Foresight Solar Fund | ESG

Sustainability and Environmental, Social and Governance (“ESG”) considerations are firmly at the centre of the Company’s strategy, helping to inform its investment process and its asset management operations. 2020 marked a year of significant development in terms of how the Company embeds ESG considerations in the way it does business to achieve sustainable growth, recognising that such factors are of increasing importance to global investors. The nature of the Company’s business means it is well positioned to serve the needs of those investors seeking to achieve positive environmental and social outcomes alongside attractive financial returns. 

Sustainability considerations are embedded throughout FSFL’s investment process and asset management procedures, from initial investment screening through due diligence and into ongoing monitoring and reporting. All potential new investments are evaluated in accordance with Foresight’s Sustainability Evaluation Criteria, five central themes that we believe cover the key areas:  

1. Sustainable Development Contribution 

2. Environmental Footprint 

3. Social Engagement  

4. Governance  

5. Third Party Interactions 

Assets are scored against a range of factors within these criteria, providing an overall picture of ESG performance. Foresight has sector-specific minimum thresholds for ESG performance, ensuring that, where necessary, post investment improvement plans are implemented. 

Each asset is closely monitored for its localised environmental impact. As such, this criterion assesses potential environmental impacts such as emissions to air, land and water, effects on biodiversity and noise and light pollution. The Asset Manager ensures that solar power plants are managed in a manner that maximises the agricultural, landscape, biodiversity and wildlife potential, which can also contribute to lowering maintenance costs and enhancing security.  

The Asset Management team has continued to pursue a number of initiatives to ensure the solar power plants are being effectively managed for agriculture, landscape and biodiversity. Such schemes include:  

• Hedgerow and tree planting 

• Building of animal refuges 

• Bat and bird boxes 

• Sheep grazing 

• Beehive installation  

• Grassland management  

During the acquisition process, and throughout an asset’s lifecycle, the Company engages with contractors, local residents, community organisations, landowners and local authorities to promote public support for the project, maximise the local benefit and minimise any actual or perceived negative effects. This has been achieved through a number of initiatives:  

• Community engagement  

• Community investment 

• Educational initiatives  

• Health and well-being  

The Asset Manager actively reviews the regulatory and property consents of every solar asset to ensure compliance with the permissions and conditions attached to each site and actively engages with local government organisations to ensure ongoing compliance. In addition to ensuring the Company is protected from potential legal issues, this promotes trust with the sites’ local communities.  

Integral to the maintenance of the Company’s reputation is its regulatory compliance and adherence to relevant laws. The Company is committed to carrying out business fairly, honestly and in compliance with laws and regulations and the Investment Manager has established policies and procedures to prevent bribery within its organisation. The Company is also committed to a policy to conduct all its business in an honest and ethical manner, taking a zero-tolerance approach to facilitation of tax evasion, whether under Jersey Law, UK law or under the law of any foreign country. 

Counterparty due diligence forms an essential part of ensuring that key counterparties are reputable, experienced, competent and have an approach to governance, compliance and ESG aligned with the Company, which must be evidenced by appropriate policies. 

The Investment Manager has also established an O&M Provider Sustainability Agreement. This has been signed by three of the Company’s largest O&M providers who have responsibility for managing c.70% of the portfolio. The Sustainability Agreement will be rolled out to the remaining smaller O&M providers in due course. This agreement stipulates where the Investment Manager believes positive environmental and social outcomes can be achieved within supplier activity.  In order to review the performance of the O&M providers, the Investment Manager will meet with them once a year and discuss how these principles worked in practice, as well as collaborating to update the principles, if necessary.