08 December 2022
GIG’s mission is to accelerate the transition to net zero. This mission underpins everything we do and is enshrined in our robust green impact governance framework.
Any Macquarie Group activity which is aligned to GIG is overseen by UK Green Investment Bank Limited, itself indirectly owned by Macquarie Group Limited. This means that investments made by any Macquarie Group entity using the GIG name and brand for trading and marketing purposes is only permitted to do so if that activity complies with our Green Objective (which is detailed in the Articles of Association of UK Green Investment Bank Limited and lists our five Green Purposes), our Green Investment Principles and our Green Investment Policy, together making up our unique green impact governance framework.
All investment activity undertaken under the GIG name and brand must contribute to one or more of our five Green Purposes. When we describe ‘green impact’, we mean a positive contribution to these Green Purposes.
These Green Purposes form a binding part of GIG’s governance framework. Not only are they written into our Articles of Association, they can also only ever be altered with the consent of the holder of the ‘special share’, the Green Purposes Company. No proposal has been made to amend the Green Purposes since the business was acquired by Macquarie Group in 2017.
Reduction of greenhouse gas emissions means reducing emissions of atmospheric gases responsible for causing global warming and climate change from human-caused sources to the atmosphere.
Natural resources are those renewable and finite naturally occurring assets that can be used for economic production or consumption. These include mineral and energy resources, soil resources, water resources and biological resources.
Protection or enhancement of the natural environment means managing the effects of human activity on our physical environment - land, water and air - in a way that does not degrade the environment over time but maintains or improves environmental quality and functions.
Protection or enhancement of biodiversity means retaining or restoring the variability among living organisms and the ecological complexes of which they are part, including diversity within species, between species and of ecosystems.
Promotion of environmental sustainability means actively and visibly supporting, encouraging or facilitating the transition to a greener global economy through the indirect effects of our investments.
The Green Purposes Company Limited (GPC) is the holder of the ‘special share’ in UK Green Investment Bank Limited. The GPC is a company limited by guarantee. It has five Trustees who are independent of GIG and Macquarie Group. The primary role of the Trustees is to approve or reject any changes proposed to GIG’s Green Purposes. The Trustees were appointed on 31 October 2016 for an initial term of five years commencing August 2017. In performing its role, the GPC is committed to public accountability, transparency and competency, and to contributing positively to GIG’s future development.
We maintain a strong and constructive working relationship with the GPC Trustees and meet on a quarterly basis to discuss our projects, evolving business strategy, and green impact. The Trustees also continue to receive information relating to the green impact of all new GIG transactions as they happen. As in previous years, this year’s Progress Report includes a letter from the GPC commenting on our performance against our five Green Purposes.
We measure and report on the green impact of our investment activities with rigour and transparency. We have maintained a consistent and robust approach since our inception to ensure all our investment activities contribute positively to at least one of GIG’s Green Purposes.
Our investment approach is underpinned by a framework of three documents which drive all our investment decisions. All three documents are publicly available on the GIG website.
Sets the benchmark for assessing and managing the green impact of investment transactions and related activity.
Describes how we ensure that our activities and those of our portfolio companies and funds align with our Green Investment Principles.
Sets out how we calculate and report the green impact of our investments and activities.
We report the quantitative green impact of our activities in our green impact statements. We continue to report the green impact of projects on the GIG balance sheet and now also report on the green impact of projects in funds that carry the GIG brand, following our transition into MAM.
The quantitative green impact of all of our projects is measured by comparing the performance of a project to a defined baseline or ‘counterfactual’. This baseline is what would happen in the absence of a project. We do not report green impact for projects into which we have only provided development funding at this stage, due to the relative uncertainty over potential future green impact.
The green impact statements indicate the principal quantifiable environmental benefits arising from our investments into projects that have reached Final Investment Decision (FID).
Selected totals for data in the green impact statements are independently assured each year. Those totals in respect of the financial year 2021/22 have been independently assured by Deloitte in accordance with the Independent Assurance Report.
Since 2020, we have also measured and disclosed the qualitative contributions of our activities to our five Green Purposes through Green Ratings. In line with our green impact statements, we continue to report the green impact of projects on the GIG balance sheet and now also report on the green impact of projects in funds which use the GIG brand.
Our green ratings methodology informs our investment decisions, with a project’s contribution evaluated on a scale of AAA to E. In line with our quantitative impact assessment, the qualitative green impact of all of our projects is measured by comparing the performance of a project to a defined baseline or ‘counterfactual’. This baseline is what would happen in the absence of a project.
As with our quantitative reporting, we do not report qualitative green impact for projects into which we have only provided development funding at this stage, due to the relative uncertainty over potential future green impact.
Each year we report on our total ratings given to investments in the year (at FID or later, in accordance with our Green Impact Reporting Criteria).
Our net zero update for the financial year 2022 is provided in the standalone GIG Financed Emissions report, which accompanies this Progress Report. The update details our financed emissions through FY22 with explanation of the measurement approach.
Reflecting our move into MAM and transition to a fiduciary asset manager, GIG’s approach to net zero is being reviewed and will be reported in a subsequent update.