GLI 2022
Sustainability 
Report

Contents
Introduction
Our approach
A snapshot of our progress
ESG focus areas
	
Energy transition
	
Climate risk
	
Modern slavery
	
Corporate governance
Proxy voting
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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Introduction
Welcome to the First Sentier Investors (FSI) Global 
Listed Infrastructure Sustainability Report for 
the year ended 31 December 2022.  This report 
intends to provide transparency on how we assess 
the environmental, social and governance (ESG) 
performance of companies we invest in, how we 
engaged with leadership and insights from our research 
during the year. Through reporting on our approach 
to ESG, we want to communicate how we integrate 
responsible investment principles into our investment 
approach. 
Countries across the world are grappling with issues 
such as climate change mitigation, climate change 
adaption, energy security, reliability and affordability. 
We recognise these issues are complex and will require 
a wide range of financial and technology solutions. In 
particular, global listed infrastructure companies will be 
at the forefront of the global energy transition and will 
play an integral part in achieving net zero emissions. 
As long-term and active investors, we know that the 
investment decisions we make today will impact future 
generations. We take an active approach to proxy 
voting to convey our views to boards and management 
on important topics including board composition, 
remuneration packages and climate transition plans.
Through company engagement we seek to better 
understand risk in our portfolio, suggest areas for 
improvement, increase transparency on ESG issues, 
and support companies that are making progress in 
this area. We typically engage companies on material 
issues to achieve specific outcomes. More broadly, we 
participate in industry groups such as Climate Action 
100+ to push for change on complex issues such as 
energy transition and the pathway towards net zero. 
Aligning with FSI’s firm-wide commitment, we are 
committed to building investment portfolios with a 
target of net zero by 2050 and are pursuing interim 
targets by 2030 to reduce the Weighted Average 
Carbon Intensity of our investment portfolios1.  We will 
seek to prioritise the direction of capital to infrastructure 
companies that are aligned or aligning with a pathway to 
net zero by 2050 and encourage the investment of this 
capital into real assets that reduce absolute emissions. 
As stewards of our clients’ capital, we will continue to 
engage with companies on these issues with a view to 
delivering more sustainable risk adjusted returns.
1.	
The team’s net zero target applies to all Global Listed Infrastructure and Responsible Listed Infrastructure pooled vehicles, and to separate client accounts that are subject to equivalent 
investment guidelines.
Important Information
This material contains measurements and data relating to ESG factors and metrics, together with specific ESG related commitments and targets. 
The measurements and data relating to ESG factors and metrics are estimates based on information sourced by the relevant investment team from third parties including portfolio companies and 
such information may ultimately prove to be inaccurate.
These commitments or targets are current as at the date of publication and have been formulated by the relevant investment team in accordance with either internally developed proprietary 
frameworks or are otherwise based on the Institutional Investors Group on Climate Change (IIGCC) Paris Aligned Investment Initiative framework. The commitments and targets are based on 
information and representations made to the relevant investment teams by portfolio companies (which may ultimately prove not be accurate), together with assumptions made by the relevant 
investment team in relation to future matters such as government policy implementation in ESG and other climate-related areas, enhanced future technology and the actions of portfolio 
companies (all of which are subject to change over time). As such, achievement of these commitments and targets depend on the ongoing accuracy of such information and representations as 
well as the realisation of such future matters. 
Any commitments and targets set out in this material are continuously reviewed by the relevant investment teams and subject to change without notice.

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Our approach
ESG issues are fundamental to infrastructure 
companies, given they have significant service 
obligations and moral accountability to the communities 
in which they operate. We assess infrastructure 
companies on a broad range of ESG-related factors, 
including but not limited to energy transition, climate 
risk, modern slavery and corporate governance. We 
are conservative investors of our clients’ capital, 
recognising that capital preservation is critical to 
achieving long-term capital growth. We focus on 
fundamental value and conduct thorough due diligence 
to minimise risk. We place strong emphasis on 
proprietary research and direct contact with companies 
and regulators. 
At a group level, FSI has identified four main investment 
stewardship priorities: climate change, human rights 
and modern slavery, nature and biodiversity and 
diversity. These priorities address the ESG issues that 
pose the most significant long-term financial risks to 
our investments, while also presenting the greatest 
opportunities.
Engage with management and board on ESG 
issues and performance
The most important source of research for the FSI 
Global Listed Infrastructure (GLI) team is internally 
generated analysis based on regular meetings we 
hold with senior management and other stakeholders 
including suppliers, competitors, regulators and industry 
bodies. When the GLI team engages with companies 
on ESG issues, we use meetings with management to 
better understand the situation from their perspective, 
and to openly raise concerns where we see a potential 
gap in ESG performance. If we don’t see performance 
improvement, we will escalate the issue to the 
company’s board of directors to outline our concerns. 
Ultimately, we will consider divestment if we do not see 
a willingness to change or address the issue.
ESG assessment integrated into investment 
process
The assessment of ESG issues, strategy and 
performance represents an essential part of our 
investment process. We seek to understand the risks 
for each company and assess them in our proprietary 
quality ranking which consists of 25 criteria that 
influence stock returns for infrastructure securities. A 
score is assigned to each criteria; a lower quality score 
makes it harder for a stock to be included within the 
overall portfolio. ESG assessment is both a science 
and an art that blends data points and qualitative 
engagements. We then build on those findings by 
conducting asset tours, and spending time with 
company management and board of directors. We have 
been doing this for over 15 years.
ESG Metrics
The GLI team maintains a database of key ESG metrics 
across the strategy’s entire investible universe (focus 
list)2. These metrics include a range of climate-related 
statistics, including absolute carbon emissions, 
carbon footprint and carbon intensity. It includes key 
2.	   GLI investment universe includes ~140 listed companies, which meet the GLI strict definition of core infrastructure

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
safety metrics like total recordable incident rates and 
lost time injury rates. We look at diversity measures 
including the number of independent directors and 
percentage of female directors, to track progress over 
time. We encourage companies to report climate-
related statistics in a way that is consistent with the 
framework provided by the Task Force on Climate-
Related Financial Disclosures (TCFD). A TCFD compliant 
carbon footprint report is generated on a quarterly basis 
for each of our underlying portfolios, and for the strategy 
overall, based on MSCI ESG data. 
Principle Adverse Impacts 
The Principal Adverse Impact (PAIs) on sustainability 
factors are part of the EU’s Sustainable Finance 
Disclosure Regulation (SFDR) to improve the 
comparability of the sustainability profile of funds and 
aim to better display the negative impacts investments 
have on various sustainability factors. While many of 
the metrics that fall under the PAIs were already being 
assessed by our team as part of our ESG assessment 
outlined above, the new framework provides a 
consistent way to meet the strategy’s obligations 
under SFDR. As part of our approach to PAIs, we 
commit to assess every active equity investment for 
relevant adverse impacts and documenting the results. 
Where adverse sustainability impacts are identified, 
we seek to engage with the company in accordance 
with the commitments made under FSI’s Responsible 
Investment and Stewardship Policy and Principles.
Proxy voting and reporting
The GLI team votes on all issues at company meetings 
where we have the authority to do so. Voting rights 
are a valuable asset and are executed with care and 
diligence. We take this responsibility seriously and 
the research we gather ensures we make informed 
decisions. If we believe that our concerns and 
performance gaps are still not being addressed, we 
may vote against the company via proxy voting. During 
the 2022 calendar year, we invested in 74 infrastructure 
companies across 7 subsectors and in 16 countries 
around the world. We voted on 1,067 resolutions, of 
which we voted against management on 131 occasions 
(12%) on issues including lack of board independence, 
poor alignment of interests and inadequate climate-
related targets. Our voting record is included for 
transparency on our website3 and in the proxy voting 
section of this report.
 
United Nations Sustainable Development  
Goals (SDGs)
Within the GLI team’s suite of products, the Responsible 
Listed Infrastructure Strategy has an additional 
mandate; namely, to invest in companies that can 
contribute to or benefit from sustainable development, 
as guided by the UN Sustainable Development Goals. 
Given its importance to any functioning modern 
economy, infrastructure has a central role to play in 
addressing global challenges that need to be overcome 
in order to deliver a sustainable future. 
Key areas that investment in infrastructure can have a 
meaningful effect on include:
•	 SDG 6 - Clean Water and Sanitation
•	 SDG 7 – Affordable and Clean Energy
•	 SDG 9 – Industry, Innovation and Infrastructure
•	 SDG 11 – Sustainable Cities and Communities
•	 SDG 12 – Responsible Production and Consumption
•	 SDG 13 – Climate Action
Each of these main categories contains several more 
specific secondary or “sub” goals that infrastructure 
investment can have a direct influence on. We monitor 
how much capital expenditure (capex) is being spent by 
each company on activities that correspond directly to 
the sub-goals of each of the six SDGs outlined above.
 
Given infrastructure’s capital intensive nature, we 
believe this represents a sensible and consistent way 
to monitor a company’s contribution to sustainable 
development. Reflecting the importance of taking a 
balanced approach, all capex is taken into account. We 
then categorise it as positive, neutral or negative.
 
For example, Italian-listed utility company and 
renewables leader Enel Group is forecast to spend 
50% of its capex on the buildout of renewable energy 
generation (such as wind farms and solar power) 
between 2023 and 20254. Over the same period, 40% 
of its capex will be spent on networks, predominantly 
distribution grids. This will help to bring clean energy to 
the end-user5.
 
3.	 FSI Proxy voting
4.	 This is directly supportive of SDG 7.2 (By 2030, increase the share of renewable energy in the global energy mix). Source: Enel Group, First Sentier Investors. Data as at 22 November 2022
5.	 This is directly supportive of SDG 9.1 (Rural access)

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
6.	 This is directly supportive of SDG 7.1 (Access to electricity), 7.2 (Share of renewable energy), 7.3 (Energy efficiency)
7.	
Source: Enel Group and First Sentier Investors. Data as at 22 November 2022.
8. 	 Capex numbers reflect forecast spending levels of current portfolio holdings over the next 12 month period. “Net capital investment” figure of 83% consists of 86% positive contribution and 	
3% negative contribution. Positive, neutral and negative labelling represents the opinion of the FSI GLI Team. SDG 6: Clean Water and Sanitation. SDG 7: Affordable and Clean Energy. SDG 
9: Industry, Innovation and Infrastructure. SDG 11: Sustainable Cities and Communities. SDG 12: Responsible Consumption and Production, SDG 13: Climate Action. “Other” represents capex 
spent in areas with a neutral effect on the SDGs. Source: First Sentier Investors and company reports. Data as at 31 March 2023. 
A further 4% of capex will be invested by the Enel X division in areas 
that support the transition to a clean economy (such as EV charging 
infrastructure and energy efficiency initiatives)6. The remaining 6% 
of the company’s capex will be spent on their energy retail business. 
We deem this capex to neither positively or negatively affect any of 
the SDG sub goals, and so assign it to the neutral category7. 
Overall, we are of the view that the current holdings of the 
Responsible Listed Infrastructure Strategy make significant 
positive contributions to SDG 7 (Affordable and Clean Energy) 
and SDG 9 (Industry, Innovation and Infrastructure). This reflects 
the portfolio’s high weighting in utility stocks. Many utilities are 
investing substantial amounts of capex both into renewable energy 
generation, such as wind and solar; and into the new or upgraded 
transmission and distribution networks that are needed to connect 
these clean energy sources with population centres where the 
demand is.
Responsible Listed Infrastructure Strategy’s capex 
supporting sustainable development8
SDG 6: Clean Water and Sanitation. 
SDG 7: Affordable and Clean Energy. 
SDG 9: Industry, Innovation and Infrastructure. 
SDG 11: Sustainable Cities and Communities. 
SDG 12: Responsible Consumption and Production, 
SDG 13: Climate Action. “Other” represents capex 
spent in areas with a neutral effect on the SDGs. 
Source: First Sentier Investors and company reports. 
Data as at 31 March 2023.

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Our climate change commitment 
Decarbonisation is happening in our asset class, particularly by utilities who are responsible for more than 90% of 
the emissions in our opportunity set. Our target reflects the developments that we are already seeing in this space 
and enables us to engage and encourage companies to make greater efforts on this front. 
The GLI team are committed to reducing greenhouse gas emissions across our investment portfolios8 consistent 
with an ambition to reach net zero emissions by 2050. This aligns with our firm-wide commitment to reduce 
greenhouse gas emissions across investment portfolios by 2050 or sooner. We recognise there is an urgent need 
to accelerate the transition towards net zero emissions and support global efforts to limit warming to 1.5 degrees. 
As a responsible and active manager of capital on behalf of our clients, we commit to the following9: 
 
•	 Build investment portfolios aligned to net zero by 2050 
•	 Pursue interim targets, by 2030, to reduce the Weighted Average Carbon intensity (WACI)10 of our investment 
portfolios to -35% (Global strategy) or -50% (Responsible strategy) below the 2019 benchmark index11
•	 Take account of portfolio Scope 1 and 2 emissions and consider material Scope 3 emissions12
•	 Prioritise the direction of capital to infrastructure companies that are aligning or on a pathway to be aligned with 
net zero
•	 Encourage the investment of this capital into real assets that reduce absolute emissions (rather than prioritising 
the use of offsets)
•	 Engage with companies to improve disclosures (e.g. GHG emissions, TCFD reporting, transition plans) and 
accelerate change (e.g. coal power closures by 203013), with a focus on those companies that produce the 
most carbon emissions
•	 Implement an escalation and voting strategy consistent with achieving net zero
•	 Provide information and analysis on net zero progress and climate risks and opportunities
•	 Collaborate with industry stakeholders (e.g. PRI14, IIGCC15, NZAM16, CA100+17) to provide a consistent and 
collective voice when engaging with companies 
The GLI team’s climate statement can be found on our website.
8.	 The team’s net zero target applies to all Global Listed Infrastructure and Responsible Listed Infrastructure pooled vehicles, and to separate client accounts that are subject to equivalent 
investment guidelines.
9.	 These commitments and targets are based on information and representations made to the relevant investment teams by portfolio companies (which may ultimately prove not be accurate), 	
together with assumptions made by the relevant investment team in relation to future matters such as government policy implementation in ESG and other climate-related areas, enhanced 	
future technology and the actions of portfolio companies (all of which are subject to change over time). As such, achievement of these commitments and targets depend on the ongoing 		
accuracy of such information and representations as well as the realisation of such future matters. Any commitments and targets set out in this material are continuously reviewed by the 	
relevant investment teams and subject to change without notice.
10.	 Intensity being a measure of carbon efficiency, and WACI measures the exposure within a portfolio to carbon-intensive assets compared to the benchmark.
11.	 2019 was selected as the base year as it represents the most recent and complete dataset which was not impacted by the pandemic.
12.	 Scope 3 includes encompasses emissions that are not produced by the company itself, and are not the result of activities from assets owned or controlled by them, but those that it’s 	
	
indirectly responsible for, up and down its value chain. Companies may currently face challenges in reporting accurate and reliable Scope 3 emissions data. Where a company is unable to 
calculate its Scope 3 emissions for some or all of the categories outlined in the GHG Protocol’s guidance, it should still identify the relevant upstream and downstream Scope 3 emission 
categories relevant to it.
13.	 As per International Energy Agency (IEA) guidelines phase out by 2030 in developed markets and 2040 in emerging markets.
14.	 United National Principles for Responsible Investment
15.	 Institutional Investors Group on Climate Change
16.	 Net Zero Asset Managers
17.	 Climate Action 100+

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Interim targets
We commit to pursuing interim targets to reduce the WACI of 
our investment portfolios by -35% for our Global Strategy and 
-50% for our Responsible strategy, by 2030 relative to the 2019 
benchmark index18. This target was developed through a detailed 
evaluation of our portfolios emissions, progress achieved to date 
and their likely achievements in the years ahead.  
The Paris Agreement calls for a -45% reduction in emissions 
by 2030 from a 2010 baseline.  It is important to recognise 
that companies have already made significant progress on this 
target.  US utilities represent more than 90% of total emissions 
in our portfolios and we estimate that from 2010 to 2019 these 
companies had already reduced emissions by -29%.  Therefore to 
deliver their fair share requires a further -23% reduction from 2019 
to 2030.  Adjusting absolute emissions to emissions intensity we 
arrive at the -35% target for our Global Strategy.
Weighted Average Carbon Intensity
2,000
Benchmark
Global
Responsible
Scope 1+2 tCO2e / $m Sales
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
1,750
1,500
1,250
1,000
750
500
250
0
18.	 Benchmark data provided by MSCI
Source: First Sentier Investors. Data as at 30 June 2023

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
A snapshot of our progress

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
19.	   Company meetings held during the 12 months to 31 December 2022
20.	   Proxy voting for the 12 months to 31 December 2022
21.	   Portfolio holdings as at 30 June 2023
22.	   Represents portfolio holdings as at 30 June 2023 for the five year period December 2017 to December 2022
23.	   Information sourced from FSI as at 31 December 2022;
24.	   Information sourced from FSI as at 31 December 2021; Firm level rankings
570
1,067
23
-35%
15
-50%
Leader
Graded 4 stars 
or above in 
7 out of 9 
categories
UN PRI
Ranking24
for GLI 
strategy
for RLI 
strategy
RIAA ranking
71%
31%
30%
12%
voted against 
management20
resolutions voted on
reduction in weighted 
average portfolio carbon 
intensity over last 5 years22
An average 30% female 
representation on our portfolio 
company boards (23% 5 years ago)23
meetings 
held
of our portfolio companies21
Net Zero 
commitments 
made by
Interim 2030 
WACI targets for 
GLI strategy: 
countries
subsectors19

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
ESG focus areas

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
During 2022, the GLI team focused on assessing ESG risk and performance in four key areas – 
energy transition, climate risk, modern slavery and corporate governance. 
Whilst we see energy transition and climate change as the biggest area for infrastructure companies 
to focus on, we also wanted to tackle human rights and modern slavery risks, and the need for good 
corporate governance. 
Energy transition
Energy transition was at the forefront of our engagement with companies. Transition risk represents 
the single largest climate-related risk for listed infrastructure companies, as the world moves away 
from fossil fuels and towards lower-carbon sources of energy. However, energy transition also 
represents a substantial opportunity. Attempts to reduce carbon emissions are having significant 
implications for the way in which electricity is generated, transmitted and distributed. 
Climate risk
Physical impact risk from climate change and global warming pose systemic risks to society and the 
global economy. It affects the availability of resources, the price and structure of the energy market, 
the vulnerability of infrastructure assets and the valuation of companies. As investors in infrastructure 
assets, we understand that climate change poses a complex problem which has already impacted, 
and will continue to impact, different assets in different ways.  We believe it is our responsibility to 
understand and mitigate these risks within our investment portfolios. 
Modern slavery
As stewards of our clients’ assets, we believe we have a responsibility to identify and act to eliminate 
human rights abuses, including, but not limited to, modern slavery. This is part of a wider societal 
responsibility that impacts the performance of our investments. Companies have legal, moral and 
commercial responsibilities to respect human rights and to manage the risks of modern slavery 
on their operations. If these responsibilities are not met, a company may face regulatory, financial, 
reputational and legal risks. 
Corporate governance 
Infrastructure companies provide essential services such as energy, transportation, water and 
telecommunications that are vital to the functioning of societies and economies. They are often large 
scale projects with significant capital expenditure requirements. Effective corporate governance 
means companies are managed with the interests of all stakeholders considered: shareholders, 
employees, customers, suppliers, the environment and the broader community. 
The following section provides insights on the trends and overall portfolio performance we have seen 
in these focus areas during 2022. We have used specific case studies to provide examples  
of companies we invested in and actively engaged with throughout the year.

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Engagement examples in this report
Name
NextEra Energy
Energy transition
Climate risk
Modern slavery
Corporate governance
Xcel Energy
PPL Corp
Transurban
Entergy
Vinci
West Japan Railway
SSE
Rubis
Aena
Utilities/Renewables
Utilities/Renewables
Utilities/Renewables
Toll Roads
Utilities/Renewables
Toll Roads
Railroads
Utilities/Renewables
Energy Midstream
Airports
United States
United States
United States
Australia NZ
United States
Europe xUK
Japan
United Kingdom
Europe xUK
Europe xUK
Collaborative engagement (Climate action 100+) 
Establish net zero emissions target
Accelerate transition towards renewables
Prioritise investment in electric vs gas utilities
Establish targets for scope 3 emissions
Bring forward closure of existing coal plants
Incorporate ESG metrics into remuneration targets
Extend renewable PPAs to all regions 
Increase investment in electric vehicle adoption
Greater transparency of scope 3 emissions
Prioritise investment in resilience spend
Balance net zero targets with mitigating climate risks 
Further investment in climate change modelling
Improve modern slavery policy and procedures
Understand response to Russia Ukraine exposure
Increase number of independent directors
Separation of Chairman and CEO duties
Increase diversity of skills and experience on the board
Incorporate climate change into forecasts
Minimise impact of wind farms on ocean and marine life 
(Biodiversity)
Strengthen approach to modern slavery risks
Accountability for supplier audits and risk assessment
Improve alignment of interests with minority shareholders
Ensure capital discipline in international expansion
19
20
22
23
25
30
36
27
31
38
Sector
Region
Primary engagement objectives
Page

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Energy transition
Transition risk represents the single largest climate-
related risk for listed infrastructure companies, as 
the world moves away from fossil fuels and towards 
lower carbon sources of energy. This transition has 
implications for freight railways, whose coal haulage 
volumes will decline materially over the next ten years. 
It will affect the energy midstream space, where oil and 
refined product pipelines could face stranded asset risk 
by 2040. While natural gas is likely to represent a key 
transition fuel, a long-term decline in demand is likely to 
begin once battery storage technology has advanced 
sufficiently. 
However, energy transition also represents a substantial 
opportunity. Attempts to reduce carbon emissions are 
having significant implications for the way in which 
electricity is generated, transmitted and distributed. 
Renewable energy is currently experiencing a virtuous 
cycle of falling costs, improving productivity and growing 
market share. In contrast, non-renewable energy is 
in a vicious cycle of declining market share, reduced 
revenues and rising costs. 
Portfolio carbon metrics
Across our portfolio companies we have seen a -13% 
reduction in absolute emissions over the last five 
years25. This reduction reflects a range of initiatives 
including: closing coal power plants and replacing with 
wind, solar and batteries, signing renewable power 
purchase agreements, reducing transmission line 
losses, capturing landfill methane and processing into 
renewable natural gas, converting vehicles from diesel 
to compressed natural gas or electric, or switching 
ventilation systems from fixed to variable speed.   
The list of initiatives and technologies continues  
to grow.
Importantly this reduction in emissions came despite 
substantial growth in the underlying businesses and 
changes in scope related to acquisitions.  As an 
indication this -13% decline in absolute emissions 
translates to -31% decline in WACI when adjusted  
by revenue.
25.	 Represents portfolio holdings as at 30 June 2023 for the five year period December 2017 to December 2022

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Absolute carbon emissions
Carbon intensity | Utilities only
Source: First Sentier Investors
Power generated by utilities represents 90% of portfolio emissions
Source: First Sentier Investors
Source: First Sentier Investors
100% portfolio coverage
Carbon intensity
Net zero pathway | Utilities only
CO2 emissions (Scope 1+2) thousand tonnes
2,500
2,000
1,500
1000
500
2017
2018
2019
2020
2021
2022
0
CO2 emissions tonnes per $USD revenue
-31% decline in WACI over 5 years
1,600
1,200
800
400
2017
2018
2019
2020
2021
2022
0
More than 90% of our portfolio’s emissions come from utilities so naturally this is where we invest the most time 
on analysis and engagement.  With the main source of emissions being power generation, utilities tend to express 
carbon intensity as a function of power produced.  This measure of carbon intensity has reduced by -28% over the 
last 5 years as utilities have switched from power generation fuelled by coal to natural gas to renewables.
This measure of carbon intensity is also useful to consider pathways towards net zero.  All of our portfolio utilities 
disclose historic carbon intensity and many provide a pathway forward.  We can also analyse information from 
integrated resource plans and plant asset lives to project the likely carbon intensity of the generation fleet over 
time.  Our portfolio utilities have already reduced carbon intensity by close to -40% from 2005 to 2020 and we 
believe they are on a path consistent with net zero by 2050.  We acknowledge that the degree of certainty in this 
regard falls materially after 2030 / 2035 given resource planning and government incentives are typically limited to 
10-15 years and networks / storage are untested with 100% renewables at scale.
Tons CO2 emissions per MWh
0.70
0.60
0.50
0.40
0.30
0.20
0.10
2017
2018
2019
2020
2021
2022
0
Tons CO2 emissions per MWh
0.70
0.60
0.50
0.40
0.30
0.20
0.10
2005
2015
2010
2025
2020
2035
2030
2045
2040
2050
0

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Source: First Sentier Investors
Commitment to energy transition
So what level of conviction do we have that these pathways to net zero will be achieved?  The chart below provides 
a snapshot of the level of disclosure and commitment to energy transition across our current portfolios:
% of portfolios
100%
80%
60%
40%
20%
TCFD Report
Science Based
Net Zero Target
Climate Comp
0
95% report against TCFD
Reporting against the recommendations of the Task 
Force on Climate-Related Financial Disclosures has 
become the global standard.  Disclosures around 
governance, strategy, risk management, metrics 
and targets should help investors understand how 
companies consider and assess climate-related risks 
and opportunities.  Companies that do not support 
TCFD disclosures are generally in emerging markets.   
A few do not formally support TCFD but do have credible 
disclosures and commitments.  For example, Flughafen 
Zurich (Zurich Airport) supports the Global Reporting 
Initiative (GRI) and Airport Carbon Accreditation (ACA) 
and has set a target for net zero without offsetting by 
2040.  We will continue to engage to achieve 100% 
support of TCFD.
71% have set a net zero target  
Most companies target net zero by 2050.  A few have 
set more aggressive targets including NextEra Energy 
by 2045 and CenterPoint Energy by 2035.  Companies 
that have not set a net zero target are generally in 
energy midstream, emerging markets or wireless 
towers.  Other sectors like railroads and waste have set 
strong interim targets but are not yet ready to commit 
to net zero.  For example, waste company Republic 
Services has set an (SBTi approved) interim target for 
-35% reduction in emissions by 2030 but does not yet 
see a pathway to 100% capture of landfill methane gas.  
We will continue to engage with these companies to 
push for a commitment to net zero.

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
37% are confirmed as science based
Adding a pathway to achieving net zero including 
interim targets is critical for transparency and 
accountability.  We will continue to engage with 
companies to align net zero pathways with science and 
seek external validation.  The Science Based Targets 
Initiative (SBTi) is widely used for validation of net zero 
pathways.  We acknowledge criticisms that it relies 
on a single scenario to achieve net zero and does not 
capture historic carbon reductions – this is important for 
US utilities given what was achieved between 2005 and 
2020.  We will also seek further disclosure of specific 
plans to achieve these outcomes, for example coal 
plant closures and renewable / storage / transmission 
projects.
42% have climate-linked compensation
Incentives drive behaviours and we believe execution 
of the pathway towards net zero is more likely to 
be successful if management are remunerated 
accordingly.  Depending on the materiality for the 
company and the responsibilities of the individual, we 
recommend 10-30% of variable remuneration is linked 
to ESG-related risks.  For an example of best practice, 
Xcel Energy has linked 100% of short-term incentives 
to ESG metrics including safety, reliability, customer, 
environment and diversity, with a 50-150% overlay for 
earnings per share relative to guidance range.  It has 
also linked 38% of long-term incentives to carbon 
reduction with 62% on relative total shareholder 
return26.
Challenges
Carbon intensity metrics can sometimes increase year 
on year due to changes such as in demand, corporate 
structure and weather impacts. Whilst longer term 
targets such as Net Zero 2050 are important, our 
immediate priority is to set medium-term expectations 
and assess company performance against those 
measures. We challenge management on where they 
expect to get to by 2025 and 2030. We need to be 
forward looking and also identify the laggards who could 
be the leaders of the future.
We recognise the challenges of addressing scope 3 
emissions. Many companies do not have the systems in 
place to track and report emissions that occur outside 
their operation but associated with their activities.  
A lack of standardised methodologies and reporting 
frameworks also makes it challenging to compare 
emissions across different companies. We will continue 
to engage with companies to raise awareness about the 
importance of Scope 3 emissions. 
Future steps
We actively encourage companies to take this issue 
seriously and report high quality data in line with TCFD 
recommendations. Across all ESG issues, we need 
sustainability reporting that has the same rigour as 
financial reporting (i.e. double materiality) and we 
are aware of our responsibility as active investors 
to encourage this from the companies we invest in. 
We will report on our progress against our net zero 
commitment at an underlying portfolio level on an 
annual basis. 
26.	 Source: Xcel Energy. Data as at 24 May 2023.

NextEra Energy has a plan to lead America’s decarbonisation efforts, leveraging  
low-cost renewables to drive affordable, clean energy for customers27. Although it is 
an industry leader in the push for reducing carbon emissions in its own operations 
and in its solutions, it was slow to set a net zero target.
Case study
Defining a net zero goal for  
a decarbonisation leader:  
NextEra Energy
2025
Renewables
and Storage
46%
Nuclear
19%
Fossil
35%
2030
Renewables
and Storage
62%
Nuclear
15%
Fossil
23%
2035
Renewables
and Storage
71%
Nuclear
12%
Fossil
17%
2040
Renewables
and Storage
80%
Nuclear
12%
Fossil
8%
2045
Renewables
and Storage
89%
Nuclear
11%
RNG
<1%
77%
83%
92%
100%
65%
A Florida-based integrated utility, NextEra Energy 
(NextEra) is the largest renewables developer and 
owner in the US28. Climate change mitigation and 
adaptation are key investment opportunities for 
this company but despite its position in leading 
the decarbonisation charge, it lacked a clear net 
zero target for its efforts. 
Taking a two-pronged approach to encourage 
NextEra to define a net zero target, our team 
individually engaged with NextEra as well as 
being part of Climate Action 100+, an investor-led 
initiative ensuring the world’s largest corporate 
greenhouse gas emitters are taking necessary
action on climate change. Our team has been 
members of the Climate Action 100+ working 
group for NextEra since 2019.  
After several years of individual and collective 
engagement, NextEra announced, in June 
2022, an ambitious goal of achieving ‘Real 
Zero’ by 2045 in its updated climate strategy29. 
The Real Zero goal sets a new benchmark for 
energy producers, making NextEra’s intent to 
eliminate all carbon emissions from its operations 
without the use of carbon offsets to achieve 
success. Pleasingly, NextEra has also set interim 
milestones every 5 years, adding visibility and 
accountability to this long-dated target.  
Projected Generation
Source: NextEra Energy – Zero Carbon Blueprint Report; 
27.	 A real plan for real zero
28.	 Source - https://energydigital.com/top10/top-10-biggest-renewable-energy-companies
29.	 NextEra Energy sets industry-leading Real Zero™ goal to eliminate carbon emissions from its operations, leverage low-cost renewables to drive energy affordability for customers

20
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Xcel Energy has made significant progress in closing legacy coal-fired assets to 
minimise its carbon footprint but could be doing more to accelerate its transition 
towards renewables. 
Case study
Minimising Xcel’s carbon 
footprint by accelerating 
renewables investments
A regulated utility with operations across 8 US states, 
Minneapolis-based Xcel Energy (Xcel) provides 
electricity and natural gas services to approximately 
3.7 million electric customers and 2.1 million natural 
gas customers30. The company is well-positioned 
to deliver steady, low-risk earnings growth by 
transitioning towards renewables. However, we felt 
there was potential to accelerate its decarbonisation 
story by maximising tax credits offered by the Inflation 
Reduction Act (IRA) to incentivise investments in 
solar, wind and energy storage. Our view was that 
Xcel should also prioritise investment in its electric 
utilities over natural gas utilities given the former has 
a rapidly declining carbon footprint.  
In October 2022, we met with the Xcel’s CEO and 
Chief Sustainability Officer in Denver, Colorado 
to discuss the decarbonisation of its electric and 
natural gas utilities. Xcel re-emphasised its ongoing 
commitment to reducing its carbon footprint – 
investing in renewable energy, closing coal-fired 
power generation and reducing its greenhouse gas 
(GHG) emissions from natural gas via renewable 
natural gas and hydrogen. It reinforced the message 
that sustainability efforts should go hand in hand 
with service reliability and customer affordability. 
Management are clearly aligned with carbon 
reduction goals. 
Executive remuneration is linked to three key targets:
1) 	 80% carbon emission reduction by 2030, 	
	
	
100% by 2050 
2) 	 Customer bills need to increase by less than 	
	
	
inflation
 
3) 	 Long term EPS (Earnings per share) and DPS 
(Dividend per share) growth of 5-7% 
Xcel is evaluating the impact of the IRA on its 
renewable energy investments and subsequent 
coal plant closures. It agrees that the economics of 
renewables has improved post the IRA. However, 
the company cautioned that its very cold service 
territories meant energy storage technology (battery 
lengths need to improve from 4-6hrs to 10-12hrs) are 
a real impediment to accelerate coal plant closures. 
Despite this challenge, there is little doubt that while 
coal closures may not be brought forward, capacity 
factors and emissions would be materially reduced.  
We continue to engage with Xcel, encouraging them 
to accelerate the closure of their existing coal plants 
and strengthen their decarbonisation targets.  
We would like to see them implement interim targets 
for Scope 3 emissions to increase accountability and 
ensure a more accurate assessment of their carbon 
footprint.
30.	 Corporate profile

21
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
31.	 *Tolk coal plant closure in 2028 pending approval by TX and NM commissions, currently 2032
Xcel Energy is an example of a US Utility sector that we think can improve and 
accelerate their decarbonisation story. This is likely to come through the early 
retirement of coal-fired generation assets and increased investment in renewables 
such as wind and solar, leading to an earnings and multiple re-rating. 
“
“
8,000
6,000
4,000
2,000
2006
2025f
2021
2030f
0
80%
60%
40%
20%
0
Xcel coal plant closures (MW)
Source: Xcel Energy, First Sentier Investors31
High Bridge
Riverside
Cameo
Cherokee
Arapahoe
Black Dog
Bay Front
Valmont
Comanche
Sherco
Harrington
Craig
Sherco
Pawnee
Hayden
Craig
King
Comanche
Tolk*

Engaging with management helped to deepen insights about PPL Corporation’s 
challenges regarding ESG metrics, uncovering opportunities to provide 
guidance on issues.  
Case study
Constructive conversations 
with PPL Corp’s management 
After selling its UK assets in 2021, PPL 
Corporation (PPL) became a US-only fully 
regulated utility. Headquartered in Pennsylvania, 
its main assets include two integrated regulated 
electric and gas utilities in Kentucky, a regulated 
electric transmission and distribution utility in 
Pennsylvania and a recently acquired regulated 
electric and gas transmission and distribution 
utility in Rhode Island. 
PPL’s energy transition has lagged industry 
peers. It has long time horizons for retiring its coal 
assets, with coal plants running well into 2030. 
For example, its Trimble County Plant in Kentucky 
is not scheduled for retirement until 2060. 
Similarly, it has not provided clarity on how ESG 
metrics are integrated into its long-term incentive 
(LTIP) remuneration plans.
We raised these issues in a meeting with PPL’s 
independent Chairman, Chief Executive Officer, 
Chief Sustainability Officer, General Counsel 
and Investor Relations Director, encouraging 
management to bring forward the closure date  
for its coal assets and boost investment in 
cleaner energy. 
In this engagement, PPL acknowledged that 
improvements could be made in reducing carbon 
intensity in its coal portfolio and were open to 
our suggestion that there were opportunities to 
incorporate broader reductions in carbon intensity 
measures in its LTIP plans. We were  
able to provide guidance on an approach that PPL 
could consider, suggesting that management 
could implement a rolling 3-year carbon intensity 
approach. We also deepened our understanding 
of how the board thought about incorporating 
ESG metrics to the management team’s long-
term incentives, asking questions that helped 
broaden their thinking about components to be 
factored in, like vehicle emissions and electricity 
consumption at facilities.
Encouragingly, in December 2022, PPL 
announced a plan outlining its intent to replace 
1,500MW of aging coal-fired generation, or nearly 
one-third of Kentucky’s coal fleet by 202832.  
The plan includes adding two new combined-
cycle natural gas plants, nearly 1,000MW of solar 
generation, 125MW of battery storage and more 
than a dozen new energy efficiency programs.  
We feel we were part of a broader push for action 
in this area.
The conversation is by no means over and we 
continue to engage with PPL on accelerating 
the closure of their existing coal plants and 
strengthen their decarbonisation targets in line 
with the evolving climate science, technology, 
policy and community needs. 
32.	  PPL Corporation’s Kentucky utilities file plan to replace 1,500 megawatts of aging generation by 2028

Transurban is making progress in reducing emissions but we felt they could go 
further by signing renewable power purchase agreements across their entire 
network.
Case study
Room for improvement for  
an industry leader: Transurban 
Transurban (TCL) is one of the world’s largest toll 
road operators, building and managing urban 
motorways in Australia and North America.  
We believe it is one of the best businesses 
of its kind, with a strong management team, 
independent board and attractive tolling 
agreements. TCL’s Sustainability Strategy is 
aligned with the UN Sustainable Development 
Goals and they are targeting a 50% reduction  
in absolute emissions by 203033. Despite the 
good progress in reducing emissions we felt TCL 
could go further. 
We identified 3 opportunities where TCL could 
make improvements:  
•	 Extending renewable power purchase 
agreements (PPA) to all regions
•	 Contributing to reducing customer emissions 
by supporting electric vehicle (EV) adoption
•	 Encouraging greater transparency and 
disclosure of scope 3 emissions
We engaged with TCL’s Chairman and 
management, including its CEO, CFO and Head 
of Sustainability to discuss what could be done 
to refresh existing initiatives and what might be 
introduced. 
Scope 1 & 2 emissions
95% of TCL’s emissions are derived from the 
purchase of electricity. The company has recently 
extended PPAs from Sydney to Melbourne 
and Brisbane, which is expected to contribute 
to -65% reduction in GHG emissions when 
operational in FY23. Renewable PPAs have only 
been signed for 80% of electricity demand as 
TCL expects a 10% improvement in their own 
energy efficiency and 10% improvement in 
carbon intensity power from the grid.  
We encouraged management to extend PPAs 
across their entire portfolio including North 
America.
Scope 3 emissions
TCL is targeting a 55% reduction in emissions 
intensity for major projects and 22% for 
purchased goods and services. Lowering the 
content of portfolio cement in the WestConnex34 
tunnels reduced embodied emissions by around 
50%. It was also able to divert 90% of major 
project waste and 60% of operational waste  
from landfill.
EV charging
TCL is investigating the installation of EV charging 
infrastructure along its toll roads in Australia. 
These are likely to be off-motorway as entry-
exit ramps are complicated. We encouraged 
TCL to increase the development of charging 
infrastructure and sent them best-practice 
examples from Europe including Eiffage and 
Fastned.
Sustainable driving initiatives
TCL is introducing sustainable driving initiatives 
including awareness campaigns to highlight 
the environmental benefits of using toll roads. 
TCL estimates 27-30% reduction in emissions 
vs alternative routes which are more likely to 
experience impacts from traffic lights, congestion 
and accidents. Other initiatives include driver 
education programs with an estimated 5-6% 
reduction in fuel emissions from smoother  
driving styles.
33.	  Towards net-zero emissions
34.	  Westconnex is a 33km predominantly underground motorway in Sydney, Australia

24
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Climate risk
Climate change and global warming are increasing 
the frequency and unpredictability of extreme weather 
events like droughts, fires and floods, which pose 
systemic risks to society and the global economy.  It 
impacts the availability of resources, the price and 
structure of the energy market, the vulnerability of 
infrastructure assets and the valuation of companies. 
As investors in infrastructure assets, we understand 
that climate change poses a complex problem, which 
has already impacted, and will continue to impact, 
different assets in different ways.  We believe it is our 
responsibility to understand and mitigate these risks 
within our investment portfolios.
Examples of climate risk for infrastructure assets 
include: 
•	 Extreme weather events including hurricanes, storm 
surges, floods and high wind events 
•	 Droughts and the impact this has on water resources 
•	 Increased risk of wildfires causing damage to utility 
electricity transmission networks
•	 Rising sea levels causing damage to coastal 
infrastructure assets.
Climate change-related criteria are incorporated 
into the quality scores that are assigned to each 
company that we research and analyse. Our quality 
scores consider factors including operational risks 
and the impact extreme weather events may have 
on a company’s cash flows or licence to operate. We 
conduct regular meetings with senior management and 
other stakeholders including suppliers, competitors, 
regulators and industry bodies. Given the investment 
experience across the team, we understand companies 
and markets intimately and believe we are best 
positioned to form a view on the companies’ approach 
to climate change and the materiality of climate 
change-related risks and opportunities.
Our engagements on climate risk align with the four 
pillars of the TCFD disclosures: governance, strategy, 
risk management, and metrics and targets. 
Challenges
We recognise that climate change is a long-term 
challenge and that its impacts unfold over extended 
periods. This requires a shift in mindset and the 
adoption of new tools and methodologies to 
understand its impact over time. Climate change is 
also characterised by significant uncertainty, making 
it challenging to quantify and model risks accurately. 
Data reliability and availability are an ongoing challenge; 
however company disclosure is improving with the 
introduction of mandatory climate disclosure across 
many of the jurisdictions we invest in. 
Future steps
Whilst TCFD reporting is still not mandatory in many 
countries, we actively encourage companies to take this 
issue seriously and to report high quality data in line with 
TCFD recommendations. We believe better data will 
allow for the implementation of more consistent climate 
metrics and targets, and allow for greater transparency 
on investors climate performance.

Despite its 2050 net zero target and the intent to replace its coal capacity with 
renewables by 2030, Entergy Corporation is racing to ensure resilience of its assets 
that are most vulnerable to unpredictable and severe weather events. 
Case study
The race towards resilience in  
the face of severe weather events: 
Entergy Corporation
Entergy Corporation (Entergy) is a US-regulated 
electric and gas utility serving 3 million customers 
across Arkansas, Louisiana, Mississippi and 
Texas. The majority of its assets are located in 
southern US states that have been subject to 
severe hurricanes, thunderstorms and tornadoes.  
Climate change can make these events more 
intense and frequent, destroying infrastructure, 
disrupting services, and requiring costly repairs 
and reconstruction. 
In 2021, extreme weather events resulted in 
over US$2.7bn in damage to Entergy assets. 
Concerned with the resilience of their assets, we 
had in-person and virtual meetings with Entergy 
throughout 2022 to better understand how they 
were safeguarding their assets, their expectations 
for regulatory cost recovery and the extent to 
which climate change modelling could assist 
them with system hardening plans. 
Adaptation, Hardening and Resilience (AHR) as drivers of US utility T&D investment
AHR: Hardening & Resilience
DISTRIBUTION CAPEX
TRANSMISSION CAPEX
AHR: Advanced Technology
Expansion
Replacement
Other
26%
12%
27%
30%
6%
27%
7%
29%
34%
4%
Individual numbers may not total 100% due to rounding.
AHR: Adaptation, Hardening & Resilience. T&D: Transmission & Distribution. 
Source: EEI Financial Analysis and Business Analytics, EEI member company survey, First Sentier Investors. Data based on EEI Business Analytics 2022 surveys.

26
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
To mitigate climate change risks, Entergy is 
investing US$15 billion in resilience initiatives. 
These initiatives include investments toward 
generation portfolio upgrades and renewable 
generation, undergrounding of the grid network, 
and robust emergency and incident response 
planning to prevent and mitigate system damage 
from climate events, laying the foundation for 
newer technologies such as energy storage. 
Ultimately, these investments will support Entergy 
in providing customers with improved reliability, 
efficiency and resilience. 
                                                                                                         
Complementing these initiatives is investment 
in restoration projects to enhance biodiversity 
and local ecosystems in the communities 
surrounding its operations. For example, wetlands 
play a crucial role in storm protection for Entergy’s 
assets while also contributing to economic 
prosperity for many of its communities. 
Entergy’s proactive approach to rebuilding its grid 
system to recover costs following the weather 
events of 2021 have been highly supported by 
the regulators, highlighting the company’s good 
governance and a genuine commitment to fair 
service delivery for communities. 
The business sets a high bar for balancing 
its net zero targets with mitigating climate 
risks, making it a leader among US utilities in 
the transition to a net zero future. We see an 
increase in the company’s investment in less-
vulnerable underground grid networks and further 
investment in climate change modelling as 
important future steps.
Case study continued...

27
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
In the push for developing renewable energy sources, businesses will also need  
to consider broader environmental impacts. 
Case study
Considering the impact of 
renewables development on 
nature and biodiversity: SSE
SSE is a regulated electric and gas utility based in 
the UK with a growing book of renewable assets. 
It is one of the largest developers of offshore wind 
in the world, including the development of the 
world’s largest offshore wind energy project, the 
3.6GW Dogger Bank Wind Farm off the east coast 
of Yorkshire, England.
Given SSE’s extensive development program, 
both terrestrial (land-based) and marine, we 
wanted to better understand how the company 
is minimising the environmental impact of its 
construction work and, where possible, seeking to 
leave these areas enhanced.  We also discussed 
ways in which we, as investors, can monitor these 
impacts.  
What became clear is that quantifying biodiversity 
net gain at the corporate level (in effect – 
aggregating unique, local projects with a range 
of different environmental considerations into a 
single overall figure) is challenging. For example, 
in one zone the key consideration was gannets (a 
large seabird); in another, it was a golden eagle. 
Projects further out to sea are even more 
complicated. Companies including SSE are 
finding innovative ways to minimise disturbance 
to marine life, for example by finding ways 
to reduce the noise impact of laying the 
foundations for offshore wind farms, or changing 
configurations to minimise disruption to the flow 
of fish.   
Given this complexity, SSE’s response has to 
be tailored to the demands presented by each 
specific terrestrial or marine zone. Some changes 
that have been made include adjusting the tip 
height of a wind farm’s turbines to below the 
height of avian flight paths; creating “no fishing” 
zones for fishermen; and finding ways to increase 
certain types of habitat.
We were encouraged by the release of SSE’s 
latest biodiversity report in November 2022, 
which seeks to assess its impact on nature and 
biodiversity, and will continue to have two-way 
dialogue with company management about ways 
that SSE can further reduce its impact on the 
environment, and improve its disclosure on this 
topic.

28
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Modern slavery
At FSI, we understand we must do all that we can to 
ensure our investment decisions, operations and supply 
chains do not contribute to the risk of modern slavery. 
The GLI team is dedicated to enhancing our systems 
and processes to combat various forms of slavery 
and human trafficking, including forced labour, child 
labour, domestic servitude, and workplace abuse. We 
acknowledge that suppliers employing lower wage staff 
may pose higher risks, and we encourage companies 
to thoroughly map out both their direct and indirect 
suppliers.
In 2020, FSI formed a modern slavery working group, 
led by the FSI Responsible Investment team. The 
group aimed to enhance our efforts in human rights by 
integrating risk identification and governance into our 
processes. As part of their work, they developed and 
published the Modern Slavery Toolkit. 
The toolkit sets out the steps that investment teams 
take at both pre- and post-investment stages:  
1.	 Risk identification: Utilising various data sources and 
considering factors like complex supply chains to 
identify potential risks.
2.	 Risk mitigation: Providing guidelines and sample 
questions for engaging with companies at risk of 
modern slavery. It also highlights other forms of 
leverage, such as policy advocacy and partnerships.
3.	 Escalation: Outlining actions for escalating, 
remediation, and ongoing monitoring of any 
identified instances of modern slavery.
4.	 Internal governance: Describing the internal 
governance framework in place to monitor modern 
slavery risks and the effectiveness of our approach.
5.	 Reporting: provides a reporting template for 
investment teams to be completed each year.
The GLI team assessed the risk of modern slavery 
in our focus list, considering sectors, geographies, 
and companies. External data sources, including the 
Transparency International Corruption Perceptions 
Index, helped identify countries associated with modern 
slavery risks. Each company in our focus list was ranked 
based on the vulnerability index of the countries where 
they operate. Our engagement efforts are prioritised 
towards companies with higher exposure in countries 
ranked higher on the index. Two company engagement 
examples on this important ESG issue are described 
below.
Challenges
Infrastructure companies have complex supply 
chains that involve procuring materials, equipment, 
and services from various suppliers. Companies 
may not be fully transparent about their supply chain 
practises, making it challenging to obtain reliable and 
comprehensive information. These risks tend to be 
higher in developing markets such as parts of Asia and 
Latin America, hence our focus on companies operating 
in these markets.

29
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Modern slavery laws and regulations vary across 
jurisdictions, creating a lack of consistent global 
framework for assessing these risks. The UK and 
Australia have existing modern slavery legislation, 
Canada is in the process of enacting a Modern Slavery 
Act, and Japan is developing guidelines on Human 
Rights Due Diligence. To improve data quality, it will be 
crucial to translate qualitative social objectives, such as 
modern slavery, into quantitative indicators.
Future steps
We will continue to engage with our focus list 
companies to promote the mapping of their complete 
supply chain, including direct and indirect suppliers. 
In our discussions, we intend to focus on remedies 
and preventive measures to address the challenges 
mentioned earlier. As we gather more data, case 
studies, and best practices, we will contribute to 
updating FSI’s Modern Slavery Toolkit, ensuring 
continuous improvement in our investment approach.
The International Labour Organization35 has estimated 
that there are nearly 50 million victims of modern slavery, 
including crimes such as forced labour, debt bondage, 
human trafficking, child labour and forced marriage.  
It means there are 5 victims of modern slavery for every 
1,000 people in the world today. And sadly, one in four 
victims of modern slavery are children. 
Modern slavery is a complex and multi-faceted issue. 
There is no gold standard for identifying and addressing 
the risks associated with modern slavery and how it is 
addressed varies between markets and industries. 
Generally, we expect leaders to have mapped out their 
supply chains and to work on building relationships with 
their suppliers, to have a sense of where the key risks lie 
and to have robust training and remediation measures  
in place. We see red flags in instances where companies 
assert that there is no issue, that the issue has been 
resolved, no remediation processes are in place and  
if no examples or case studies of issues identified and 
addressed can be provided. 
Addressing the sheer scale of modern slavery
35.	  International Labour Organization, “Forced Labour, modern slavery and human trafficking”

Vinci supports workers in the face of armed conflict and starts tackling modern 
slavery risks with a move to partner with a union federation. 
Case study
Vinci: Heightened modern slavery 
risks in construction sector
Vinci is one of the world’s largest investors in 
transport infrastructure. Significant concession 
assets include 4,400km of toll roads in France 
and 45 airports across 12 countries. With a 
workforce of over 220,000 people, it operates 
in 120 countries, including France, the UK, 
Germany, and the Middle East. While its 
concession businesses contribute most of the 
operating profit, Vinci also operates a substantial 
contracting business, providing engineering and 
construction services, particularly in emerging 
markets.
Following the escalation of the conflict between 
Russia and Ukraine in February 2022, Vinci 
needed to assess its position concerning 
construction activities and toll road assets in 
the region. To understand Vinci’s exposure to 
the Russia-Ukraine conflict and to inquire about 
its modern slavery policy and procedures, we 
promptly arranged a call with the company’s 
corporate social responsibility (CSR) team.
Russia Ukraine
Vinci’s priority was ensuring the safety of its 
workers in Russia and Ukraine. Despite the 
conflict, around 1,000 employees chose to 
remain, primarily Russian nationals. Additionally, 
numerous Ukrainian employees in Poland left 
their jobs to return to Ukraine and join the war 
effort. Vinci promptly helped employees affected 
by the unfolding refugee crisis in neighbouring 
countries.
Vinci confirmed that its direct exposure to Russia 
in its construction and concession business 
was limited. In 2021, the company generated 
approximately €30 million from this market, 
accounting for around 0.2% of total revenue. 
Vinci also holds an equity stake in the Moscow 
St Petersburg motorway, which does not 
significantly contribute to its net income. As of 
December 2022, Vinci had not decided whether 
to divest this asset and continues to own it.  
Modern slavery
In recent years, we have extensively engaged 
with Vinci regarding the issue of modern slavery, 
considering the company’s construction business 
and its exposure to emerging markets, which 
increase the risks associated with this problem.
The scrutiny was particularly focused on Qatar 
due to infrastructure development for the 2022 
Football World Cup, where Vinci and its Qatar 
subsidiary QDVC faced investigations for alleged 
“forced labour, servitude, and concealment.” Vinci 
employs around 6,000 migrant workers through 
its Qatar subsidiary and various subcontractors. 
The company denied the accusations, asserting 
that it provides migrant workers with suitable 
working conditions.
After several years of constructive dialogue, Vinci 
signed a framework on worker’s rights, including 
fair recruitment, making it the first agreement of 
its kind in Qatar between a union federation and a 
Qatari company.
Vinci is also taking steps to prevent workers’ 
rights abuses among its labour suppliers and 
subcontractors by conducting labour rights 
audits. These audits involve anonymous 
worker interviews, examination of employment 
processes (such as recruitment fees, passports, 
contracts, wages, health insurance, and grievance 
mechanisms), and the implementation of 
improvement plans. COVID-19 restrictions initially 
affected Vinci’s ability to conduct these internal 
audits, but as travel rules eased, they resumed 
the assessments.

Companies with large global footprints like Rubis are inherently more exposed 
to modern slavery risks given their large contract workforce and complex supply 
chains. 
Case study
Bringing modern slavery risks 
to the fore with Rubis
Rubis is a French international company 
specialising in the storage, distribution and sale 
of petroleum, liquefied petroleum gas (LPG), food 
and chemical products. In 2022, Rubis acquired 
an 80% stake in Photosol SA, a French solar 
project developer and power producer. This 
investment aimed to expedite Rubis’ transition 
to renewable energies and decarbonisation. 
Considering Rubis’ presence in 40 countries 
across Europe, Africa, and the Caribbean, we 
emphasised the importance of addressing 
potential modern slavery risks in its operations.
In 2022, we had a number of engagement 
meetings with Rubis, including one focused 
on modern slavery and supply chain risks. 
Following this session, we sent a formal letter to 
management, outlining our inquiries regarding the 
company’s identification of modern slavery risks, 
existing policies, and processes for addressing 
instances of modern slavery.
We sought clarification on specific issues such 
as: 
•	 Recruitment practices, particularly if workers 
are hired through agents, and the measures in 
place to ensure labour outsourcing companies 
do not retain workers’ passports or charge 
them recruitment fees or related costs.
•	 The concentration of migrant workers or 
minorities in Rubis’ supply chain.
•	 Accountability for supplier audits within the 
organisation, including the frequency of these 
audits. We also inquired about the steps taken 
to ensure auditor independence and coverage 
of key risks in their assessments.
Rubis conducted risk analysis to identify and 
address potential areas of concern, including 
modern slavery risks. However, no major risks 
or instances of modern slavery were identified, 
particularly in the employment of migrant workers 
within its supply chain.
The company is committed to respecting 
human rights, as stated in its Code of Ethics. 
Training and compliance with the Code of 
Ethics are mandatory for all employees, and 
reporting instances of potential noncompliance 
is encouraged through the confidential Rubis 
Integrity Line, available 24/7. Contracts in less 
developed markets, such as the Caribbean 
and Africa, are progressively including specific 
clauses related to modern slavery, reinforcing 
compliance with local regulations, International 
Labour Organization (ILO) core conventions, and 
Rubis’ Code of Ethics.
Recruitment agencies used by Rubis are strictly 
monitored and limited to shipping activities. 
Seafarers operating Rubis-owned vessels are 
required to sign declarations confirming they 
have not paid any fees to recruitment agencies. 
For time-chartered vessels, Rubis ensures that 
shipowners take actions to prevent modern 
slavery, including staff training, enhanced scrutiny 
on manning services, and adherence to ILO 
Maritime Labour Convention vetting standards.
Given the potential higher modern slavery risks 
in less developed markets, ongoing engagement 
with Rubis on this issue and monitoring for policy 
breaches or identified risks remains important.

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First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Corporate governance
Effective governance and board oversight is critical for 
translating sustainable targets to outcomes. We look 
at factors including director independence, board size, 
gender diversity and relevant skills and experience when 
assessing governance standards. 
We also look to ensure that the board of directors meets 
regularly, retains control over the business and is clear in 
the division of its responsibilities, as well as maintaining 
a system of risk management. Alignment of interest 
is important because it ensures that decision making 
processes are focussed on maximising shareholder 
value whilst also promoting accountability, risk 
management and long term sustainability.

A board that truly adds value is one with a balanced team 
of high-performing individuals that have complementary 
skill sets and a culture that allows them to work together 
to make the most effective decisions for the organisation. 
Whilst leadership from the chair is crucial, it is the 
participation of every board member that contributes to 
the overall effectiveness of a board.
We believe a good listed infrastructure company board 
has the following characteristics: 
•	 Board size of between 8-10 directors, with the significant 
majority independent
•	 Diversity by gender (at least 30% female 
representation), age and race
•	 Separation of Chairman and CEO duties, with the Chair 
being independent*
•	 Balance of skills and relevant experience, such as 
industry, finance, regulation, technology, customer, and 
local knowledge. Sustainability and climate change is  
a skillset of increased importance 
•	 Regular board refreshment and clear succession 
planning. 
Good boards set the strategy, appoint the Executive and 
oversee the execution of that strategy. They delegate 
effectively, have honest conversations with management 
and are committed to the organisation particularly when it 
comes to problem solving. We also observe the growing 
importance and pressure for Boards to also focus on 
sustainable, socially responsible and environmentally 
aware business practises. 
*We acknowledge that a joint Chairman/CEO can also 
bring alignment if there is a clear strategy and direction 
with ‘skin in the game’. We have seen some successful 
founder-led examples.  
What makes a good board?

34
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
In 2022, we focused on two key corporate governance areas: board independence and gender diversity. 
Board independence
Over the past five years, we believe that board independence has consistently remained robust across our 
portfolios. This reflects the emphasis on developed markets within our portfolio. Notably, infrastructure companies 
in the United States, Canada, and Australia have set a benchmark for best practices, with typically 80-90% of 
directors being independent. Japan remains a laggard but there has been a noticeable improvement in recent 
years, driven by reforms aimed at enhancing corporate governance and attracting foreign investment. We are 
committed to fostering further progress in this area and will actively encourage companies to prioritise board 
independence.
Gender diversity
For several years, we have been diligently evaluating companies based on their board gender diversity. This 
is due to the fact that gender balance is typically disclosed publicly and forms an integral part of a company’s 
assessment of its social and governance performance. We firmly believe that a diverse board and leadership 
team, encompassing a wide range of thoughts, experiences, and perspectives, fosters more comprehensive 
and informed decision-making processes. Furthermore, diverse companies tend to be more adept at effectively 
managing risks. We believe by having a diverse workplace and leadership team, potential risks that might be 
overlooked in a less diverse environment can be identified and addressed proactively. 
In recent years, there has been a steady improvement in the percentage of women on boards at the portfolio 
level, with the figure reaching 31% by the end of the year in 2022. Notably, the United Kingdom has emerged as a 
leader in gender diversity, achieving a 50% representation for utilities companies SSE, Pennon, and Severn Trent. 
The UK Financial Conduct Authority (FCA) took a significant step forward in April 2022 by introducing new rules 
that mandate listed companies to report information and disclose their progress towards targets in terms of the 
representation of women and ethnic minorities on their boards and executive management teams. This move 
signifies a commitment towards promoting diversity and inclusivity in corporate leadership.
Board independence
Portfolio holdings as at 30 June 2023
Focus list ~140 listed infrastructure companies
Board independence
% Independent Directors
100
90
80
70
60
50
40
30
20
10
2017
2018
2019
2020
2021
2022
0
100
80
60
40
20
2017
Canada
United Kingdom
Asia xJP
Australia NZ
Europe xUK
Japan
United States
Latin America
2018
2019
2020
2021
2022
0
Source: First Sentier Investors
Source: First Sentier Investors

35
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
At a firm level, we continue to be involved in industry collaborations designed to boost gender diversity on boards 
(Australian Institute of Company Director’s 30% Club) and senior management (40:40 Vision). We are also 
committed to bringing more women into our own investment teams and continue to work towards our commitment 
to have women comprise at least 40% of investment management staff by 2033 (currently 30% for the GLI team).
Challenges
We tend to be cautious when investing in emerging markets, where poorer corporate governance can impact 
investor confidence. Many infrastructure companies in emerging markets are controlled by  
a single or group of dominant shareholders, often family-owned or connected to the government.  
This concentration of power can lead to conflicts of interest, abuse of power, and inadequate checks and balances, 
resulting in poor governance outcomes. Emerging markets often have less stable political environments and 
weaker regulatory frameworks compared to developed countries. Frequent changes in government policies, 
regulations, and laws can create uncertainty and increase the risk of investing in infrastructure projects. 
Future steps
We continue to actively engage with companies to promote good governance practices. Active ownership 
encourages companies to be more accountable, transparent, and responsive to shareholder concerns. By voting 
on important governance matters, such as board composition, executive remuneration and shareholder rights, we 
can support changes that enhance governance standards and align company practices with shareholder interests.
Diversity
Portfolio holdings as at 30 June 2023
Focus list ~140 listed infrastructure companies
Diversity
% women on board
40
35
30
25
20
15
10
5
2017
2018
2019
2020
2021
2022
0
50
40
30
20
10
2017
Canada
United Kingdom
Asia xJP
Australia NZ
Europe xUK
Japan
United States
Latin America
2018
2019
2020
2021
2022
0
Source: First Sentier Investors
Source: First Sentier Investors

Japanese companies have a poor history 
when it comes to best practice board 
compositions especially when it comes 
to gender diversity, which will see greater 
shareholder scrutiny. 
Case study
Challenging the board 
composition at JR West 
West Japan Railway (JR West) is a major railway 
company in Japan with a passenger rail network 
covering the Kansai region, including Osaka and Kyoto. 
It is the owner and operator of the Shinkansen or 
‘bullet train’ service. Despite owning a technologically 
advanced rail network, JR West’s board composition 
does not align with global best practices. 
In 2022, JR West’s board encompassed 17 directors, 
with 47% independent members and only 12% 
female representation. This does not align with the 
characteristics that we feel comprise a good listed 
infrastructure board. 
We have raised corporate governance concerns with 
the Japanese railway companies for many years. In 
2022, we cast proxy votes against JR West on the 
issues of board size, board independence and lack of 
gender diversity at senior management and board level. 
JR West also lacked regular board refreshment and 
clear succession planning. 
There are several areas we have been concerned with:  
•	 Although Chairman and CEO duties are separated, 
the majority of directors are also executives of the 
company, raising questions for us around how 
shareholder interests are represented at the board 
level
•	 There appears to us to be little diversity of skills and 
experience on the board with the majority of board 
members having largely similar skill sets.  
We would have liked to see the company expand 
its skillset into adjacent areas such as technology, 
innovation, digital and customer.

Japanese companies have a 
poor history when it comes to 
gender diversity at both the senior 
management and board level.  
It is not uncommon for us to meet 
with companies in Japan and 
find them with little to no female 
representation in leadership roles. 
The World Economic Forum’s Global 
Gender Gap Report 202336 ranked 
Japan 125th out of 146 countries 
in terms of gender parity, down 
45 places compared to its 2006 
ranking. The result is that men still 
dominate business and political 
leadership in Japan. 
In 2022, we sold our position in JR West 
following a period of outperformance.  
At the same time, the stock was moving 
towards the bottom of our value and 
quality process, with low scores for a 
number of quality measures including 
board, governance and alignment of 
interests. This made it harder to own 
the stock as it moved closer to our price 
target. Typically, as soon as value is 
realised in a lower quality stock, we  
sell out. 
We may have been a longer-term holder 
if JR West were able to address some 
of these key ESG issues. We continue 
to engage with Japanese companies 
to encourage them to increase board 
independence, improve diversity 
and provide more transparency and 
comprehensive reporting on their 
governance practices.  
36.	  World Economic Forum Global Gender Gap Report 2023

Since becoming a listed company, Aena’s 
new minority shareholders have an 
opportunity to seek alignment on key issues. 
Case study
Opportunities to align 
with shareholders: Aena
In 2015, Spanish airport operator, Aena, transitioned from 
a government entity to a listed company with majority 
51% government ownership. This evolution has provided 
opportunities to engage with Aena to seek improvements in the 
alignment of the company with new minority shareholders.
After identifying three capital management and alignment 
concerns, we sent a letter to Aena addressing the following 
areas: dividend policy, real estate investment, and capital 
discipline in international expansion. In July 2022, we engaged 
with Aena’s management in a call to discuss these issues. The 
outcomes of this discussion are summarised below.
Dividend policy
The COVID-19 pandemic affected the Spanish aviation sector 
in 2020 and 2021, reducing flight activity. Aena, the airport 
operator, faced additional challenges due to government 
legislation providing rent relief to tenants, resulting in lower 
rent for Aena than what was originally agreed. The accounting 
treatment of this rent relief had an adverse impact on the 
company’s net profit for 2022 without affecting the free cash 
flow generation in the period.
We communicated to Aena that the government’s intervention 
should not harm shareholder dividends and urged the company 
to adjust dividend calculations accordingly. Aena responded 
positively and announced in November 2022 that it would 
adjust the dividend to account for the impact of the rent relief. 
This unexpected increase in dividend pleased the market and 
resulted in a positive response from investors, highlighting the 
benefits of engagement in improving investment outcomes for 
our clients.

Real estate investment
We believe the market significantly undervalues the 
potential of Aena’s over 300 hectares in developable 
land. We recommended accelerating development 
and forming joint ventures with real estate partners. 
Additionally, we emphasised the importance of improved 
disclosure to inform the market about the value of these 
assets.
During the company’s strategy day in November 2022, 
Aena showcased a more detailed and comprehensive 
plan for these investments. This increased transparency 
allowed the market to better understand the untapped 
value of the real estate land bank.
International expansion
As a highly cash flow generative business with extensive 
expertise in the development and operation of airports, 
Aena has sought to expand their footprint to other 
markets via acquisitions in both the UK and Brazil. While 
we see potential in these activities, we caution that 
these auctions have become highly competitive, with a 
significant influx of capital into the sector. We advised 
Aena to maintain investment discipline to protect 
shareholder capital.
In August 2022, Aena acquired airports in Brazil through 
a public tender. We believe the purchase price was high, 
and there are significant challenges in executing the 
required capital investments included in the concession. 
We remain cautious about Aena’s overseas investments.
In our future engagements, we will concentrate on 
executive remuneration at Aena. We will seek to 
recommend aligning executive pay and structures 
with industry standards, including the introduction of 
share-based incentives. This change would enhance 
management-shareholder alignment and mitigate the 
risk of value-detracting foreign acquisitions.

Proxy voting
The GLI team exercises voting rights on all issues 
where it has the authority to do so. Voting rights are 
crucial for upholding corporate governance, risk 
management and protecting investor interests. 
We believe voting rights are a valuable asset, 
which should be managed with the same care and 
diligence as any other asset. 
Engaging with a company provides an opportunity 
to gather information and insights directly from 
company management. Through meetings with the 
company we are able to understand the company’s 
strategy and gain a deeper understanding of its 
governance practises. It enables us to evaluate 
shareholder proposals, board nominations, 
executive compensation plans and other matters 
put to a vote.
While we seek recommendations from independent 
research providers, we maintain full control over 
our voting decisions. If we plan to vote against 
a proposal, we may engage with the company 
beforehand for consultation, with a view to achieving 
a satisfactory solution. If concerns persist, we 
escalate the issue to the board. Ultimately, 
divestment is considered if there is no willingness 
to change or address the issue.
Our team maintains records when we vote against 
management or against the recommendations of 
our proxy voting advisor, Glass Lewis. Our proxy 
voting record, at a strategy level, is available on the 
First Sentier Investors website.

41
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
Proxy voting over 2022
During the 2022 calendar year, we invested in 74 infrastructure companies across 7 subsectors and in 16 countries 
around the world. We voted on 1,067 proposals, of which we voted against management on 131 occasions on 
issues including lack of board independence, poor alignment of interests and inadequate climate-related targets.
5%
10%
15%
20%
25%
35%
40%
45%
30%
50%
46%
Board related
Audit/Financials
Compensation
Capital management
Other
25%
11%
11%
7%
0%
Breakdown of votes against management
Source: Glass Lewis for the 12 months to 31 December 2022

42
First Sentier Investors  |  Global Listed Infrastructure 2022 Sustainability Report
This material is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation 
or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio 
management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should consider, with the 
assistance of a financial advisor, your individual investment needs, objectives and financial situation. We have taken reasonable care to ensure that this material is accurate, current, and complete 
and fit for its intended purpose and audience as at the date of publication. To the extent this material contains any measurements or data related to environmental, social and governance (ESG) 
factors, these measurements or data are estimates based on information sourced by the relevant investment team from third parties including portfolio companies and such information may 
ultimately prove to be inaccurate. No assurance is given or liability accepted regarding the accuracy, validity or completeness of this material and we do not undertake to update it in future if 
circumstances change. To the extent this material contains any expression of opinion or forward-looking statements, such opinions and statements are based on assumptions, matters and 
sources believed to be true and reliable at the time of publication only. This material reflects the views of the individual writers only. Those views may change, may not prove to be valid and may 
not reflect the views of everyone at First Sentier Investors. To the extent this material contains any ESG related commitments or targets, such commitments or targets are current as at the date of 
publication and have been formulated by the relevant investment team in accordance with either internally developed proprietary frameworks or are otherwise based on the Institutional Investors 
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policy implementation in ESG and other climate-related areas, enhanced future technology and the actions of portfolio companies (all of which are subject to change over time). As such, 
achievement of these commitments and targets depend on the ongoing accuracy of such information and representations as well as the realisation of such future matters. Any commitments and 
targets set out in this material are continuously reviewed by the relevant investment teams and subject to change without notice.
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