Capital Deployment
Capital deployment means putting our money to work to achieve IMCO’s sustainability goals and maintain a high-quality, resilient portfolio for the long term.
As a PRI signatory, we integrate material sustainability factors into every stage of the investment lifecycle, including the use of external managers. IMCO's Sustainability Screening Guideline describes our process for selecting companies, sectors and/or activities. We strive to apply consistent principles and processes across IMCO while adapting our approach to each asset class.
"Sustainability risks and opportunities are part of the underwriting process, like any other element of due diligence.
We are in the business of generating long-term returns, so all material factors that could impact those returns,
such as climate, are considered across all asset classes."
- Rossitsa Stoyanova, Chief Investment Officer
Selecting and Monitoring External Managers
External managers are essential to diversifying and executing our investment strategies. They complement our in-house expertise by providing efficient exposure to select markets.
IMCO partners with external managers that share our commitment to sustainability. We encourage managers to commit to net zero, disclose ESG metrics and uphold strong diversity, equity and inclusion (DEI) policies. We developed a proprietary external manager assessment scorecard to evaluate and select the top sustainability performers, as well as an ESG dashboard to track their sustainability commitments.
| Metrics | External managers as % of AUM (as of Dec. 31, 2022) |
External managers as % of AUM (as of Dec. 31, 2023) |
|---|---|---|
| ESG policy | 75% | 90% |
| UN PRI signatory | 70% | 84% |
| Net zero target(s) | 44% | 42% |
| DEI policy | 73% | 74% |
Investing in Climate Solutions
As a steward of client capital and a global investor, IMCO endeavours to play our part in the transition to a net zero economy. This transition offers numerous sustainable, long-term investment opportunities that we expect will deliver strong investment returns for our clients.
Capital deployment is the first pillar of IMCO's Climate Action Plan. We pursue opportunities that contribute to investment returns while having a climate-positive impact. We mitigate risk through climate-related due diligence and the thoughtful use of climate guardrails.
We define climate solutions as companies or projects that derive most of their business from products or services that reduce emissions or otherwise mitigate climate change effects. Clean energy transition investments are a subset of climate solutions that further the transition to a lower-carbon economy.
We have set a target to deploy $10 billion in climate solutions between 2020 and 2030.
Investing in Social Solutions
In alignment with our World View, IMCO believes there are powerful, long-term societal trends that are expected to present investment opportunities while addressing socioeconomic challenges.
Social solutions are defined as investments where a majority of the company’s business is derived from activities that provide or enhance social necessities, such as access to essential services, affordable basic infrastructure, affordable housing and food security.
Unlocking human capital is also one of IMCO's areas of focus, where we seek to advance matters like DEI, health and safety, and employee ownership to enable a talented workforce to fulfill its potential.
Case Studies
NeXtWind
Along with investment partners, IMCO committed up to US$750 million to acquire NeXtWind’s portfolio of onshore wind assets. NeXtWind is a repowering and life extension platform for aging fleets of wind turbines that are near the end of their useful lives, presenting an opportunity to modernize the turbines and expand clean power generation at these sites.
Blackstone
IMCO committed US$300 million to the Blackstone Green Private Credit Fund III, which will provide flexible credit capital to companies and assets driving the energy transition, with a focus on renewable energy, energy transition, sustainability and climate change solutions.
Resource Innovations
IMCO invested in Resource Innovations, a third party provider of energy efficiency program management and advisory services to utilities across the U.S. The company designs, markets and implements demand side management programs for utilities to reduce energy consumption and carbon emissions from residential and commercial customers.
Fifth Wall
IMCO invested US$50 million in the Fifth Wall Climate Tech funds, the largest investment vehicles designed to decarbonize the global real estate industry. The funds invest in essential tools for improving operational efficiencies and emissions reduction, such as property technology and digitization. In 2022, one of the funds invested in Brimstone, a company that makes zero-carbon cement using carbon-free silicate rock. Cement production is one of the most carbon-intensive industrial processes.
Florida Food Products
Since 2021, IMCO has held an investment in Florida Food Products, which makes healthy, naturally sourced plant-based ingredients that provide alternatives to artificial food additives. The company also supplies natural beverage ingredients, as well as custom ingredients to improve the look and texture of meat alternatives. Its products replace synthetic ingredients and help extend shelf life. This improves access to safe, nutritious food. Effective food preservation also helps reduce food waste, which accounts for a significant portion of global GHG emissions.