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2018

Asset

Assessment

Contents

About GRESB

GRESB is an industry-driven organization transforming the way capital markets assess the environmental, social and governance (ESG) performance of real asset investments.

GRESB data and analytical tools are used by over 70 institutional and retail investors, including pension funds and insurance companies, collectively representing over USD 17 trillion in institutional capital, to engage with investment managers to enhance and protect shareholder value.

For more information, visit gresb.com. Follow @GRESB on Twitter.

About the 2018 GRESB Infrastructure Assessment

The GRESB Infrastructure Assessment is an ESG engagement and benchmarking tool for institutional investors, fund managers and asset operators working in the infrastructure space.

The GRESB Infrastructure Assessment consists of two complementary components, a Fund Assessment and an Asset Assessment. Both components address critical aspects of ESG performance through a standardized, globally applicable, reporting and benchmarking framework. The GRESB Infrastructure Assessment focuses on operating investments, infrastructure assets, companies and funds, and covers the full breadth of infrastructure sectors, including:

The GRESB Infrastructure Assessment provides investors with actionable information and tools to monitor and manage the ESG risks and opportunities of their investments, and to prepare for increasingly rigorous ESG obligations. Assessment participants receive comparative business intelligence on where they stand against their peers, a roadmap with the actions they can take to improve their ESG performance and a communication platform to engage with investors.

The role of the GRESB benchmark

GRESB’s global benchmark uses a consistent methodology to compare performance across different regions, investment structures and sectors. This consistency, combined with our broad market coverage, means our members and participants can apply a single, globally recognized ESG framework to all their infrastructure investments. In 2018 GRESB introduces materiality assessment in to the process to further cater for sectoral variations beyond just the use of peer groups.

While GRESB provides an overall GRESB Score for each participant, it recognizes that this is only a single element within a range of results reported in the benchmark. The key to analyzing GRESB data is in peer group comparisons that take into account regional, sectoral and variations based on investment structure.

GRESB is committed to facilitating the inclusion of its ESG metrics in investment decision-making processes and encouraging an active dialogue between investors, fund managers and asset operators on ESG issues. GRESB updates its Investor Engagement Guide on an annual basis to assist GRESB Investor Members in their engagement with managers and operators.

Participation and Membership

Participation in both the Infrastructure Fund Assessment and the Infrastructure Asset Assessment is free of charge. All participants receive a Scorecard with a summary of ESG performance. Participants do not need to be GRESB Members, but GRESB Members have access to advanced analytical tools, including a detailed Benchmark Report and Portfolio Analysis Tool, as well as increased opportunity for recognition and networking.

Grace Period

GRESB offers participants reporting for the first time, the option to not disclose their first year Assessment results to their investors. This 'Grace Period' allows participants a year to familiarize themselves with the GRESB reporting and assessment process without externally disclosing their results to GRESB Investor Members.

While Grace Period participant names are disclosed to GRESB Investor Members, Investor Members are not able to request access to Grace Period participant results.

Grace Period participants can use the Scorecard and Benchmark Report to identify opportunities to improve their performance for next year’s Assessment. First time participants wishing to opt for the Grace Period can select the option from the settings section in the Assessment Portal.

Who can see my data?

Data is submitted to GRESB through a secure online platform and can only be seen by current GRESB Staff or authorized personnel from GRESB’s parent company, i.e. GBCI, Inc. ('GBCI'). GRESB benchmark scores are not made public. Data collected through the GRESB Infrastructure Assessment is only disclosed to the participants themselves and GRESB Investor Members that are investors in the infrastructure fund or asset.

No other third parties will see the data. GRESB Investor Members must request access to a participant’s benchmark scores, allowing the participant the control to either accept or deny this request.

Timeline and Process

The GRESB Infrastructure Assessment opens in the Assessment Portal on April 1, 2018. The submission deadline is July 1, 2018, providing participants with a three-month window to complete the Assessment. This is a fixed deadline, and GRESB will not accept submissions received after this date.

The GRESB validation process starts on June 15, 2018 and continues until July 31, 2018. We may need to contact you during this time to clarify any issues with your response.

Results are published in September and are distributed as follows:

Response Check

A Response Check is a high-level check of the Assessment response by GBCI, prior to final submission. It helps to reduce errors that may adversely impact the Assessment results and ensures the submission is as complete as possible.

The Response Check is available for request from April 1 to June 8, 2018 subject to available resources. We strongly encourage participants to place their request as early as possible.

Fund Manager and Asset Operator Members are able to request a complimentary Response Check for one entity as one of their membership benefits.

Guidance & Support

The Assessment Portal is accompanied by indicator-specific guidance, available under the 'Guidance' tab that explains:

In addition to the guidance in the Portal, each Assessment is accompanied by a Reference Guide. The Reference Guide provides general introductory information to the Assessments and provides a report-format version of the indicator-by-indicator guidance that is available under the Guidance tab in the Portal. The Reference Guide will be available on March 1, 2018. GRESB intends to provide translations of the 2018 Infrastructure Assessment in Japanese, French and Spanish.

The GRESB Assessment Portal has the following tools and functionality to help ensure an efficient and accurate submission:

GRESB works with a select group of Partners who can help participants with their Assessment submission. To learn more about the services offered by GRESB Partners, take a look at our Partner Directory.

Participants are able to contact the GRESB Helpdesk at any time for support and guidance.

GRESB Assessment Training Program

The GRESB Infrastructure Assessment Training is designed for GRESB participants who are looking to gain competency in the GRESB Infrastructure reporting processes. The training is designed for infrastructure fund managers, asset operators, investors, consultants and sustainability professionals looking to improve ESG management and reporting through the GRESB Assessments. It is also appropriate for governance, human resources and management personnel seeking an understanding of the GRESB Infrastructure framework.

The training is delivered via face-to-face group sessions in select locations across all regions with GRESB participation, including Europe, North America and Asia Pacific. See dates and locations for GRESB Assessment Training.

Starting in October 2018, GRESB will run Data Insights Training sessions focussing on the interpretation of the Assessment results and the reporting and benchmarking tools available to Investor Members, Fund Manager and Company Members.

2018 Infrastructure Asset Assessment changes

GRESB works closely with it’s members and broader industry stakeholders to ensure the GRESB Infrastructure Assessment addresses material issues in the ESG performance of infrastructure investments. Following internal review of the 2017 GRESB Infrastructure Assessment and extensive industry engagement through the GRESB Infrastructure Advisory Board and Industry Working Groups, the 2018 Asset Assessment introduces an updated structure and developments to the indicators.

Overview

General

1

For all indicators, a note has been added to indicate that the optional open text box is for additional information only and will not be considered in validation

Rationale for change: Based on 2017 participant feedback some participants believed that the open text box information could be used to clarify information and evidence for validation, however this is not the case, it is solely there as a communication tool for the investors to see.

Impact of change: Greater clarity, improved validation.

2

Indicator numbering has changed due to removing or adding indicators in 2018

Rationale for change: Administrative.

Impact of change: None.

3

More standardized metrics are introduced in 2018 (e.g. Reporting and Entity Characteristics, Performance Indicators)

Rationale for change: The intent is to standardize the reported data.

Impact of change: Simpler entry and greater clarity for the participant, more insightful benchmarking.

Indicator changes

Former EC2

Indicator EC2 'Business location' is removed

Rationale for change: This information has already been provided by the participant when registering their entity for the first time.

Impact of change: Standardized reporting and lower reporting burden for the participant.

EC2 (former EC3)

Terminology for ‘Nature of ownership’ is updated to ‘Public entity’ and ‘Private entity’. 'Public-Private Partnership (PPP)' option added to the option list

Rationale for change: Improved wording. Ensure participants select 'Private entity' if stocks are not traded on a public stock exchange.

Impact of change: Wording.

EC3 (former EC4)

Replace 'Date' open text box by a drop-down list of months

Rationale for change: In previous years this was an open text box.

Impact of change: Standardized reporting and lower reporting burden for the participant.

EC5 (new)

New indicator on 'Commencement of operation'

Rationale for change: Provides contextual information about the asset which is useful to investors and for generating insights. For example, assets that only recently commenced operation may have different stakeholder expectations to those that have been operating for many years.

Impact of change: Minor additional reporting.

RC2

'Gross asset value' listed as a requirement for reporting entity’s economic size. 'Annual operating costs' and 'Other' options added. Ability to choose 'Currency' removed, instead currency is derived from RC1

Rationale for change: Review of previous years’ responses indicated that a more standardized approach could be applied.

Impact of change: Greater clarity and better benchmarking including generation of intensity metrics and size comparisons.

RC3

Open text box for 'Method used' replaced with 3 options (1) 'Gross asset value', (2) 'Annual operating costs', and (3) 'Other'

Rationale for change: Review of previous years’ responses indicated that a more standardized approach could be applied.

Impact of change: Greater clarity and better benchmarking including generation of intensity metrics and size comparisons.

RC4

3 options (1) 'Gross asset value', (2) 'Annual operating costs', and (3) 'Other' added under 'Weights based on relative economic activity'. 'Even weights' option removed

Rationale for change: Review of previous years’ responses indicated that a more standardized approach could be applied.

Impact of change: Greater clarity and better benchmarking including generation of intensity metrics and size comparisons.

MA1 (new)

New indicator on materiality assessment introduced. The intent of this indicator is to test whether the reporting entity has undertaken a materiality assessment

Rationale for change: Assessing the materiality of ESG issues has been identified by stakeholders as an important tool in managing ESG performance across the diverse sectors that make up infrastructure. It also supports the new MA2 indicator.

Impact of change: Additional reporting, greater differentiation, useful information for investors.

MA2 (new)

New indicator 'GRESB Materiality Assessment' is introduced. This indicator is for reporting purposes only. The intent of this indicator is to (a) show the participant their relevant sector materiality weightings for ESG issues, and (b) collect data about the entity/asset specific materiality weightings

Rationale for change: The sector weightings selected in RC4 are used to drive the scoring in many other indicators. The entity/asset specific materiality weightings will not be used for scoring in 2018 but can be used for scoring trials and insights and will be considered for scoring in 2019.

Impact of change: Additional reporting, Asset Assessment scoring tailored to the different infrastructure sectors, greater differentiation, useful information for investors.

MA3 (former MA1)

'General sustainability' option added to the options list. Additional parts on 'Integration of ESG objectives' and 'Communication process' introduced. Evidence split between public and not public

Rationale for change: Improving alignment between GRESB assessments.

Impact of change: Easier understanding across GRESB assessments.

MA4 (former MA2)

Changed to “...one or more persons…” instead of simply “an individual…”. 'Other' option is removed. Changed 'E-mail' to optional

Rationale for change: Indicator aligned with Real Estate and Debt Assessments, recognizing that ESG may be managed by one person or a team. In previous years, the majority of the provided 'Other' answers were a duplicate of the listed options. Email information is collected elsewhere as part of registration.

Impact of change: Easier understanding across GRESB assessments, more flexible to responses, lower reporting burden.

MA5 (former MA3)

Changed 'E-mail' to optional

Rationale for change: Email information is collected elsewhere as part of registration.

Impact of change: Lower reporting burden.

MA6 (former MA4)

Minor wording changes in this indicator. 'Board of Directors' option added to the option list. 'Operating staff' renamed as 'All employees'

Rationale for change: Improving alignment between GRESB assessments and other business lines.

Impact of change: Easier understanding across GRESB assessment.

MA7 (former MA5)

Minor wording changes in this indicator

Rationale for change: GRESB internal review concluded that more clarity is needed between provided and/or required training for different stakeholder groups.

Impact of change: Greater clarity.

PD1

New issues 'Light pollution', 'Materials sourcing & resource efficiency', 'Noise', and 'Water pollution' added to the list. Scoring depends on materiality of issues. Stakeholder list updated by replacing 'Supply chain' with two separate options (1) 'Suppliers' and (2) 'Supply chain (beyond tier 1 suppliers & contractors)'

Rationale for change: GRESB internal review and mapping of external frameworks such as PRI and GRI concluded that additional sector-specific issues should be covered. Supply chain split and clarified to align with ISO20400 standard on sustainable procurement.

Impact of change: Greater coverage of relevant issues, clearer and better differentiation, scoring tailored to infrastructure sector.

PD2

New issues 'Community development' and 'Social enterprise partnering' added to the list. Scoring depends on materiality of issues. Stakeholder list updated by replacing 'Supply chain' with two separate options (1) 'Suppliers' and (2) 'Supply chain (beyond tier 1 suppliers & contractors)'

Rationale for change: GRESB internal review and mapping of external frameworks such as PRI and GRI concluded that additional sector-specific issues should be covered. Supply chain split and clarified to align with ISO20400 standard on sustainable procurement.

Impact of change: Greater coverage of relevant issues, clearer and better differentiation, scoring tailored to infrastructure sector.

PD3

Governance issues split into two groups (1) Board-level policy, and (2) Operational policy. Clarified that 'Operational policy' is applicable to other stakeholders. Scoring depends on materiality of issues. Stakeholder list updated by replacing 'Supply chain' with two separate options (1) 'Suppliers' and (2) 'Supply chain (beyond tier 1 suppliers & contractors)'

Rationale for change: 2017 participant feedback indicated that only operational governance issues are applicable to other stakeholder groups such as suppliers and contractors. Supply chain split and clarified to align with ISO20400 standard on sustainable procurement.

Impact of change: Clearer and better differentiation, scoring tailored to infrastructure sector.

PD4 (former PD6)

Minor wording changes in this indicator. 'Aligned with third-party standard' option added under each reporting method

Rationale for change: Improving alignment between GRESB assessments. Clarified reporting to align with industry accepted approaches to ESG reporting.

Impact of change: Easier understanding across GRESB assessments, greater differentiation.

PD5 (former PD4)

'Internally verified by' option removed. Minor wording changes to match PD4

Rationale for change: ‘Internally verified’ is not as robust as external approaches and is hard to validate. Improving alignment between GRESB assessments. Clarified reporting to align with industry accepted approaches to ESG reporting.

Impact of change: Improved validation, easier understanding across GRESB assessments, greater differentiation.

PD6 (former PD7)

Indicator title wording slightly adjusted. 'Clients/Customers', 'Contractors', 'Employees', 'Regulators/Government', 'Special interest groups (NGOs, Trade Unions, etc.)' and 'Suppliers' options added

Rationale for change: GRESB internal review concluded that a standardized stakeholder list needs to be implemented throughout the Fund and Asset Assessments.

Impact of change: Greater clarity.

PD7 (new)

New indicator addresses involvement in any ESG-related misconduct, penalties, incidents or accidents in the reporting year. This indicator is for reporting and sector leader award purposes only. The intent of this indicator is to facilitate communication and transparency on significant incidents. Whilst not used for scoring, the response to this indicator may prohibit achievement of sector leadership

Rationale for change: Facilitates communication on significant incidents. Use in determining sector leadership ensures the robustness of the GRESB Assessment.

Impact of change: Additional reporting, greater differentiation, useful information for investors.

RO1

New issues 'Light pollution', 'Materials sourcing & resource efficiency', 'Noise', and 'Water pollution' added to the list. Scoring depends on materiality of issues

Rationale for change: GRESB internal review and mapping of external frameworks such as PRI and GRI concluded that additional sector-specific issues should be covered.

Impact of change: Greater coverage of relevant issues, clearer and better differentiation, scoring tailored to infrastructure sector.

RO2

New issues 'Community development' and 'Social enterprise partnering' added to the list. Scoring depends on materiality of issues

Rationale for change: GRESB internal review and mapping of external frameworks such as PRI and GRI concluded that additional sector-specific issues should be covered.

Impact of change: Greater coverage of relevant issues, clearer and better differentiation, scoring tailored to infrastructure sector.

RO3

Governance issues split into two groups (1) Board-level policy, and (2) Operational policy. Scoring depends on materiality of issues

Rationale for change: Layout change is introduced to be consistent with PD3.

Impact of change: Greater clarity, scoring tailored to infrastructure sector.

RO4 (former PD5)

Indicator moved from 'Policy & Disclosure' to 'Risks & Opportunities' aspect

Rationale for change: Improving alignment between GRESB assessments.

Impact of change: Easier understanding across GRESB assessments.

RO5 (former IM1)

Indicator moved from 'Implementation' to 'Risks & Opportunities' aspect.

Rationale for change: GRESB internal review concluded that this indicator addresses ESG opportunities and should be moved to this aspect instead.

Impact of change: Greater clarity.

ME1 (merged former ME1 and CA1)

ME1 and CA1 (2017) are merged into a new indicator in 2018

Rationale for change: GRESB internal review noted that ME1 and CA1 indicators were overlapping as participants provided the same information for both indicators.

Impact of change: Lower reporting burden.

ME2-4 (former ME2)

Indicator ME2 (2017) is split into three separate indicators focusing on monitoring environmental (ME2), social (ME3), and governance (ME4) issues. An open text box is replaced by a list of issues. Scoring depends on materiality of issues.

Rationale for change: Structure aligns with MA, PD and RO.

Impact of change: Lower reporting burden, scoring tailored to infrastructure sector, clearer guidance.

SE1

Indicator title wording slightly adjusted. 'Training' option added to the list. Added new sub-section highlighting stakeholder list the engagement program applies to

Rationale for change: GRESB internal review noted that an additional option on training should be addressed.

Impact of change: Clearer and better differentiation.

SE2 (former SE3)

Changes in indicator numbering

Rationale for change: GRESB internal review concluded that this indicator should follow after SE1 as it refers to the implementation of stakeholder engagement activities.

Impact of change: Greater clarity.

SE3 (former SE2)

Indicator split into two indicators in 2018: (SE3) 'Process for stakeholders to communicate grievances', and (SE4) 'Stakeholder grievances in the last reporting year'. Indicator is aligned with ISO20400. As a result, minor wording changes are introduced and additional options added to the 'characteristics of the grievance communication process'

Rationale for change: Improving alignment between GRESB assessments. Align with ISO20400 standard on sustainable procurement.

Impact of change: Greater clarity.

SE4 (former SE2)

Indicator split into two indicators in 2018: (SE3) 'Process for stakeholders to communicate grievances', and (SE4) 'Stakeholder grievances in the last reporting year'

Rationale for change: Improving alignment between GRESB assessments.

Impact of change: Greater clarity.

SE5 (new)

New indicator reflecting sustainable procurement practices. Indicator is aligned with ISO20400. The intent of this indicator is to identify if the reporting entity has ESG-specific requirements in its procurement processes in order to drive sustainable procurement

Rationale for change: Align with ISO20400 standard on sustainable procurement.

Impact of change: Additional reporting, greater differentiation, useful information for investors.

SE6 (new)

New indicator on supply chain engagement

Rationale for change: The intent of this indicator is to identify if the reporting entity effectively engages with its suppliers in order to drive sustainable procurement. Align with ISO20400 standard on sustainable procurement.

Impact of change: Additional reporting, greater differentiation, useful information for investors.

Performance Indicators

Standardized metrics are introduced for each performance indicator

Rationale for change: The intent is to standardize the reported data. Metrics chosen are based on previous years’ responses and alignment with industry standards.

Impact of change: Clarity for the participant, better benchmarking.

Performance Indicators

Standardized units are introduced for each performance indicator

Rationale for change: The intent is to standardize the reported data.

Impact of change: Clarity for the participant, better benchmarking.

Performance Indicators

Entity is required to report its performance for current year only

Rationale for change: The intent is to standardize the reported data.

Impact of change: Lower reporting burden, clarity for the participant, better benchmarking.

Performance Indicators

Targets are set for current year and one long-term performance target of entity’s choice

Rationale for change: The intent is to standardize the reported data.

Impact of change: Lower reporting burden, clarity for the participant, better benchmarking.

Performance Indicators

Scoring of all Performance Indicators (except PI1) now links to the sector materiality.

PI1 is not scored but is used for generating intensity metrics which may be used for insights. If the sector materiality assessment has determined that an issue is 'not relevant' then the related performance indicator is not scored. If an issue is 'relevant' then the related performance indicator is scored with ‘standard’ weighting. If an issue is 'highly relevant' then the related performance indicator is scored with higher than ‘standard’ weighting. PI1 is not scored but is used for generating intensity metrics which may be used for insights.

CA1

Indicator CA1 'Entity-level accreditations' is removed

Rationale for change: GRESB internal review noted that ME1 and CA1 indicators were overlapping as participants provided the same information for both indicators.

Impact of change: Lower reporting burden.

CA1 (former CA2)

Changes in indicator numbering

Rationale for change: Administrative.

Impact of change: None.

CA2 (former CA3)

Changes in indicator numbering

Rationale for change: Administrative.

Impact of change: None.

CA4

Indicator CA4 'Case studies' is removed

Rationale for change: The intent is to integrate this information into the GRESB portal.

Impact of change: This information will not be linked to the GRESB results; however, will be used as individual GRESB insights.

Entity & Reporting Characteristics

Entity Characteristics

2017 Indicator

Reporting Characteristics

2017 Indicator

Management

Materiality

2017 Indicator

1.3 points , MP, G

Not scored

Objectives

2017 Indicator

2.8 points , MP, G

Leadership & Accountability

2017 Indicator

1.3 points , MP, G

1.3 points , MP, G

2.8 points , MP, G

Training

2017 Indicator

2.8 points , MP, G

Policy & Disclosure

Policies

2017 Indicator

2 points , MP, E

2 points , MP, S

2 points , MP, G

ESG Disclosure

2017 Indicator

2 points , MP, G

2 points , MP, G

2 points , MP, G

Not scored

Risks & Opportunities

Risk Assessments

2017 Indicator

3.7 points , MP, E

3.7 points , MP, S

3.7 points , MP, G

2 points , MP, G

Implementation

2017 Indicator

9.1 points , IM, G

Monitoring & EMS

5.1 points , MP, G

1.7 points , IM, E

1.7 points , IM, S

1.7 points , IM, G

Stakeholder Engagement

2.6 points , MP, G

2.6 points , IM, G

2.6 points , MP, G

Not scored

1.3 points , MP, G

1.3 points , IM, G

Performance Indicators

Output

2017 Indicator

Not scored

Health & Safety

2017 Indicator

Determined by materiality , IM, S

Energy & Emissions

2017 Indicator

Determined by materiality , IM, E

Determined by materiality , IM, E

Determined by materiality , IM, E

Water & Waste

2017 Indicator

Determined by materiality , IM, E

Determined by materiality , IM, E

Biodiversity & Habitat

2017 Indicator

Determined by materiality , IM, E

Certifications & Awards

Certifications

2017 Indicator

2.5 points , IM, G

Awards

2017 Indicator

Not scored