Community

Environmental and social responsibility (ESR) management

Macquarie Group (Macquarie) manages a range of investment vehicles within the Macquarie Infrastructure and Real Assets division. MQA is one of these investment vehicles. Macquarie has made a public statement on corporate citizenship which is available on its website.

The commitment is based on Macquarie taking a long-term view of its business activities and acknowledging the importance of good custodianship to the communities in which it operates.

As set out on Macquarie’s website, this commitment is underpinned by:

• A clear expectation of ethical behaviour from all Macquarie staff
• A robust framework of policies including those relevant to environmental, social and governance (ESG) responsibilities.

All Macquarie staff, including those working on behalf of MQA, have a collective responsibility to ensure that Macquarie continues to be a good corporate citizen. MQA management is supported in this by Macquarie’s integrity, equal employment and sustainability and environment officers, and the risk management group.

Macquarie staff also contribute their time, expertise or finances to community organisations through the Macquarie Group Foundation.

MQA’s environmental, social and governance policies

MQA believes that many social, environmental and economic benefits arise from responsible private-sector development and operation of infrastructure. MQA is also aware that with these benefits lies the potential for risks, including ESG risks.

MQA has adopted a policy to manage these risks that is consistent with Macquarie’s policies and reflects the risk specifically associated with management of and investment in infrastructure assets. This policy forms part of MQA’s overarching risk management framework in accordance with Principle 7 of its corporate governance statement. 

The framework is applied throughout MQA’s investment process as follows:

• Asset selection – environmental and social responsibilities are reviewed as part of the acquisition due diligence process
• Ongoing asset management – regular asset Board reporting enables compliance with environmental requirements to be monitored and environmental and social responsibility issues to be identified
• Stakeholder reporting – policies, social and environmental initiatives and compliance performance are reported internally and, where appropriate, externally.

In addition to MQA’s own processes and policies, many new infrastructure projects undergo extensive social and environmental impact reviews before being given approval to proceed. The process is typically run by governments, which will have balanced the costs and benefits of the project. Accordingly, a government-run process will usually require new infrastructure to produce more efficient environmental outcomes than existing alternative infrastructure; or, where an investment is made in existing infrastructure, for that investment to produce improved environmental outcomes over those that existed prior to the investment being approved.

ESR-related regulatory requirements

MQA is not aware of any material breaches of relevant ESR-related regulatory standards by its assets during the period ended 31 December 2010.

Environmental initiatives at MQA assets

Autoroutes Paris-Rhin-Rhône

The main focus of APRR’s environmental policy is to protect surrounding water resources and reduce the impact of various forms of pollution, including noise, visual and vehicle emissions.

Environmental factors are addressed as early as possible in the design phase of new motorways with much consultation surrounding location and special environmental measures designed to protect water, flora and fauna, and to limit noise pollution.

For new motorways, more than 10% of investment is spent on landscaping and environmental integration, including the construction of environmental-protection systems such as retention basins and noise barriers. Wildlife is also protected, with the addition of large-fauna passages and the re-creation of biological corridors.

Other environmental projects include:

• The construction of a new solar power-producing roof on a toll gate
• The improvement of wildlife crossings on older motorways
• The use of no-stop toll gates, reducing vehicle idling time and minimising greenhouse gas emissions.

In 2009 APRR became the first motorway concession operator in France to obtain ISO 14001 environmental certification and maintained this through 2010.

M6 Toll

In 2009 M6 Toll commissioned a report on carbon emissions from Staffordshire University and the Carbon Trust.

Based on the report’s recommendations, the company is now working alongside DCT Renewable Energy Projects Ltd to assess the suitability of alternative and renewable energy sources. A number of options are being considered, including solar, wind, hydro and ground heat source. DCT will produce a feasibility report outlining possible projects and initiatives. The work has been welcomed by the Highways Agency.

The company has maintained accreditation for its ISO 14001 Environmental Management System, first achieved in 2006. In the past year several landscaping initiatives have been introduced, including wildflower areas and sensitive management of balance pond areas. The balance ponds are now very well established and offer an excellent habitat for wildlife. Further, due to the rural nature of the road, specialist surveys have been completed and boundary fencing improvements made in areas where otter or badger activity is evident.

Drainage stone replacement has recently been carried out by in-house works teams. The contaminated material that has been removed will be cleaned and recycled by a specialist contractor. All waste sources are continually monitored and controlled and wherever possible recycling is encouraged.

Dulles Greenway

Toll Road Investors Partnership II, L.P. (TRIP II), the owner of the Dulles Greenway, is keenly aware of its environmental responsibilities. TRIP II has focused on identifying and actively pursuing strategies to prevent any negative environmental impact throughout the design, construction, and on-going operations of the Greenway.

Protection of Goose Creek

An example of this is the protection of Goose Creek. The main issue of concern surrounding Goose Creek is erosion & sediment control. TRIP II has implemented diversion dikes, silt fences, sediment traps, and vegetative soil stabilisation to reduce the possibility of major sediment problems. These mitigating steps cost $1.5 million more than expected.

Doubling of Wetlands

While the Greenway’s construction resulted in the loss of roughly 64 acres of federally-protected wetlands, under an Army Corp of Engineers 404 permit, TRIP II mitigated that loss by establishing 149 acres of new wetlands. This mitigation represents a 2:1 replacement ratio for forested wetlands, and a 1.5:1 replacement ratio for emergent wetlands.

Vibrant Wildlife

In recent years, local conservancy groups have been monitoring the Greenway Wetlands for all kinds of wildlife, including birds & butterflies. The Loudoun Wildlife Conservancy–with the assistance of the local Audubon Society–has conducted thorough animal counts and currently has sighted red foxes, deer, painted turtles, snapping turtles, box turtles, great blue herons, American egrets, green herons, mallard ducks, black ducks, green teals, red tailed hawks, snipe, sandpipers, and American Bald Eagles.

Tree Reforestation

TRIP II provided more than a 1:1 acreage replacement of trees that were cleared outside the Dulles Greenway right-of-way. A plan was developed, in cooperation with the official State Forester, to reforest a few large areas, rather than several small areas. This enabled greater survivability of newly indigenous trees, improved wildlife opportunities, and a greater buffer for landowners. In this large area, two to three-year-old seedlings of native species were planted at a density of approximately 622 trees per acre.

Loudoun Wildlife Conservancy

Dulles Greenway has continued to support the Loudoun Wildlife Conservancy by donating a portion of funds received from its annual Drive for Charity. In 2010 one of the initiatives made possible by the Greenway’s support was the establishment of a rain garden at Freedom Park in the town of Leesburg. A rain garden is a landscaped area that captures and filters pollutants from stormwater that runs off impervious surfaces such as parking lots and rooftops. The plants in the garden also slow the flow of stormwater, lessening its potential to create sediment and cause erosion.

Indiana Toll Road

ITR Concession Company (ITRCC) has undertaken many initiatives aimed at improving energy efficiency and minimising the environmental footprint of tolling operations. One of the primary initiatives being pursued is the reduction of vehicle idling and, as a result, vehicle emissions. A two-pronged approach has been taken:

• Renovations have been undertaken at many of ITR’s plazas to add additional lanes and booths for more efficient processing of traffic
• The introduction and encouragement of Electronic Toll Collection (ETC). ITR issues i-Zoom transponders that allow users to pay tolls without the need to stop at toll booths. It is faster and easier for toll road users while at the same time easing traffic congestion. Introduced in 2008, ETC now accounts for over 60% of total transactions.

2010 was also the first year ITRCC employees actively participated in Earth Hour. Earth Hour is a global sustainability movement that encourages businesses and individuals to turn off the lights for one hour, to take a stand against climate change.

Social responsibility initiatives at MQA assets

M6 Toll

2011 will be the inaugural year of the Midland Expressway Limited (MEL) Student Scholarship, which is aimed to commend and award those students who constantly reflect excellence in character, and who have demonstrated their leadership skills by making a positive contribution to the local community.

MEL is providing funding towards scholarships for students from Staffordshire schools. The Scholarships will support students as they progress from their school at the age of 18–19 to further their educational studies through an accredited degree course or equivalent in mathematics, the sciences, technology or engineering.

Dulles Greenway

This is the fifth year that Dulles Greenway has participated in an annual Drive for Charity. This is an initiative where, each year, a day’s toll proceeds are collected and distributed to charitable and not-for-profit organisations that provide assistance and services to the communities in which the Dulles Greenway operates. A strong sense of goodwill has developed around the initiative, with drivers often donating more money than the normal toll, and the road’s staff join in to raise money for the worthy causes.

In 2010 more than US$226,000 was donated to six local organisations through tolls and the assistance of Greenway sponsors within the local business community, bringing the total amount raised through the event during the last five years to over US$1,000,000.

Drive for Charity is built around three-year funding associations with selected organisations. This ongoing relationship ensures stability of cash flows for these organisations and allows them to plan multi-year projects. The parties that have benefitted from the event in 2009 and 2010 will again receive contributions in 2011. These organisations are:

• The March of Dimes, whose mission is to improve the health of babies by preventing birth defects
• Every Citizen Has Opportunities (ECHOworks), which offers comprehensive, individualised employment, vocational training and community integration opportunities for persons with disabilities in the northern Virginia area
• Loudoun Abused Women’s Shelter, which provides emergency accommodation, food and emotional support to women and their children escaping domestic violence and abuse
• Fresh Air/Full Care, which provides funding for summer camps for at-risk youth
• Loudoun Wildlife Conservancy, which promotes the preservation and proliferation of healthy wildlife habitats
• Dulles Greenway Scholarship Program, which provides 13 US$1,000 scholarships to local students.

About 63,000 drivers paid tolls during the event. This is the second year in a row the Drive for Charity event has been the highest traffic day on the Dulles Greenway.

Indiana Toll Road

ITR is active in supporting numerous causes, including children’s sports teams, underprivileged youth, local Boys & Girls Clubs and more.

In 2010 ITRCC donated funds to the local South Bend Schools in order to help provide school uniforms to families in need. Further contributions were also made to local organisations such as:

• The Diabetes Resource Center
• Boys & Girls Club Emerge Literacy Project
• The Economic Development Corp. of Elkhart County
• IN*SOURCE, a service provided to families of children with disabilities.

A food drive was also held in which employees were encouraged to donate non-perishable food items over a period of three weeks. The final result was almost 350 pounds of food donations that went to the Food Bank of Northern Indiana and assisted needy families in the communities along the ITR corridor.

Chicago Skyway

In 2010 Skyway Concession Co. (SCC) contributed over US$10,000 to supporting numerous causes in the Chicago area, particularly underprivileged youth.

SCC donated US$10,000 to After School Matters, a non-profit organisation for teens to become paid apprentices or club members in arts, sports, technology, and communications programs.

Additionally, over the holidays SCC ‘adopted’ an underprivileged family in the city through The Children’s Place, a local organisation serving vulnerable children and their families in the Chicago area who are infected with or affected by the HIV/AIDS epidemic. The family of three was gifted items from their ‘wishlist’ as well as a gift card for Jewel-Osco.

Warnow Tunnel

Warnow Tunnel has actively supported many projects and social organisations in the community, helping not only the less fortunate but students and senior citizens as well.

For the seventh consecutive year Warnow has sponsored Rostock Food for People, an organisation that collects food nearing its expiry date and then distributes it among the disadvantaged people in the region.

The key focus though remains supporting the youth of Rostock. In 2010 Warnow not only sponsored many talented young athletes but also provided choir robes to the Rostock Singer Academy and donated various prizes to a national student competition.

Warnow’s support, however, goes beyond that of financial assistance. During the year Warnow helped organise and run the Rostock Marathon Night and was represented in various committees and working groups aimed at strengthening the cultural and economic underpinnings of the region.