SIF Ireland is asking leaders in the ESG and Responsible Investment space to share their insights on developments in this vital sector. This week, we speak NTR CEO Rosheen McGuckian.
SIF Ireland: How has the Covid19 pandemic impacted on the ESG agenda?
RMcG: “The ESG agenda is as important if not more important as ever. The “S” aspect of ESG comes into sharp relief as we aim to ensure the safety and well-being of our staff and our business partners while operating critical infrastructure. We generate clean energy across multiple European markets and the people maintaining our clean energy assets are providing an essential service, but need to do so in a safe and protected manner.
“NTR has been a key contributor in developing industry guidelines on maintaining clean energy assets while protecting the well-being of the teams working on site. The pandemic reminds us how infrastructure such as ours is firmly embedded in the community and we have responded quickly to make funds available to the communities in localities where our projects are based, to both respond to its immediate impact and then support efforts to rebuild as COVID-19 dissipates.
“Interestingly, the “G” aspect of ESG, governance, has sometimes been the poor relation of ESG, as its impact has been harder to quantify. However, the importance of good governance has come to the fore during this period of upheaval. Is the business continuity plan robust? Does the organisation have the right policies, processes and structures in place to ensure decisions are being made with the right decision making framework? Is there proper diversity of thought at senior levels and board levels to ensure an empathetic and well-rounded response to decisions that are affecting people at a very human level during the pandemic? These are just some ways in which governance is being tested.”
SIF Ireland: What about investor appetite and the outlook for the rest of 2020?
RMcG: “In our sector, clean energy, the climate change agenda hasn’t gone away and investor appetite for quality clean energy assets hasn’t diminished. The reduction in economic activity generally is, of course, having an impact on wholesale power prices right now. However, investment decisions made regarding sustainable infrastructure take a 25+ year horizon into account and therefore the short-term impact of wholesale power-prices is not turning investors away from the sector.”
SIF Ireland: How optimistic are you about the agenda?
RMcG: “The pendulum has swung far enough in favour of the importance of ESG that even the current pandemic crisis won’t affect it. The pace of adoption may be affected over the coming months as organisations grapple with immediate issues, but so long as investors continue to expect and demand sustainable practices from their target investees, the agenda is on a firm footing.”
SIF Ireland: Can you tell us a bit about your organisation’s future plans around ESG?
RMcG: Our first phase was to formalise much of the good work that was already in place and to have this externally validated through the UNPRI review system. We are now aiming to challenge ourselves further and ask whether there is more that needs to be done at each of screening, investing, constructing and operating stages of our investments. We continue to emphasise the ESG agenda to our supply chain, asking tier 1 suppliers to sign up to our compliance statement, which in effect covers the UNSDG principles. We see ESG as being part of the culture of the organisation, a guiding principle behind every choice made or action taken by our staff and so this new phase is about speaking with our investors about their expectations and assessing whether there is more we can do to step ESG beyond documented processes and be more of just how we do things around NTR.”