AMX UCITS CCF - ATLAS - Global Infrastructure Fund
The ATLAS Global Infrastructure Fund (the ‘Fund’) has met the necessary criteria to be classified as an Article 8 Fund as set out in SFDR. The Investment Manager of the Fund is ATLAS Infrastructure Partners (the ‘Investment Manager’) The Fund promotes environmental characteristics and seeks to invest in companies which follow good governance practices within the meaning of Article 8 of SFDR. In seeking to achieve the investment objective of the Fund, the Investment Manager aims to deliver long-term sustainable investment outcomes through the incorporation of environmental, social and governance (ESG) risks into every stage of analysis and decision making in the investment process. There are four primary elements to this process whereby the Investment Manager:
- considers the implications of each ESG factor at an individual portfolio company level. The Investment Manager assesses each company's ability to provide long term predictable cash flows, demonstrate adequate governance systems, its environment / climate transition strategy to comply with changes to regulation for each energy source, the potential physical risk exposure from climate change and the ‘social contract’ of each company (i.e., what service does it provide to society).
The Investment Manager takes the above ESG factors into account through its modelling and the impacts of those factors on the portfolio companies' cash flows and asset stress testing. This includes the use of external ESG data providers to complement their internal process and analysis;
- uses the results of the company level ESG due diligence in order to make portfolio investment decisions and to monitor and report ongoing portfolio risk to investors;
- uses the ESG analysis to actively engage with portfolio companies to promote responsible and sustainable decision making by company management teams; and
- establishes formal ESG governance structures and responsibilities to monitor the incorporation of ESG in the investment process and ensure that the portfolio outcomes are consistent with the sustainable objectives of the portfolio.
The ESG factors considered vary by industry and by company, and may include, but are not limited to:
- Climate-related risks, such as exposure and resiliency to acute and chronic weather events, and climate transition risks, such as potential exposure to stranded assets.
- Environmental degradation, including biodiversity, deforestation and land use, environmental pollution including water, air and plastic waste management, and resource scarcity.
- Quality of environmental-related disclosure.
- Environmental factors can have a direct or indirect cost through the recognition of externalities, and may result in reputational damage, business interruptions and increased regulation.
- Health and safety, human rights (including modern slavery), labour practices and supply chain management, employee. engagement, diversity, customer and stakeholder relationships, changing demographics and conflict zones and controversial weapons.
- Quality of social related disclosure.
- Social factors can also have a direct or indirect cost, and may result in reputational damage, business interruptions and increased regulation.
- Quality and composition of board and management, executive remuneration and shareholder rights.
- Anti-bribery and corruption, cyber security, accounting and auditing, political spending/lobbying, aggressive tax planning and technological disruption.
- Quality of governance related disclosure.
- Governance factors are qualitative in nature and are considered in the determination of terminal value and discount rate valuation adjustments.
The Fund does not have sustainable investment as its objective and does not utilise a reference benchmark with defined sustainability characteristics for the purpose of attaining the environmental or social characteristics. The Investment Manager is an active member of industry groups and bodies that support ESG outcomes. The Investment Manager also seeks to ensure that its corporate culture and incentives promote the ESG outcomes of the Fund. The Investment Manager's approach to responsible investment forms part of its investment process and philosophy. The aim is to deliver long-term sustainable outcomes for investors in the Fund, incorporating the principles of responsible investing while minimising risk.
The Investment Manager believes that companies that make good long-term returns can only do so if they maintain and reinforce their ‘social licence’ to operate. This is particularly true in the infrastructure sector where companies are often managing vital assets that are directly or indirectly regulated by the state. The Investment Manager's approach to implementing the principles of responsible investing is to ensure that it captures and measures the positive and negative ways in which companies can influence society and the environment and that these impacts are reflected in forecasts of future returns and potential risks.
The Portfolio Manager does not currently consider the principal adverse impacts of investment decisions on sustainability factors within the meaning of SFDR, as the relevant information required to appropriately assess the principal adverse impacts of investment decisions on sustainability factors is not yet available. The Portfolio Manager will keep the decision to not consider the principal adverse impacts of investment decisions on sustainability factors within the meaning of SFDR under regular review.
A description of the extent to which environmental and social characteristics promoted by the and how they are met can be found in the ATLAS Responsible Investment Policy https://www.atlasinfrastructure.com/esg/ and will be also be made available as part of the Fund’s periodic reports, as and when required.
For further information please visit: https://www.atlasinfrastructure.com/esg/