Corporate Governance and Investment Aligned Processes

Responsible

At CKD Infraestructura México we have adapted as Mission "to provide our investors with risk-adjusted returns that are predictable, stable and attractive, through a decision-making process that includes risk identification and value creation taking environmental factors into account." and social aspects in our investments, within a solid framework of corporate governance”. 

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Vision

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We are convinced that considering the impact of environmental, social and corporate governance (ASG) factors has a favorable impact on our objectives. For this reason, in September 2018 we signed the Principles of Responsible Investment. In line with this commitment, we seek that our actions in the infrastructure and energy sector in Mexico adhere to the standards proposed by PRI. Some of the ESG topics we plan to focus our efforts on include anti-corruption measures, shareholder rights and structure, social license, property and indigenous rights, environmental impact, and waste generation and pollution.

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Scope

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This policy applies to all investments by CKD Infraestructura México. The policy will be applied actively and in accordance with the level of our participation in each of the investments we make.

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processes

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CKD Infraestructura México has integrated processes into its governance bodies –for example, the Investment and Asset Management Committees– to identify and address material ESG factors that impact its investments. The implementation of processes on ESG issues is supported by all members of the CKD IM team and there is a clear definition of the people in charge of applying this policy.

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Investment Process

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We have adopted a process to identify ESG factors that may create material risks, or alternatively, avalue creation opportunity for the financial and operational performance of our investments. The evaluation made of said analysis is considered in the decision-making process and in the definition of whether or not to continue with the investment, its valuation or how to structure it. The preliminary analysis of ESG issues is carried out internally and, in the event that material issues are identified, you can choose to hire specialists to delve into what is found. If necessary, CKD Infraestructura México can define ESG objectives and policies to be met by the promoted company.

It is important to mention that ESG factors are one of several inputs that are taken into account in the investment process and that, by themselves, do not determine the final decision that is made about an investment. In line with our mission as an infrastructure fund, our process only excludes, prior to analysis, investments related to la IFC Exclusion List.

We have a long-term investment horizon, which is why we seek to have strategic partners who have extensive experience in the industry and who are leaders in operational capabilities. Long-term relationships are sought, so it is important to align incentives to achieve the sustainability of the promoted companies.

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Asset Management

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After the investments made, CKD Infraestructura México will continue to actively monitor the ESG factors identified during the analysis phase, including any mandated remediation plan. The process to periodically identify risks and opportunities in ESG issues related to an investment is also maintained.

CKD Infraestructura México maintains a close and dynamic interaction with the promoted companies, including support tasks in the definition and fulfillment of ESG objectives. We have established as a policy to work together with the team in charge of each of the promoted companies to identify material ESG issues and the processes to address them. Finally, when necessary due to its relevance, we can comment on ESG issues in the board of directors of the promoted companies.

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reporting

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We will seek to report at least annually the situation of ESG risks and value creation opportunities to our investors, in such a way that they remain informed and involved. It will be sought that in the medium term this reporting process is standardized and allows an efficient response to questionnaires and requests for information from its investors.

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Validity

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Committed to providing the best results to its investors, at CKD Infraestructura México we will update this policy every 3 years to reflect the best practices in the matter, the relevant context, and the experience of its implementation.