IFM Investors’ purpose is to invest, protect, and grow the long-term retirement savings of working people.  

Working with Investee Infrastructure companies through the energy transition 

As one of the largest infrastructure investors in the world, our approach at investee companies centers on long-term ownership and the active management of essential community assets, such as water management services, tolls roads, and airports. While our asset-level activities remain vital to delivering real world emissions reductions, our approach has evolved to include system-level actions towards stronger economic, environmental, and social systems. 

Public-private collaboration to drive systemic change  

We believe that long-term investment returns are dependent on healthy economic, environmental, and social systems, all of which can be positively influenced through policy advocacy. Systemic change cannot be achieved by the private sector alone. We need increased collaboration among all stakeholders and strong leadership from governments to address the complex and converging issues in the energy transition and unlock the capital it requires. Government needs to work with investors and set “rules of the road” that incentivize sustainable market behaviors and allocation of capital. 

IFM believes investors have an important role to play in supporting appropriate government action.  Governments face a fiendishly complex set of risks in steering economies through the energy transition. Setting policy and regulations that support an orderly transition can be aided by well-informed, long-term investors that recognize the need for public policy to reflect the public interest.   

IFM has been working closely with governments globally to help achieve the public policy and investment settings that can facilitate investment in the energy transition and support climate risk mitigation. For example, IFM convened eight of Australia’s largest investors representing around A$1 tr of assets under management to agree on a single set of recommendations – a policy blueprint – that we believe would help the Australian economy accelerate its energy transition. These include recommendations for how to increase competition in the delivery of greenfield transmission projects; enhance community consultation and planning; incentivize investment in community and distribution-level batteries through regulatory change; and develop a Sustainable Aviation Fuel (SAF) industry in Australia. 

IFM also has entered collaborative strategic initiatives with other private sector organizations that seek to deliver strong long-term returns for our investors, as well as delivering broader sectoral and system benefits. For example, IFM entered into a memorandum of understanding with GrainCorp Limited (GrainCorp), the largest processor of renewable feedstocks in Australia and New Zealand, to jointly study the feasibility of producing SAF in Australia. Together, IFM and GrainCorp bring expertise spanning the entire SAF supply chain, from farming of renewable feedstocks to airside refueling.  The initiative is a significant step in IFM’s commitment to work with policy makers and the aviation sector to accelerate efforts to decarbonise aviation through the use of SAF.

IFM has also partnered with QIC, another of Australia’s largest infrastructure fund managers, and designed and executed a large-scale power-purchase agreement program – the largest multi-asset, multi-state program of its kind in Australia – which will help reduce electricity costs and greenhouse gas emissions at key Australian airports, ports, energy utilities, roads, and hospitals. It is estimated the project will facilitate the supply of more than 400 GWh of renewable energy per annum by 2025. 

IFM and QIC partnered in the program to help create the scale necessary to deliver cost savings and significant emissions reductions for the portfolio companies they manage. By joining this program, several of IFM’s assets have been able to accelerate their net zero targets. (Neither IFM or GIC charged fees for organising the program, and other infrastructure businesses are encouraged to join the program to accelerate the Australian infrastructure sector’s net zero efforts.) 

Improving industry practice in the integration of Social Factors 

In addition to the economic and environmental change occurring as part of the global energy transition, the integration of social factors into our investment activities is a core focus for IFM. For example, IFM’s Chief Strategy Officer, Luba Nikulina, chairs the UK Taskforce on Social Factors, established by the UK Department for Work and Pensions, which has released guidance for the UK pensions industry on how social factors can be better incorporated into investment decisions and stewardship policies. The guide is intended to provide pension trustees with the tools to identify and monitor social risks and opportunities and develop consensus in approaching these across the pension investment landscape.  

IFM looks forward to working with FCLTGlobal and other institutions seeking to focus capital on the long term to contribute to healthier environmental and social systems in the years to come.