UEM seeks to add value and identify specific risks by incorporating environmental, social, and governance (ESG) considerations into its investment framework.
Our Approach
We look for value at the intersection between financial performance and sustainability approach, and differentiate between companies that are vulnerable to disruption and that are adaptive. This helps us to uncover opportunities and evaluate potential risks, to secure the best long-term total return.
We integrate material ESG factors that might affect investment performance in our research analysis, decision making, and ongoing monitoring.
We believe a strong corporate governance structure is key to performance and apply greater weighting to: country risk, shareholder rights, transparency, related parties, audit and accounting, board composition and effectiveness, and executive oversight.
ICM, the group that manages UEM, is a signatory to the UN Principles for Responsible Investment.
ICM is an investment group built on a philosophy of value creation, vision and innovation. ICM continually looks for compelling investment opportunities, and it thrives on market imperfections based on years of experience in investments and investment processes. ICM actively engages with its investee companies on material ESG issues with the intention of creating a positive impact on its results and the groups ICM work with. Active monitoring of investee companies is an essential part of ICM’s responsible investment strategy. As sustainability is an important part of its investment philosophy, ESG factors are integrated into the investment processes.
Responsible Investment Policy
Our Responsible Investment Policy is based on three central principles:
- Understanding: in-depth analysis of the key issues and opportunities that face potential and current holdings, as well as the industry in which they operate.
- Integration: incorporate our Understanding into company analysis to ensure a clear and complete picture of the investment opportunity is obtained. This forms part of an action plan for each potential or current investment.
- Engagement: work with portfolio companies on the key issues on a regular basis and, where possible, hold face-to-face meetings to help them understand and guide them towards an improved ESG position. All levels of engagement are recorded to ensure full disclosure.
Key Statistics
of UEM's top 30 assets
as of 31 March 2024
63%
have conducted a climate risk assessment
87%
publish a sustainability report
40%
disclose emissions reduction targets
90%
have a policy centred around diversity, equity and inclusion (DEI)
73%
have an active carbon management plan
Case Studies
Social Infra
Urbanisation and rise of the middle class driving demand for better social infrastructure
Orizon Valorizacao de Residuos S.A.
Brazilian provider of waste management and value recovery solutions, from recycling through to biogas and power generation.
ESG Analysis: Orizon has strong environmental credentials. The business plays a crucial role in reducing greenhouse gas (GHG) emissions and was the first company in Brazil to implement clean power generation systems at its network of ecoparks. These facilities capture and treat the methane gas produced by decomposing waste, either for sale or for on-site use. The ecoparks handle approximately 10% of all compliantly treated waste volumes in Brazil, and this figure is expected to grow as capacity increases. On-site biogas power plants at Orizon’s ecoparks have a generation capacity greater than 190,000 MWh per year, enough to supply power to 290,000 people.
ESG Conclusion: Orizon is well-placed to benefit from the opportunities that arise from the energy transition and the sustainable development of cities.
Energy Growth and Transition
Decarbonisation and investment in energy to support strong economic growth
Alupar Investimento S.A.
Operating within the energy sector, Alupar is active in transmission and generation, focusing on the development and investment of projects in Brazil and other South American countries.
ESG Analysis: Alupar operates 13 renewable assets, totalling 821.5 MW of installed capacity, giving it a strong environmental focus, while the construction of new transmission lines is beneficial to Brazil’s economic development. The gains from these assets outweigh their potential negative impacts. These benefits include low-cost generation, obtaining renewable energy, preserving the environment, creating new jobs, and strengthening the local economy. The company has improved ESG disclosure by publishing an annual ESG report, while its Code of Ethics addresses its social obligations.
ESG Conclusion: With a commitment to generating value for society and its shareholders, Alupar invests in technical competence, strong financial discipline, and social responsibility. This enables it to continue its sustainable growth through the development of renewable generation projects and transmission systems.
Digital Infra
Rapid digital adoption accelerating demand for digital infrastructure
InPost S.A.
E-commerce logistics infrastructure player, specialising in automated parcel machines (APMs), headquartered in Poland with a growing presence in France and the UK.
ESG Analysis: InPost continues to be focused on its ESG commitments and has a comprehensive ESG strategy. Alongside its aggressive expansion policy, the company is making good progress to reach its target of becoming carbon neutral by 2025 in scope 1Scope 1 emissions and 2 emissionsScope 2 emissions and the entire supply chain (including scope 3) by 2040.
ESG Conclusion: There is evidence of progress since InPost released its ESG strategy in 2022. The most significant achievement is the implementation of a decarbonisation plan, setting the tone for InPost to continue its sustainability journey.
Global Trade
Trade being fuelled by structural growth drivers, geopolitical dynamics and shifting supply chains
Rumo S.A.
Brazil’s largest railway operator, with five rail concessions of approximately 13,500 km track and 1,200 locomotives.
ESG Analysis: Rumo continues to improve its ESG transparency and improve its environmental credentials. It has set goals to reduce GHG emissions by 15% by 2023 and trace 100% of the agricultural commodities it transports by 2025. Rumo has also improved its safety performance and has made commitments to enhance community initiatives and social development. Questions remain around corporate governance, with the lack of independence on the board being of prime concern.
ESG Conclusion: We are encouraged by Rumo's reducing emissions data and commitment to social activities and continue to encourage improvements to their corporate governance.