Progress Report 2022

Green Purposes Company – Annual Letter 2022  


This is our fifth annual letter in which we independently comment on GIG’s performance against its green objective and five green purposes. The letter addresses GIG branded investments globally for the financial year to 31 March 2022. We confirm that no request to change the green purposes was received in that period.  This letter should not be relied upon to provide formal assurance of GIG’s activities or their green impact.  


GIG is a market leader in green investment, with evidence of leading practice in a range of assessment areas. However, in considering comparable institutions, we take the view that this position is increasingly at risk: other players have caught up and, in some assessment areas, overtaken GIG in market best practice. Without taking the actions set out in this letter we believe other market actors are likely to fully overtake GIG in setting the pace. The main areas where, in our view, GIG has lost ground to peers, include disclosure, stakeholder engagement and risk.  

GIG therefore needs to rapidly evolve across several assessment areas if it wishes to maintain a leadership position through which it can help unlock the further flow of investment into green projects and fulfil its mission to ‘accelerate the transition to net zero’.  

Leading and best practice in the finance sector is increasingly set by internationally recognised standards, such as the TCFD1, plus, for green investment, frameworks such as SFDR2 and the EU Taxonomy of sustainable activities. Accordingly, in our detailed assessment below we have aligned our commentary to the main themes included in these standards and frameworks, namely strategy, governance, risk and opportunity management, metrics and targets, continuous improvement, stakeholder engagement and disclosure.  


GIG transitioned from Macquarie Capital to Macquarie Asset Management (MAM) around the end of the reporting period covered by this letter. This is a significant development. It provides GIG with the opportunity to operate at greater scale and to exert greater influence over the wider Macquarie group. Together GIG and MAM form an impressive platform with the resources and expertise to shift the dial on the flow of capital into green projects around the world. We look forward to seeing GIG thrive under these new arrangements.

GIG’s commitment to net zero is welcome. We recommend GIG develop and publish a net zero transition plan demonstrating how the commitment will be met, aligned with international standards.  

We remain disappointed that GIG has not invested beyond carbon emission reduction projects over the reporting period. As in previous letters, we encourage GIG to invest across the full spectrum of the green purposes, such as in nature-based solutions and the circular economy. These are not only essential areas on the journey to net zero but offer significantly growing market opportunities. Nevertheless, the steps GIG has made in battery storage and EV charging, and their plans to include some of these wider areas in future are welcome, as are such projects in the wider Macquarie group. We encourage GIG to publish more details on these developments as soon as it is able to. 


As the integration of GIG into MAM settles down, we would encourage greater clarity on the interaction between the new Chief Sustainability Officer, Macquarie’s net zero commitments and the governance of GIG’s Green Objective. 

GIG’s Green Governance Framework, for several years an industry benchmark, should be reviewed against emerging regulatory and best practice standards. As part of any future review, we believe consideration should be given to the thresholds at which an investment contributes to one or more green purpose. Currently, any investment which makes a positive contribution, or one which offers protection, is deemed sufficient. We encourage GIG to continue to operate to a higher bar, consistent with net zero and environmental targets.   

The GPC forms a key part of GIG’s governance arrangements. We enjoy a constructive relationship, including quarterly meetings with the senior leadership team and subject matter experts. Our regular meetings, together with an information sharing protocol and funding agreement, have helped ensure that the GPC role and special share arrangement remains effective and relevant, and contributes to GIG’s reputation as a green investor. It is important that GIG devotes the time and resources necessary to ensure that this remains the case.  

Risk and opportunity management

The identification, assessment and management of ESG (Environmental, Social and Governance) risks is core to GIG’s principles and policies and to the Green Governance Framework. We encourage GIG to consider enhanced disclosure of such risks and its risk management framework. This should include the methods to assess and mitigate risk, and to realise opportunities.

Metrics and targets

GIG’s green impact methodology follows widely accepted best practice. As with the wider governance framework, GPC believes there are opportunities to further strengthen this as the market evolves. 

First, when forecasting and reforecasting the green impact of a project over its lifetime, GIG may wish to consider applying a TCFD-style analysis process such as stress testing, uncertainty forecasting or scenario analysis, and adding this uncertainty to the green impact statements.

Second, the supply chain for green technologies extends far and wide. Accordingly, it is essential that robust processes are in place for assessing full Scope 3 carbon emissions, and to ensure full life cycle analysis and due diligence of the social and environmental impacts arising from the full value chain (e.g. any negative impact associated with the extraction, processing and supply of raw materials). 

Third, the methods to determine green impact beyond greenhouse gas emissions remains opaque for stakeholders. We recommend GIG discloses a robust explanation of the methods used, whether these are quantitative or qualitative.

The green impact disclosures within GIG’s annual Progress Report are subject to external assurance. This is welcome, but as in previous years, we note that in providing this assurance, the quality or accuracy of the underlying data was not in scope. Only the calculation methodologies and output data are assured. It is our view that this scope of assurance will only meet market expectations if there are: i) greater levels of disclosure as advocated in this letter; and ii) associated assurance is provided on those additional disclosures.

Continuous improvement

It is pleasing to note that GIG staff have been involved in the progression of various industry standards, frameworks and initiatives. This includes co-chairing the FAST Infra Sustainable Infrastructure Label, leading UK input into ISO 14030 and representing Macquarie on the Sustainable Markets Initiative. With this engagement GIG continues to demonstrate strong evidence of thought leadership and is aligned with peers in many respects. As GIG is now part of MAM we look forward to this influence extending into the various global asset managers’ initiatives to accelerate the path to net zero.

Stakeholder engagement

While GIG undertakes a range of outreach activities, including an annual stakeholder event, they could conduct more systematic stakeholder engagement in line with good practice.  To provide the foundation for such engagement, a comprehensive stakeholder mapping exercise should be undertaken to identify and categorise key stakeholders. Undertaking these exercises would align GIG with peers, many of which disclose their key stakeholders, how they engage with them, and the key issues identified through this engagement.


Disclosure is an area where, in our view, GIG is now at risk of falling significantly behind peers and leading practice. To maintain credible global leadership and influence within green investment policy, process and practice, GIG should aspire to leading edge disclosure practices. As noted above, there are several areas where disclosure could be improved. These include risk, stakeholder engagement and the metrics and targets associated with GIG’s commitments to net zero, among others.  

This concludes our annual letter 2022. We very much look forward to working with GIG over the year ahead. 

Trevor Hutchings
Chair, Green Purposes Company Ltd
21 November 2022


  1. Taskforce on Climate-related Financial Disclosure
  2. Regulation on sustainability-related disclosure in financial services