectives be achieved.
Just Climate is an example of this high-impact investment approach. Its mission is to work in partnership to limit global temperature rise to 1.5⁰C by directing and scaling capital towards the most impactful climate solutions. It focuses especially on sectors that are often too capital-intensive or ignored for other reasons by institutional investors. For Just Climate, climate-led investing is an approach that aims to catalyse timely positive climate impact at scale, while delivering appropriate risk-adjusted returns.
Selectively, we also consider direct investments, especially when we are convinced of the value of the investment theme, and it is a good fit with our overall objectives.
Northvolt, founded in 2016 in Sweden, is among our direct investments. Northvolt has a mission to manufacture batteries with the lowest possible carbon footprint. To achieve this, it uses cheap local green energy, optimises the entire production process and improves recycling capabilities. Northvolt has a strong investor base (including Volkswagen, BMW, Goldman Sachs, Folksam, AMF and the AP-funds) funding the construction of the first Gigafactory in Sweden. It has made great progress, producing its first battery in December 2021. Recently, Northvolt announced its ambition to build another plant in Sweden and one in Germany to become a European leader in its field.