Investing in the green economy: GIB’s approach to ensuring positive green impact

15th September 2014

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WHO WE ARE

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OUR MANDATE

To accelerate the UK’s transition to a greener economy and to create an enduring institution independent of Government.

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We have invested in every part of the UK, in all of our

sectors and using all our financial products

WE ARE INVESTING

Our investments will save 1.3 million tonnes of waste from

landfill

We have backed 5 local authority, 3 commercial and 2

anaerobic digestion waste projects

We have backed large and small projects; from a

CapEx of £2m to £1bn

We are building a market in energy efficiency, including

streetlight conversion and 4 NHS projects

Our investments will produce enough renewable electricity to meet energy needs of 3.0

million homes

We’ve invested £623m in 5 offshore wind projects, including

construction equity

We have set up 5 funds, with £250m, to back

small projects

Our investments will cut CO2 emissions equivalent to

taking 1.6 million cars off the road

We have committed £1.3bn of capital to 31 projects, mobilising a total of £4.6bn

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Principle 1

Principle 2

Principle 3

Principle 4

Principle 5

Principle 6

Principle 7

Positive contribution to a recognised green purpose

Reduction of global greenhouse gas emissions

Enduring green impact

Clear and firm investment criteria

Robust green impact evaluation

Effective covenants, monitoring and engagement

Transparent reporting

INTEGRATING GREEN IN OUR INVESTMENT PROCESS

We have developed a framework to mainstream green investment. Our ‘Green Investment Principles’ are an integral part of our investment process

Implemented through our Green and Responsible Investment Policies Responsible

Investment

Policy

Green Investment Policy

Green Investment Principles

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ASSESS, MONITOR, REPORT

We ensure ‘green impact’ throughout the project lifecycle. To achieve that we have committed to market leading green assessment, monitoring and reporting practices..

We are also committed to continuous improvement and open engagement

Adoption of best practice: Equator Principles & United Nations Principles for Responsible Investment.

ASSESS MONITOR REPORT

• Every investment must make a meaningful contribution to one or more green purposes before being considered

• ‘Green Impact’ is quantified where practicable

• Each stage of the pre-approval process requires green compliance “sign-off”

• All approved investments include covenants relating to green performance and penalties for non-compliance

• All investment recipients are required to submit an annual green report of performance

• We forecast the green impact of every investment with its announcement

• We report annually on our green impact against each of our five green purposes, for the reporting period and the projected lifetime impact

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MAXIMISING GREEN IMPACT

Our investment strategy targets maximum green impact. We define green impact through five measures – our green purposes:

Enhance biodiversity

Reduce greenhouse gas emissions

Increase natural resource efficiency

Promote environmental sustainability

Protect the natural environment

Offshore wind to replace fossil fuel power generation

Waste recycling facility

Diverting waste from landfill through energy from waste plants

Developing sustainable biomass procurement

Create a positive demonstration effect in the market that mobilises others

Example Measure

• GHG avoided (t CO2e)

• Materials consumption avoided (tonnes material)

• Renewable electricity generated (GWh)

• Waste to landfill avoided (tonnes material)

• Capital mobilised (£)

• Various e.g. % biomass from sustainable forestry management

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The information in this document and any accompanying material (“The Document”) is confidential and commercially sensitive. This Document is provided to each recipient on a confidential basis solely for information purposes only. No reliance can be placed on this Document by any recipient or any other person. This Document and its contents are confidential to the person to whom it is delivered and must not be reproduced or distributed, either in whole or in part, nor its contents disclosed by such persons to any other person without the prior written consent of UK Green Investment Bank plc. Except as required by law, neither UK Green Investment Bank Plc nor any of its connected persons accepts any liability or responsibility for the accuracy or completeness of, or makes any representation or warranty, express or implied, with respect to the information contained in this Document or on which this Document is based or any other information or representations supplied to the recipient. UK Green Investment Bank Plc will not act and has not acted as your legal, tax, accounting or investment adviser. This Document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any investment and UK Green Investment Bank Plc does not arrange investments for/introduce parties as a result of sharing the information set out in this Document. Registered Office: Atria One, Level 7, 144 Morrison Street, Edinburgh, EH3 8EX. Company Number SC424067. UK Green Investment Bank Plc is wholly owned by HM Government. The company is not authorised or regulated by the Prudential Regulation Authority or the Financial Conduct Authority.

HeadquartersAtria OneLevel 7144 Morrison StreetEdinburghEH3 8EXTel: +44 (0)330 123 2167

London Office21-24 Millbank TowerMillbankLondonSW1P 4QPT +44 (0) 330 123 3070

CONTACT US

For further information visit: www.greeninvestmentbank.com/green-impact