Bluefield Solar Income Fund | ESG

The Company was founded on the belief that renewable investments created the opportunity for attractive and stable returns whilst advancing the decarbonisation of the energy markets. It was the first solar energy focused investment company to launch on the London Stock Exchange in 2013, and the Company’s mandate has since widened to include onshore wind and storage technologies, with portfolios on greenfield, industrial and/or commercial sites. Through its portfolio, the Company is contributing to climate change mitigation through the generation of renewable energy.  

As a pioneer in the renewable market, the Company has always had a clear environmental focus. The Company believes that the integration of ESG considerations into the investment lifecycle[1] can help to mitigate risk and support long-term resilience of investments, whilst at the same time generating positive value in addition to financial returns. Examples include social value through community benefit fund payments, or environmental value through nature initiatives on site. However, the Company also recognises the potential harmful impacts that come with being part of the renewables industry, for example environmental impacts relating to construction, or social risks within wider renewables supply chains. 

As part of its responsible investment approach[2], the Company considers both the positive and adverse impacts of its investment decisions on sustainability factors, and produces a Principal Adverse Impact (PAI) statement annually. In line with the environmental characteristics it promotes, the Company is categorised as an Article 8 fund under the Sustainable Finance Disclosure Regulation, and aligns its portfolio with the EU Taxonomy.
 

[1] Investment lifecycle refers to development, investment, construction, asset management and operational phases of the lifecycle. Does not include the manufacturing or end-of-life processing of materials.

[2] Responsible approach refers to the integration of ESG across the investment lifecycle (which does not include the manufacturing or end-of-life processing of materials).

The Company’s Investment Adviser undertakes detailed due diligence on each investment opportunity, covering a range of environmental, social and governance topics. Please refer to the Company’s Sustainable Investment Policy, available on its website, for further information on how sustainability risks are integrated into the Company’s investment processes. 

The Company identified its material ESG risks and opportunities via a materiality assessment, drawing upon internal (i.e., Bluefield) and external stakeholder perspectives alongside a landscape review of the ESG regulatory environment. KPIs have been built around these aspects to measure and help manage material ESG-related risks and opportunities.

The Company’s ESG strategy is centred around three key pillars:

• Climate Change Mitigation: Supporting the UK with its Net Zero carbon ambition whilst aligning to the TCFD recommendations.
• Pioneering Positive Local Impact: Considering and, where possible, enhancing nature and encouraging community engagement at the local level throughout the asset lifecycle[1].
• Generating Energy Responsibly: A commitment to help drive ethical practices within its operations and throughout its supply chain.

ESG topics are arranged under the three pillars and reflect:

• Priority focus areas, as identified by stakeholders.
• Regulatory Requirements, including the EU SFDR, EU Taxonomy and TCFD.
• ESG reporting frameworks, including SASB. 

Further information on the Company’s ESG Strategy is available in its 2023 Annual Report. 

[1] Asset lifecycle refers to development, investment, construction, asset management and operational phases of the lifecycle. Does not include the manufacturing or end-of-life processing of materials.

The Board of the Company has ultimate responsibility and oversight of ESG risks and opportunities, and ESG is considered by the Directors as part of Board meetings, as well as investment decisions and risk management. Daily management of ESG is outsourced to the Investment Adviser, with the Board regularly updated on ESG activity through investment committee papers, Board meetings, ESG Committee meetings, ad hoc calls, and written updates. 

ESG risks are considered as part of the Company’s risk management processes, and are identified, assessed, and discussed by the Audit and Risk Committee and included as part of the Company’s risk matrix. The Company also discloses potential impacts relating to physical and transitional climate-related risks within its TCFD reports, which are included within the Company’s Annual Report and Financial Statements.

The Company has adopted an Article 8 classification under the Sustainable Finance Disclosure Regulation (SFDR). For the purposes of Article 8, the environmental characteristics promoted by the Company are to reduce reliance on fossil fuels and facilitate the UK transition to renewable methods of energy generation. Sustainability-related disclosures are available on the Company’s website. 

As a non-UK AIF, the Company is not currently in scope of this regime. However, the applicability of the framework to overseas funds is currently pending, and it is likely that it will be expanded to cover overseas funds in some capacity in due course. As such, the Company is reviewing its alignment with the SDR framework.

As a UK authorised firm, the Company’s Investment Adviser is within scope of the SDR’s anti-greenwashing rule, and work is in progress to ensure the firm’s ongoing compliance. 

TCFD 

As a renewable energy fund, climate change poses both opportunities and risks. The Company uses tools such as scenario analysis to understand physical and transitional risk exposure across different time horizons, testing portfolio performance against multiple greenhouse gas (GHG) emissions scenarios and helping informing mitigation actions. Although the Company does not currently fall within the scope of the FCA’s mandatory reporting requirement, it has chosen to undertake TCFD reporting on a voluntary basis. The Company’s second TCFD disclosure was presented within its 2023 Annual Report. 

AIC

The Board recognises the importance of sound corporate governance and is complying with the new AIC Code effective 1 January 2019. The Investment Adviser is FCA regulated and a signatory to the UN Principles of Responsible Investment (UN PRI). 

Accreditations

In recognition of its positive environmental contribution, the Company has been awarded the following accreditations:

• Guernsey Green Fund 
• TISE Sustainable 
• London Stock Exchange Green Economy Mark 

Stewardship

The Company is served by a fully independent Board. All directors retire and submit themselves for re-election at each AGM and the Board has an active refreshment programme underway in line with its succession plan and policy. The Board meet at least four times a year, with several ad-hoc meetings and regular contact with the Investment Adviser. 

Great importance is placed on communication with shareholders and the Company is committed to providing a high level of transparency and disclosure with its reporting. In support of ESG, the Company, Investment Adviser and Bluefield service providers commit to: 

• Working with both shareholders and stakeholders to develop a reporting framework that meets both their needs and is appropriate for the Company’s investment portfolio; and
• Encouraging dialogue on ESG matters with shareholders and other renewable energy firms to help improve responsible investment standards within the renewable energy sector.

Further information relating to the ESG activities of the Company can be found within the Annual and Interim Financial Accounts on the Company’s website: https://bluefieldsif.com/investors/publications/.