Corporate statements

STATEMENT UNDER S.54 OF THE MODERN SLAVERY ACT 2015

1. Introduction

This is a statement made by Cubico in accordance with section 54 of the Modern Slavery Act 2015 and covers the financial year from 1 January 2019 to 31 December 2019.

2. Background

Cubico is one of the world’s leaders in providing renewable energy, the fastest-growth energy source, across the Americas and Europe. Our portfolio includes onshore wind, solar photovoltaic and solar thermal assets.

We are fully committed to playing a significant role in the transition towards a clean energy world optimizing the use of natural resources while respecting the environment and the social development of the communities in which we are present.

Our organisation is split broadly between corporate activities and operational activities.

Corporate Activities

Our corporate activities are performed at the following offices: London (where we are headquartered), Uxbridge (UK), Madrid (Spain), Milan (Italy), Lyon (France), Sydney (Australia), Mexico City (Mexico), Stamford (USA), São Paulo (Brazil). We have recently opened new offices in Uruguay and Colombia, and these are now operational and have been throughout the financial year in question.  Employees in these offices undertake skilled activities including project origination and execution and corporate services (finance, tax, legal, HR).  We also have an office in Fortaleza (Brazil) where both corporate activities (providing legal, technical and finance/accounting support to the Brazilian projects) and operational activities (providing day-to-day operational support to the Brazilian projects) are undertaken.

Our corporate activities have only an occasional dependence on temporary workers and contractors and the nature of that work is mainly of a professional service nature.

Operational Activities

Our operational activities constitute the building and management of our renewable energy assets ‘on the ground’. We predominantly outsource the construction of new assets to contractor(s) experienced in these areas. Once our assets are in service, we predominantly outsource the operation and maintenance work. Our asset management services, which include providing support and resources to the relevant project companies to enable effective supervision and monitoring of the assets and oversight of contractors, and to provide certain corporate, legal and other back-office services are partially outsourced.  All outsourced construction, operation and maintenance and asset management activities are managed through contracts with the various third parties in commercially agreed forms and are generally on a medium or long term basis.

3. Slavery and trafficking policies

Operating to high ethical standards is central to our organisation. Both our General Code of Conduct and our Anti-bribery and Corruption Policy make clear that good corporate governance and the professional ethics of our employees are the pillars upon which Cubico’s activity is based.

We have welcomed the increased focus brought to bear by the United Kingdom’s Modern Slavery Act 2015 and the Legal and Compliance team have responsibility for implementing and reviewing controls to address the risks of modern slavery occurring in our operations and supply chains.

Building on the work we did during 2017 to update policies and make more explicit reference in them to modern slavery, we now have a single Cubico Procurement & Business Partner Vetting Policy to which our employees can turn for guidance.  This has  increased the clarity of our approach in assessing whether suppliers, joint venture partners, sellers, developers, acquisition targets and other stakeholders with whom we engage (together referred to as “Third Parties”) maintain appropriate standards with respect to the prevention of modern slavery in their own operations and supply chains.

We continue to commission KYC Reports at certain key points in our relationships with Third Parties that are categorised as medium or high risk.  These reports incorporate an assessment of the risks of modern slavery. During the course of 2019 no KYC Reports were generated which raised specific concerns with respect to modern slavery.

During 2017 we introduced a Supplier Code of Conduct which sets out the standards we expect from all those who work for and with us with respect to combating modern slavery, anti-bribery and corruption and health and safety standards. We continue to place a contractual obligation on all medium and high risk Third Parties to adhere to our Supplier Code of Conduct and periodically send our Supplier Code of Conduct to certain Third Parties and ask them to reconfirm that they will comply with the terms thereof.

4. Risk assessment

Corporate Activities

We have assessed that, given our internal operating standards, the risk of modern slavery occurring in our corporate activities is relatively low.  However, we remain vigilant to the risks particularly with respect to the limited low skilled outsourced labour that we engage at our offices (e.g. cleaning services).  The Global Health and Safety Manager has visited our new office based in Colombia, and did not identify any areas of specific concern.

Operational Activities

We have also assessed the risks of modern slavery occurring in our operational activities and identified key areas of focus to be:

• Our high-risk jurisdictions: Cubico has a global footprint and operates in a number of jurisdictions. Some of those jurisdiction pose a higher risk than others and are monitored more closely as a result.
• The high levels of outsourcing of operational activities (as described above): Whilst Cubico predominantly contracts with large, well established suppliers we acknowledge that even they do not always have their own directly employed local work forces in the remote locations of some of our projects.
• The nature of the work undertaken, including:
• construction of assets and the infrastructure that supports them;
• outsourcing of operation and management activities associated with finished assets; and
• outsourcing of low skilled maintenance work at assets, particularly in higher risk jurisdictions.

Slavery and trafficking risks are already taken into account in the assessments made when Cubico is deciding whether to acquire or develop assets in a new country.  The Legal and Compliance team have a central role in advising the organisation on those risks.

Legal Risk and Compliance Health Check – Anti-bribery & Corruption and Modern Slavery

• During 2018 we carried out an assessment of our risks with respect to (i) bribery and corruption and (ii) modern slavery in conjunction with 22 internal stakeholders across our operations in Mexico, Brazil, Italy and Spain.  As a result of that review we: created the single, unified Cubico Procurement & Business Partner Vetting Policy referenced above; and
• As we reported previously, we have been following through with our assessment of high and medium risk suppliers based on questionnaires issued to them and an assessment of their responses.

Assessment of the responses to questionnaires received to date have not highlighted the need for further action to be taken or investigations made.

5. Due diligence and actions to address risks

Our procurement practices and controls (which include insisting on a contractual right to audit a supplier where appropriate) have mitigated the risks of modern slavery in our organisation and supply chains.  However, the increased focus that we have placed on modern slavery (as described above), particularly with respect to our procurement practices, further enhances our risk management.

At the start of 2018 we appointed a Global Health and Safety Manager who regularly undertakes site visits. He has undergone modern slavery training and assesses our risks in this area when on site which enhances our risk management practices and controls.  During 2019, the Global Health and Safety Manager conducted site visits at the following locations: Brazil, USA, Italy, UK, Portugal, Colombia, Mexico, Spain, Greece and Uruguay.  Our Global Health and Safety Manager ensured that he visited our recently acquired operations in Colombia before the end of 2019.

The Executive Committee, including the CEO, CFO, General Counsel, Head of Asset Management, Head of Americas and Head of EMEA, have all received training on modern slavery. As part of their role they do a number of on-site safety walks every year which include an assessment of compliance and modern slavery risks.

During 2019 the Executive Committee and the  Global Health and Safety Manager did not identify any areas of specific concern which required further action or investigation with respect to modern slavery.

6. Our proposals for 2020 and beyond

We are committed to combating the risks of modern slavery occurring within our organisation and supply chains.  Cubico’s Internal Auditor and Procurement Manager alongside the Legal and Compliance team,  have specific remit to further address the risks and will lead initiatives to:

• continue our work in assessing our high and medium risk Third Parties and to develop our risk analysis and selection of suppliers including by reviewing, refreshing and as appropriate reissuing our slavery and trafficking questionnaire;
• via site visits conducted by our Global Health and Safety Manager, continue to carry out due diligence and audits on suppliers and our own assets.;
• continue to enforce the requirements of the Supplier Code of Conduct;
• continue to liaise directly with our Global Health and Safety Manager on issues/risks he identifies and make recommendations to Cubico’s Legal and Compliance team;
• refresh our assessment of our suppliers and identify any Third Parties who we deem high risk;
• embed our current and new employees’ understanding of modern slavery risks so that they remain vigilant and follow the controls that we have in place to reduce these risks.

Modern slavery will continue to be a standing agenda point in respect of all quarterly risk management meetings which are attended by all heads of country.

 7. Training

As noted in our 2016 statement we acknowledge that our employees are our ‘eyes and ears’ when it comes to vigilance on the risks of modern slavery.  In 2018 we invested in an e-learning modern slavery module which was rolled out to approximately 50 employees in our procurement, operations, asset management, health and safety and legal functions and to our Country Leads.   In 2020 we will reissue this training to relevant employees to ensure modern slavery risks remain at the forefront of their minds.

This statement is made by Cubico Sustainable Investments Limited and the board of directors of the company have approved it and will update it annually.