Environmental, Social and Governance (ESG)

We believe incorporating environmental, social and governance (ESG) risks and opportunities into investment analysis and decision-making provides tangible benefits to investors, including risk mitigation, the identification of investment opportunities and improved valuations.
Diligence: incorporate material ESG risks and opportunities in our investment analysis and decision-making
Ownership: engage portfolio companies on material ESG risks and opportunities
Transparency: to provide our stakeholders with greater visibility into our ESG initiatives
We Believe Responsible Investment Practices Provide Tangible Benefits to Investors
Companies with strong environmental, social and governance (ESG) practices mitigate certain risks in portfolios. Identification of investment opportunities achieve favorable valuations. Toniic is a membership organization that focused on identifying impact investing opportunities, and added Kayne Anderson Renewable Infrastructure Partners to their fund platform in 2019.

Investor Initiatives

Kayne Anderson has been a participant in the GRESB assessments since 2017.

Renewable Energy Addresses Climate Change

Source: EIA

The growth of global energy demand is fueling the increase in carbon emissions, particularly in emerging markets, where coal is the predominant energy source. With the U.S. energy Information Administration (EIA) projecting global energy demand to increase by nearly 50% by 2050, carbon emissions will continue to rise in the absence of continued investments and developments in renewable energy. The growth in energy demand is in large part due to the global population, which the United Nations’ estimates will reach 9.7 billion by 2050.

Investment in renewable energy is an important step to address global climate change. Increasing the supply of renewable energy directly replaces carbon-intensive energy sources and significantly reduces greenhouse gas emissions. In recent years, the renewable energy industry has undergone significant change. The advancement of renewable technologies and rapid reductions in cost have accelerated the deployment of renewable solutions.

Source: IRENA

Sustainable Development Goals

The Sustainable Development Goals (SDGs) were unanimously adopted the 193 Members States at the United Nations Sustainable Development Summit in September 2015. The SDGs include a universal set of 17 goals, 169 targets and 232 unique indicators to help organizations monitor and assess their progress. The SDGs represent the priorities of governments, corporations, investors, and NGOs to enhance peace and prosperity, eradicate poverty and protect the planet.
How our portfolio companies contribute to the SDGs:
Infrastructure companies, specifically renewable infrastructure entities, are well positioned to contribute to the SDGs. We have witnessed an uptick in the number of companies that have made explicit and public commitments to advance the SDGs. Our portfolio companies are actively working to achieve the following:
SDG 7: Affordable and Clean Energy
SDG 8: Decent Work and Economic Growth
SDG 9: Industry, Innovation and Infrastructure
SDG 13: Climate Action

Our proprietorially defined global renewable infrastructure universe accounts for 710mm tons of emissions to be avoided annually (~5.5% of global GHG emissions), with average annual renewable generation of ~169,961 MWh. This is equivalent to...

Powering 13,867 homes

Offsetting 132 million pounds of coal burned

Taking 20,613 cars off the road

Firm’s ESG Policy

In accordance with the firm’s ESG policy, we strive to incorporate ESG into the following aspects of our investment process:

integrate material ESG risks and opportunities in our investment process

engage portfolio companies on material ESG risks and opportunities

to provide our stakeholders with greater visibility into our ESG initiatives

ESG Integration

Assess

Monitor

Engage

Considering ESG risks has long been a part of our fundamental equity investment process for many years. When our investment team initiates coverage of a new company in our investment universe, the assigned analyst is responsible for identifying material ESG risks and making an assessment regarding a company’s management of these risks.
In addition to our fundamental equity evaluation process described above, eligible companies for the Kayne Anderson Renewable Infrastructure Partners must also meet the following criteria:
1. A long-term strategy that reflects a commitment to de-carbonize their energy mix and promote the development of renewable energy infrastructure
2. Explicit goal to phase out any existing coal assets
3. Generally will not derive more than 5% of their revenues value from thermal coal generation
Once an investment is made, we actively monitor holdings as part of our fundamental process. Material ESG controversies are identified and discussed in our weekly analyst meetings and quarterly earnings updates.
As shareholders, we consider active ownership a fundamental component of our investment process. When material ESG controversies occur or we determine that a holding has limited ESG disclosure, analysts may directly engage management to address the issue. We believe that direct dialogues provide our investment team with greater insights and enables them to make more informed investment decisions.

ESG & Compliance

Jarvis Hollingsworth

General Counsel

Mike O'Neil

Head of Compliance
Mike Lombardo

Mike Lombardo

Director of ESG Strategy