Avoid

To avoid emissions, our focus is on investments in low-carbon infrastructure. Our three investment themes are energy transition, decarbonisation of transport and digital infrastructure. The overall objective is not only to avoid emissions, but also target attractive returns from growing sectors with strong market demand.

Energy transition

The key area of interest here is renewable-energy projects. Adjacent to this, we are exploring sectors such as battery storage, which can help address the problem of “intermittency”: the fact solar and wind power can only be generated when the sun is shining and the wind is blowing makes it vital to store the energy generated at those times.

Innovo

Five-year pipeline of over 2.8 GW in renewables and energy storage

Innovo Renewables has a five-year pipeline of over 2.8 GW in solar PV, onshore wind, and battery storage projects across Italy, the UK, and Spain, with plans to expand further in Europe. Their investment supports the growth of renewable energy in Europe, aiding the transition from fossil fuels and aligning with the objective of the fund to reach net zero by 2040 and the EU’s climate goals.

The market for renewable assets is growing, with global investment in the low-carbon energy transition surging 17% in 2023, reaching $1.77 trillion. Innovo capitalises on this by focusing on development-stage assets, creating options to build, operate, or sell projects at the Ready To Build (RtB) stage.

They de-risk development through co-development agreements with experienced local partners and pre-agreed RtB pricing through a JV with Iberdrola (1 GW).

Additional value is created by focusing on sites with private wire agreements for revenue diversification. Innovo is actively deploying over 2.8 GW of renewable energy projects in Italy and the UK, with an additional 2 GW in early stages in the UK. They are committed to sustainability, aiming for B-Corp certification, reducing office energy consumption, using 100% renewable energy for office operations, and conducting life cycle assessments for their supply chain. As signatories to the UN Race to Zero, Innovo has set a Net Zero target by 2050, aligning with a Science Based pathway.

³ Energy Transition Investment Trends 2024, BloombergNEF, January 30, 2024.

Decarbonisation
of transport

Transport-related carbon emissions, particularly from road vehicles, are a major contributor to climate change. Through investments in EV-charging point operators (CPOs), we aim to contribute to the transition away from internal-combustion-engine (ICE) vehicles and enable the roll-out of EVs.

Connected Kerb

This investment is crucial for supporting the Government’s target of 300,000 chargers by 2030.

The fund has committed £40 million to Connected Kerb to support the installation of 190,000 on-street EV chargers by 2030. This investment aims to revolutionise access to EV charging for millions of drivers without off-street parking. Our investment is equivalent to about a quarter of the UK Government’s LEVI Fund, which supports local authorities in funding on-street EV charging projects.

As part of the deal, Connected Kerb will also install EV chargers across Aviva Investors’ pan-European real estate portfolio, which includes over 300 major assets in the UK.

This multi-million-pound investment into UK public charging infrastructure will significantly contribute to the Government’s plan, ensuring that more drivers have access to convenient and reliable EV charging options. Connected Kerb’s hardware and expertise will be key to supporting the electrification of this extensive portfolio.

Since investment, Connected Kerb have committed to reduce their Scope one and two emissions by 42%, in line with SBTi initiatives and the 1.5 degrees global warming target. Our ongoing engagement with them has focused on opportunities to reduce scope three emissions.

Erapid

Engagement leads to 100-day sustainability plan

In 2023, the fund made a €30 million investment into Erapid, marking our second significant investment in the UK and Ireland’s EV charging infrastructure. During due diligence, we identified areas for improvement in Erapid’s sustainability practices, leading to agreeing a 100-day plan for Erapid’s management team.

During the asset onboarding process, we held a workshop to explore our fund and regulatory reporting requirements. Led by our sustainability team and third-party emissions specialists, the workshop covered reporting templates, annual metrics, and strategies to improve performance against our ESG emissions targets.

As a result of the 100-day plan, a senior member of Erapid’s management team has been appointed to oversee the company’s ESG strategy and ensure compliance with our reporting requirements. In 2023, Erapid made its first carbon emissions disclosure. We continue to engage with Erapid to further develop their ESG strategy and decarbonisation pathway.

Digital infrastructure

Here our focus is on sectors that enable the transition to a low-carbon economy, supporting the data needs of smart cities and buildings, including data centres and telecom towers. Our investment in fibre broadband should support high-speed internet connectivity, facilitating remote work and thus reducing the need for commuting; this in turn should help lower emissions from transportation.

ITS, Truespeed and County

200,000 homes connected
since investment

The fund has made three investments into leading fibre connectivity providers in the UK market. Truespeed and County build and operate full fibre networks in market-towns and rural communities in West and East England, while ITS is focused on the B2B market nationwide. As well as supporting connectivity for rural businesses, fibre is a low carbon solution, replacing inefficient copper networks.

Our ongoing engagement with our digital connectivity portfolio companies has focused on procuring 100% of energy from renewable sources, and early engagement with the contractor supply chain to minimise construction emissions.

In 2023, ITS successfully initiated 50 new local job placements, spanning its operational hubs in Daresbury, London, and Wilton.

ITS also delivered 17 comprehensive education outreach and career support activities, with a total of 77.5 employee volunteer hours provided to support this. County Broadband have committed to a 50% reduction in emissions by 2030 and Net Zero by 2050 since investment, and we continue to engage with all three fibre companies to agree bespoke decarbonisation pathways and monitor carbon avoidance.