Our Sustainability Framework

Existing portfolio companies

Each of our portfolio companies is responsible for adopting and maintaining its own environmental and social risk management framework that adequately ensures compliance with the relevant regulation and standards for environmental and social responsibility (ESR) matters in the country and industry in which the asset operates.

Our ability to control or influence the ongoing management of ESR issues will differ for each asset based on the extent of control/governance rights at each asset through the level of ownership influence, board representation and regulatory environment governing each asset.

At APRR (including ADELAC) and Warnow, ALX has a non-controlling interest and accordingly ALX-appointed board representatives promote and support the implementation of good ESR practices within each asset to the extent that they are able to under the co-ownership arrangements.

As of 24 October 2017, ALX gained effective control over the Dulles Greenway with 100% estimated economic interest. Since this date, ALX management have conducted a thorough risk assessment of the asset, including its ESR practices and reporting, to determine whether any substantial changes are required.

Regular reporting from each portfolio company to ALX also assists in monitoring compliance with ESR requirements and in the identification of ESG issues across ALX’s portfolio. The ESR performance of each portfolio company is reported to the ALX Boards regularly, with major environmental and social incidents reportable within 48 hours of occurrence.

 

New Investments

ESR risks and opportunities are central considerations in ALX's evaluation of new investments. ALX aims to invest in portfolio companies that regard environmental and social issues as a high priority and we are committed to complying with all regulations and engaging responsibly with the community.

Accordingly, all potential investments are screened for environmental and social risks, including safety and climate change. ESR risks are included as part of the independent due diligence performed and included in any investment proposal presented to the ALX Boards for consideration.

In addition to our own processes and policies, new infrastructure projects/extensions are often subject to extensive social and environmental impact reviews by governments before being given approval to proceed.

 

The Manager's approach to Sustainability

The day-to-day management and administration of ALX is currently delegated to the Manager under the management and advisory agreements. The Manager, as part of Macquarie Asset Management, a division within the Macquarie Group, is committed to strong corporate governance and environmental and social responsibility. This approach is governed by Macquarie's ESG Framework and related policies.

It adopts a rigorous risk management framework which incorporates active management and monitoring or a broad range of risks, including environmental and social risks. The Manger is also guided by to the International Finance Corporation's (IFC) Environmental and Social Performance Standards and Environmental, Health and Safety Guidelines.

Key sustainability achievements include:

  • In 2017, Macquarie Asset Management submitted its first transparency report as a signatory to the United Nations-supported Principles of Responsible Investment (PRI).
  • Since 2010, Macquarie Group has maintained its commitment to carbon neutrality by reducing and offsetting emissions from its office energy use and business air travel1.
  • Macquarie Group manages 6,670MW of renewable energy assets globally.
  • Macquarie Group and ALX's headquarters at 50 Martin Place in Sydney has also been awarded a 6 Star Green Star Rating2, demonstrating the Group’s global commitment to sustainability.

Refer to the Macquarie Group website: www.macquarie.com/esg.

Macquarie Group staff working on behalf of ALX also volunteer and contribute their time, expertise and finances to community organisations through the Macquarie Group Foundation, The Foundation has raised over A$300 million since its inception through staff payroll giving, fundraising and Foundation matching. Over 50,000 hours of staff-time is volunteered annually.

Further information can be found on Macquarie Group's website at www.macquarie.com/foundation.

1. Macquarie offsets scope 2 and scope 3 emissions for corporate offices, data centres, base building and air travel.
2. 6 Star GreenStar Design and As Built rating, Green Building Council of Australia.

Our Sustainability Policies

ESR-related risks are dealt with under several of ALX's policies:

  • Environmental and Social Responsibility Policy: sets out the requirements for identifying and managing environmental and social risks which arise in the day-to-day activities of ALX.
  • Risk Management Policy: sets out the risk thresholds, framework and policies in place to manage investment, credit, liquidity, operational and legal risks associated with ALX's operations and investments.
  • Workplace Health and Safety Risk Policy: sets out the requirements for identifying and managing workplace health and safety risks which arise in the day-to-day activities of ALX.
  • Diversity Policy: outlines ALX's commitment and approach to ensuring diversity of experiences, skills, views and backgrounds for its directors and management.
  • Code of Conduct: sets out the expectations for ALX directors and management team in conducting business and outlines the values which employees are expected to act by.

These policies are available on the ALX website and form part of ALX's overarching risk management framework in accordance with Principle 7 of its corporate governance statement.

Here, we outline our approach to sustainability, or ESR, management. Our governance responsibilities and policies are covered in its Corporate Governance Statement (2017).

 

ESR-related regulatory requirements

ALX is not aware of any material breaches of relevant ESR-related regulatory standards by its assets during the year ended 31 December 2017.

Stakeholders engagement

ALX regularly engages with a broad range of stakeholders who are involved in, or impacted by, our business. Key stakeholders to ALX include our co-investors, portfolio company employees, governments and regulators, suppliers, securityholders and the wider communities in which our portfolio companies operate. Clear dialogue with these stakeholders is important to building strong relationships, maintaining trust and enhancing our business performance for the long term.