 Hello, my name is Claire Skinner. I'm the regional leader of Hydroconstructals in Europe. I'm a partner in our global industrial and CEO and board practices. Today we're joined by Niall Mills, the managing partner and global head of infrastructure for Igneo infrastructure, which is a global asset management group with $15 billion under management and providing active specialist investments around the world. Prior to joining Igneo, Niall held a number of senior roles in industry, including Southern Water, Honeywell, Bechtel and United Utilities. He currently sits on the board of investing companies, including UK Water Utility Anglican Water Group, a Finnish electricity group called Karuna and an Estonian District Heating Group Utilities. Niall, welcome and thank you very much indeed for taking the time to speak to us today. Tell us a bit about Igneo and the group's journey on net zero and how you're thinking about it. If I start with Igneo, we are an asset manager, a specialist infrastructure manager and as you rightly said in your brief intro, we're very proactive and engaged with the business we invest in and we manage by really getting into the businesses and forming a tight partnership with the management teams in the assets that we invest in and ideally adding some value and one of the things that I often say to my colleagues when we either require a new business or somebody who may be joining a board for the first time is that you have to bring something to the board table. A board role is a responsibility not an entitlement, you have to come as ideas, you have to engage with the management team, you have to recognise that quite often you will be working with people who are specialists and many, many years if not decades of experience in the business that you're investing in, so they've got an awful lot to contribute. In terms of net zero, we as a fund have made a commitment to be net zero by 2050. We will achieve that much earlier in many of the businesses that we're invested in, for example in Angaine water we hope to achieve that in the next decade in our wind portfolio in Portugal where net zero already, but in other heavy industry businesses that will take longer, hence what I would say is a relatively unambitious target 2050, so we're going to work very hard to bring that forward. The reason we haven't said something like 2040 or 2035 is we're not going to make sweeping statements and commitments like that until we actually know we can achieve it, so we're actually working very closely with all of the businesses in the portfolio to have a tangible and realistic plan of what are we going to do to make sure we can get to net zero and then you'll see that target coming in closer, but in terms of how does that align with Igneo as a business it's an absolute fundamental, it's a responsibility from all of us as individuals I actually believe it starts at home, I think the net zero journey is the way we behave with our families and our friends, but as a business and a big investor with a big responsibility to our customers, our clients, communities then it's an imperative. Can we start first at a platform level when you're thinking about the trends in the industry around ESG broadly, but also around net zero, what are your investors asking you to do and then how does that reflect on the people you recruit and develop onto your platform? We as an asset manager, the people that are entrusted with the stewardship of other people's assets are hands-on and get it done, we do not outsource ESG or responsible investment to statistical consultants, we want to do it ourselves, we want to learn, we don't get everything right but we want to work with management teams and really get under the skin of delivering that and that's that's absolutely where the sector is today, it's an expectation requirement, if we weren't doing it, if we couldn't show that we were doing it, if we couldn't show that year on year we'd improved, our staff would go somewhere else, the culture wouldn't be right and that's where attracting talent is about culture, it is about providing a place where people want to work, where they feel valued, where they enjoy it and one of the things I'm very proud of as you know is we've got no private offices, we're a completely open plan team, we move the desks around, we want people to sit with different people and get to know the team really well, we don't believe in status from desks, we want to be open, listen to what's going on, I've always said that you shouldn't be having any kind of conversations that you wouldn't be comfortable sharing with your colleagues or them listening to it, if you need to make a personal phone call, plenty of rooms and plenty of offices to go and do that, but in terms of talking about the business, I want the whole team to hear what's going on and I want them to understand where there are challenges within businesses, where things are going well, wanting to hear language about reporting, about new requirements, so we're all improving our knowledge all the time, the two things that are most important about somebody's career are the quality of the people that you're working with and that's both personality, culture, ability and variety and we're really, really lucky in Igneo, you know everybody in the team is involved in client engagements, everybody's involved in transactions, everybody's involved in reporting in ESG and in helping manage the portfolio assets. Now as an investor what do you expect your boards to do to drive net zero, to be ambitious, to really push this through and what are the trade-offs that you are discussing on the board as you think that through? So how do we approach it? Well we spend a lot of time trying to find the right people for those boards, the right leadership teams, we're looking for individuals who have an appetite for change, who have experiences to bring to challenge, to support, we're looking for people who have plenty of hunger and ambition and thankfully you know there are many, many people out there that have all those qualities and we're looking for diversity of thought in everything else and then we get down some simple basics so at acquisition for post acquisition of a new business we look to set up a really good governance structure and obviously we comply with UK corporate governance code in every regard but we also try and enhance that a little bit so we will have a formal safety committee reporting to the board that has the same status as the old committee and the remuneration committee and nominations because quite frankly health and safety is just as important as remuneration if not more so so we'll do that and then we have five minimum standards that we look to implement and I won't bore you with all of that but it's much of what you would expect now within those five minimum standards there's a lot of detail and quite often we're lucky that there's a little bit of low hanging fruit so it may be that the business doesn't do annual customer satisfaction service just picking a simple example so we implement that quickly and so you can normally achieve a few things quite quickly that sends very strong signals to the organization that you're deadly serious customer service you're really serious about environment protection so we do that then of course you're into the longer whole of trying to make long-term improvements because there's you know you will run out of easy fixes in your first 12 months well you should do because the easy stuff should be addressed quickly and the longer whole stuff is about defining the strategy that will decarbonize the business defining the strategy that will improve customer service to enable you to have your customers there in a very sustainable way so that all the good things you're doing to for example decarbonize are of course being recognized and being used by your customers and you're growing the business and I say I mean with enormous pride we're not we're not shy at all of putting a lot of investment into businesses to make that happen and I mean hundreds of millions in in corona for example we invest at 1.5 billion euros over six years to weather proof the network to push cables underground in infinium in the UK the the the business where you know you've you've helped us build an outstanding board of leadership team we're investing hundreds of millions in new energy from waste plants using the best technology on the planet and that's avoiding you know it's simple simple stuff that's avoiding landfill okay we've all driven past landfill with the thousands of seagulls overhead destroying the countryside you know just creating this long-term pollution issue it's not sustainable it can't go on so energy from waste must is that's that's the way we turn that waste into energy sell it back into the grid but it's also avoiding the damage of landfill and the production of methane that comes from those sites as well so there's a really strong ethical side to what we're doing and that's a great way to engage with customers it's a great way to engage with employees another example scant lines ferry business from Denmark to Germany during the pandemic when we were cutting costs we're really concerned about customer traffic we ordered a brand new fully electric ferry 80 million euros biggest in the world because we were never going to stop decarbonizing the business electrifying the fleet just because of the pandemic we knew could come out of it we knew we had to do it and replace that order and so you know again signaling to the business that even though we were in the middle of a pandemic you know revenues have dropped people weren't traveling for obvious reasons it wasn't going to stop our commitment to doing the right thing for the business and that's a great example of a business that has come out of the pandemic much much stronger if you look forward across the portfolio and also the investments you're likely to make in your funds are you going to do you think you're going to change the profile of the talent that you look to bring into either the executive or the board in net zero and taking net zero into a camp or do you think it's going to be more of the same do you think there's going to be particular skillset that you're going to want around the table I think we have to challenge ourselves to bring in better more creative and contemporary talent so I love working with I love working with real people okay and I want to work with people who who are honest and direct and then show you their emotion and that they care and that's really exciting for me and I you know I want I want people to feel that they can be authentic and emotional in business because it is important that it makes such an enormous difference I want the same in executive committees and the same in the board it's not up there's a I'll qualify that and say that of course there's an element of professionalism that we have to maintain at all times there are standards but I want that real energy to come out and people to feel that they can share ideas and bring all these ideas to the table so that so that absolutely takes you on a journey that is moving from you know boards 20 years ago which were all about governance it was all about you know it was all about so what's keeping you awake at night or is there anything you haven't told us yet that kind of stuff like that that just doesn't wash anymore you know you want people who can engage and say there's a bit of innovation going on in another company I'm involved in do you think it'd be useful to discuss that because I'm very happy to make an introduction because I think that might be very additive to your strategy for whatever it might be electrification or you know remote monitoring or whatever it might be you know so innovation sits absolutely hand in hand with decarbonizing with low carbon with ESG but that's that's like training for you know it's like athletes training for the Olympics they spend years and years training for that one event it's the same for something like innovation and take it takes years and years to get there but standing in that podium picking up the medals later on is like delivering your business success five years down the line it's you know highly engaging and motivating and so I love that I mean like if you're a little a little bit clearer I am so I went to visit one of these technology companies and they absolutely blew my mind with innovation blew my mind and at the end of the day I was in back in the hotel with the the chief engineer head of innovation this particular business is not one of our advisors of course because when you meet good people keep them don't let somebody else take them and so so this this this this gentleman was with me he was working for the portfolio company at the time he's not one of one of our advisors and a personal friend and I said to that evening in the bar I said that's great idea you know this is really going to transform this company really enjoyed it what about this what about that trying to understand a bit more try to pretend I broadly understood the concept which of course I didn't and I said to him do you have any more ideas and he said um oh no I've got loads I was like oh yes this is really exciting so well I can't tell me then tell me so he listed off four or five of these ideas because it's fantastic and he said yeah but it's going to cost a lot of money that's all you've got it you've got it that's what we do we invest you know we put money into business to make it better we've got it as an institution is there anything that you found you know when you're trying to make these investments on decarbonisation have you anything any pushback or any cultural things that you've had to overcome or has it been pretty plain playing no no no they're always challenges I think you know we've got um I think by the end of this month we'll be close to a hundred people globally you know when we were 20 people sharing ideas was so easy it was just so easy we were closer together we could discuss things we could listen in it was just so easy today with you know close to 100 in the investment team it's very easy to miss a good idea so the first challenge is is sharing ideas and actually I've just had a discussion last night with one of my senior team about taking the lead on innovation we've already got a couple of experts on ESG but I want somebody to lead innovation because sharing those ideas can be really really valuable and it's not easy so that's the first hurdle is making sure you know what's going on so you can take the best ideas and use them across the portfolio and the next bit is resistance of course it is because you get some management teams where everything's okay we don't need to change you know we're the best in the sector and then you have to say well can we prove you're the best in the sector can we really look at this and find some examples but you do get resistance and in any business you know of course you can persuade you can excite and energize and you know make people want to do something but there are competing tensions for resources of course there are you know it's it's you know there isn't money for everything in it and every time so you do have to think very carefully about prioritizing you do sometimes have to invest to enable and an enabling investment is quite often not much of a return but you're paving the way for a good idea that's going to be ready in three four five years time you have to keep your eye on current operational issues because they require cash and they happen these are operating businesses and things go wrong now it's our absolute pleasure to support you and your portfolio companies on this journey and thank you very much indeed for your time that's a pleasure thank you sir