Positive investments

Key opportunities

The Trustee owns and operates several investments which it views as ESG-positive, specifically its portfolio of renewable energy assets and its forestry holdings. RBS Investment Executive Limited (RIEL) continues to look at opportunities to improve these assets through capital expenditure and to add to the portfolio through further acquisition.

During the reporting period, the Trustee has made two new positive investments:

  1. A world first renewably heated greenhouse

    The Trustee, through investment manager Greencoat Capital, is a part owner in a new 22 hectare greenhouse at a site near Ely, Cambridgeshire. In a world first, the site will use LED lighting to accelerate growth, while warming the structure using open loop heat pumps to transfer heat with water at 50°C from a nearby reservoir. New Combined Heat and Power (CHP) plants have been built to power the heat pumps, with the CO2 generated by the CHP systems transferred into the greenhouses to accelerate plant growth further thus recapturing a high proportion of the carbon. The structure is set to decarbonise both the agriculture and heat sectors, reducing the carbon footprint of produce by 30%, saving 7,000 tonnes of CO2 per annum vs. comparable gas heated facilities.

    Commercial scale growers from the UK and Netherlands have leased the greenhouses, which will provide ideal growing conditions for a range of fresh produce such as cucumbers and tomatoes. The site will reduce food miles, with additional CO2 savings, by displacing imported product from Spain and Morocco, and is among the biggest greenhouses ever constructed in the UK.

    greenhouse image

    Helping transition to net zero greenhouse gases and reduce food miles through investing in the energy efficiency of a large greenhouse in Cambridgeshire, UK.

    Image by Greencoat Capital.

  2. Materials recovery facility

    In 2021, the Fund acquired Oakleaf Recycling Ltd., owner of a materials recovery facility near Heathrow airport sorting up to 150,000 tonnes per annum of mixed waste to recover recyclable materials and to produce solid recovered fuel. Following on from this acquisition, RIEL approved a further investment in the Nine Mile Point materials recovery facility near Newport, Wales sorting 100ktpa of mixed waste to recover recyclable materials and to produce solid recovered fuel. The plants reduce the quantity of waste sent to landfill and produce a fuel that displaces some coal in cement production.

    materials recovery facility image

    Oakleaf Recycling Plant, Staines on Thames, UK.

    Image by Greencoat Capital.

  3. Key divestments

    As well as making investments with ESG-positive credentials, there are sometimes opportunities to divest assets that are no longer compatible with the ROP or represent unwanted ESG risks. RIEL decided in December 2021 to redeem all capital invested in catastrophe re-insurance. Manager research indicated that catastrophe insurance losses have increased over time, and the increase is partly attributable to more severe weather events that could be caused by climate change. RIEL has always sought to take account of climate risk as one factor in its investment decision-making process. The decision to divest was influenced to an extent by future uncertainty of asset class returns due to climate risks.