JLEN Environmental Assets Group | ESG

JLEN's investment policy is to invest in a diversified portfolio of Environmental Infrastructure. Environmental Infrastructure is defined by the Company as infrastructure assets, projects and asset-backed businesses that utilise natural or waste resources or support more environmentally friendly approaches to economic activity, support the transition to a low carbon economy or which mitigate the effects of climate change.

Overall responsibility for ESG resides with the Board of JLEN. The Fund’s Investment Manager, Foresight Group LLP, has developed ESG objectives on behalf of the Fund, set out below, and provides analysis and reporting of ESG criteria.

Sustainability considerations are embedded throughout the JLEN 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.

JLEN’s approach to ESG is based on three core principles: Assess, Monitor and Engage.

Since the publication of the Fund’s first ESG report, JLEN has been focused on progressing each of these principles in order to maintain a robust ESG framework. JLEN’s three ESG objectives are:

ESG objectives

• Promote the efficient use of resources
• Develop positive relationships with the communities in which JLEN works
• Ensure effective, ethical governance across the portfolio

ESG KPIs

Over 2021/22 JLEN has focused on advancing its approach to “Monitor” and “Engage” by collecting baseline data against the ESG KPIs that were first agreed in 2020/21. JLEN’s KPIs are set out in its annual report 2022. Each KPI has a direct or indirect link to performance of the investment and the Investment Manager considers these to be important metrics in understanding the resilience of the portfolio going forward. Each KPI feeds back to the ESG objectives, allowing JLEN to quantify, where practicable, the ESG performance of its investments. 

JLEN is proud of the contribution its assets make to the low carbon economy. Foresight, as Investment Manager to the Fund, works with third-party technical advisers to maximise the technical performance and operational life of each asset in its portfolio. This focus on technical performance and longevity helps to maximise resource efficiency which, in turn, enhances the environmental benefit delivered by each asset through the generation of renewable electricity and heat, production of organic fertiliser from the Fund’s AD plants, treatment of wastewater, waste recycled and waste diverted from landfill

The following social criteria are typically considered during due diligence and ongoing monitoring of assets:

• health and wellbeing;
• local economic impact
• local social impact; and
• community engagement and benefit

Most of JLEN’s project companies have a community fund associated with them and JLEN is supportive of the contributions made by the project companies to them. Some of these are triggered by planning conditions, while others have been put in place by JLEN in order to drive good practice in community engagement. Each community fund is managed by community organisations such as parish councils or the operators of the assets with money allocated to projects designed to improve the lives of local residents.

Good governance is an important factor for JLEN.  JLEN holds Board positions for each of its assets, which are fulfilled by Foresight on its behalf, using a range of staff with appropriate experience and technical expertise. The Board members work to promote good governance as part of the Fund’s active engagement with projects. JLEN typically considers the following governance criteria during due diligence and ongoing monitoring of assets:

• anti-bribery and corruption;
• modern slavery;
• audit and tax practices; and
• Board composition.