Modern Slavery Statement Financial Year 2020

STATEMENT UNDER S.54 OF THE MODERN SLAVERY ACT 2015

1. Introduction

This our fifth modern slavery statement made in accordance with section 54 of the Modern Slavery Act 2015 (the “Act”) and covers the financial year from 1 January 2020 to 31 December 2020. We fully support the aims of the Act and are committed to operating free from any form of modern slavery.

2. Background

Cubico is one of the world’s largest privately-owned renewable energy companies, with an operational capacity of over 2.8 gigawatts (GW), plus more than 1.4 GW under development, across 121 wind and solar assets (as at 31 December 2020).

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), Bordeaux (France), Sydney (Australia), Mexico City (Mexico), Stamford (USA), São Paulo (Brazil), Fortaleza (Brazil), Bogotá (Colombia), Athens (Greece) and Montevideo (Uruguay).

Employees in these offices undertake skilled activities including project origination and execution, managing development and construction activities, managing assets on a day-to-day basis and corporate services (finance, tax, legal, HR).

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

Development and Operational Activities

Our development and operational activities constitute the development, construction and operation of renewable energy and transmission / distribution assets ‘on the ground’. We predominantly outsource the construction of new assets to contractors 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. Our General Code of Conduct, Supplier Code of Conduct and Anti-bribery and Corruption Policy make clear that good corporate governance and the professional ethics of our employees and suppliers 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.

Cubico’s Compliance Policies include explicit references to modern slavery. This includes our Anti-bribery and Corruption Policy, Code of Conduct and Procurement & Business Partner Vetting Policy to which employees can turn for guidance. Our Procurement & Business Partner Vetting Policy 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 2020 no KYC Reports were generated which raised specific concerns with respect to modern slavery.

We also have 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).  Employees in our corporate offices have undertaken modern slavery training and are aware of how to identify instances of modern slavery were they to arise.

Development and Operational Activities

We have also assessed the risks of modern slavery occurring in our development and 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.
  • Risks of forced labour in the supply chain of polysilicon originating from Xinjiang, China.

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.

5. Due diligence and actions to address risks

We have a number of controls in place to mitigate the risks of modern slavery in our organisation and supply chains, as follows.

  • We commission KYC Report on medium and high risk Third Parties prior to them being engaged. This helps us identify whether they have previously been involved in, or associated with, any instances of modern slavery.
  • Where we acquire a new business or asset, as part of the due diligence process, we request the seller and target to complete a Compliance Questionnaire which includes questions relating to modern slavery and the controls they have in place to mitigate risks.
  • Our contracts with medium and high risk Third Parties include Modern Slavery and ABC representations and warranties which give us a right of termination if breached as well as an obligation to comply with Cubico’s Supplier Code of Conduct. We also include a contractual right to audit Third Parties where appropriate.
  • All Cubico employees undertake annual Compliance Training, which includes a section on Modern Slavery. Furthermore, certain employees completed Modern Slavery e-learning and this will be repeated going forwards.
  • Our Global Health and Safety Manager regularly undertakes site visits. During such visits he assesses our modern slavery risks which enhances our risk management practices and controls. The Executive Committee, including the CEO, CFO, General Counsel, Global Head of Asset Management, Head of Americas and Head of EMEA, do a number of on-site safety walks every year which include an assessment of compliance and modern slavery risks. During 2020 the site visits were conducted virtually due to the impact of COVID-19. 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.
  • We maintain a confidential and independent whistleblowing hotline which employees and Third Parties can use to raise concerns in relation to improper, unethical or illegal practices. Cubico is committed to dealing with whistleblowing reports and we ensure that those who speak up are protected from retaliation.
  • In response to allegations of forced labour in the solar industry in Xinjiang, China, we commissioned a consultant to conduct a Supply Chain Exposure Risk Assessment of a number of manufactures of solar panels in China and South East Asia.

6. Our proposals for 2021 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 conducting ongoing KYC and reviewing, refreshing and as appropriate reissuing our Compliance Questionnaire;
  • via site visits conducted by our Global Health and Safety Manager and Executive Committee, 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;
  • through annual Compliance Training, continue to embed employees’ understanding of modern slavery risks so that they remain vigilant and follow the controls that we have in place to reduce these risks; and
  • review and respond to the results of the 2021 Supply Chain Exposure Risk Assessment to ensure that we only engage with manufactures of solar panels who can guarantee their products are free from the use of forced labour.

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.

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.