180315 take off

ESG improvements can see valuations take off

Articles | 15 March 2018

Our unlisted infrastructure team invest in Brisbane Airport because they are a market-leader in sustainable operations – an approach which is increasingly critical to the long-term growth of an assets' value. Here we explain how some small sustainable changes can add up for an assets' valuation.

Brisbane Airport, Australia’s third largest airport by passenger volume and the principal gateway to the state of Queensland uses over 200TJ of energy every year, with 95% of that energy powered by electricity. The business has invested significantly in solar power, which in late 2018, will see 22,000 solar panels support 18% of the airport’s energy consumption.

How does this boost an assets' value?
The panels will de-risk and diversify the airport’s energy supply and is tipped to save 1 million dollars on annual energy costs. Saving 8,000 tons of carbon dioxide is the equivalent of planting 50,000 trees or removing 1,500 cars from the roads.

We invest in infrastructure businesses with long-life assets over a long-term investment horizon – sometimes 20 years or more. This makes a long-term and strategic focus, particularly when it comes to ESG, paramount. Many of the airport’s initiatives are long-term in thinking, for example, they are currently building a runway with a height and water drainage system built to handle climate change projections for the low-lying coastal site.

More shareholder friendly activity

  • - We believe their continued focus on the sustainable use of resources such as water, waste and energy will, from an investment perspective, make the asset attractive to investors now and in future.
  • - They are currently replacing part of their diesel-powered inter-terminal shuttle bus fleet with new 324kWh capacity electric buses, saving up to 250 tons of carbon dioxide emissions per annum.
  • - 35% of waste is recycled, with a goal of 50% of waste recycled by 2035.
  • - Recycled and surface water account for approximately 40% of annual water consumption.
  • - Per passenger electricity usage has been reduced following improvements in terminal lighting systems and heating/ventilation/air-conditioning (HVAC) systems.
  • - They are exploring the possibility of battery storage technology and expanding the total capacity of the solar system.

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