Corporate statements

STATEMENT UNDER S.54 OF THE MODERN SLAVERY ACT 2015

1. Introduction

This modern slavery statement is published pursuant to section 54 of the Modern Slavery Act 2015 (the “Act”) and covers the financial year 1 January 2022 to 31 December 2022. The statement reinforces our commitment to compliance with the Act and sets out the steps we have taken during 2022 to prevent modern slavery from occurring in our business and supply chain.

2. About Cubico

Cubico is a global independent power provider working in 12 countries on four continents. Headquartered in London, UK, we have regional offices in Australia (Sydney and Melbourne), Brazil (São Paulo), Colombia (Bogotá), Greece (Athens), Italy (Milan), Mexico (Mexico City), Spain (Madrid), Uruguay (Montevideo) and the USA (Austin and Stamford).

We have an operational capacity of over 2,690 MWs, plus 1,970 MW under development (as at 31 December 2022). Our asset portfolio includes solar photovoltaic, onshore wind, concentrated solar power (CSP), and transmission/distribution networks.

Covering the entire energy chain, from development, construction and operation, we add clean energy to local electricity grids, thereby decreasing the world’s reliance on more carbon-intensive coal and natural gas. We are acutely aware of the role we have as ESG stewards in ensuring that our investments meet best practice standards and operating to high ethical standards is central to our organisation.

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

Corporate Activities

Our corporate activities are performed at our regional offices where employees 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, Construction and Operational Activities

Our development, construction and operational activities constitute the development, construction and operation of renewable energy and transmission / distribution assets ‘on the ground’.  All outsourced construction, operation and maintenance and asset management activities are managed through contracts with the various third parties in commercially agreed forms on a medium or long term basis and include comprehensive ethical compliance and modern slavery obligations and undertakings.

3. Risk Assessment

Corporate Activities

We have assessed that, given our internal operating standards, the risk of modern slavery occurring in our corporate activities is 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).  All employees in our corporate offices undertake regular Ethical Compliance training, which includes Modern Slavery training, and are regularly reminded how to identify instances of modern slavery were they to arise. Detailed modern slavery e-learning is also provided to the most relevant employees.

Development, Construction and Operational Activities

We have also assessed the risks of modern slavery occurring in our development, construction 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 jurisdictions pose a higher risk than others and are monitored more closely as a result.
• Outsourcing of operational activities: Whilst Cubico predominantly contracts with large, well-established suppliers we acknowledge that 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 (a key component of PV solar panels) 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.  Cubico’s Compliance team has a central role in advising the organisation on those risks.

4. Controls 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:

Slavery and trafficking policies and governance

Cubico maintains a comprehensive Ethical Compliance Programme, managed by the Compliance Officer. The Programme includes a number of Compliance Policies such as the Code of Conduct, ABC Policy, Procurement & Business Partner Vetting Policy and Supplier Code of Conduct and Corporate Compliance Statements which 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.

Our Supplier Code of Conduct sets the standards that Cubico expects from its suppliers, joint venture partners, sellers, developers, acquisition targets, service providers and other stakeholders with whom we engage (together referred to as “Third Parties”) with respect to forced labour, slavery and similar practices and makes clear that workers employed directly or indirectly should be treated fairly, with respect and in accordance with law.  We place a contractual obligation on all medium and high risk Third Parties to adhere to our Supplier Code of Conduct and include Modern Slavery representations and warranties in contract which give us a right of termination if breached. We also include a contractual right to audit Third Parties where appropriate to ensure they operate in line with our ethical standards.

KYC Reports and Due Diligence

Our Procurement & Business Partner Vetting Policy sets out our approach in assessing whether Third Parties maintain appropriate standards with respect to the prevention of modern slavery in their own operations and supply chains. Prior to engaging Third Parties that are categorised as medium or high risk, we perform KYC screening which assesses of the risks of modern slavery and highlights and adverse media relating to previous modern slavery related incidents. During 2022 no KYC reports were generated which raised specific concerns with respect to 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.

Whistleblowing Hotline

Cubico is committed to identifying inappropriate and illegal conduct in our business and remedying wrongdoing. To this end Cubico maintains an external, independent whistleblowing hotline which is promoted widely internally and externally to employees and Third Parties who are encouraged to report any ethical concerns they have, including with respect to modern slavery or unfair treatment of workers. No reports relating to modern slavery concerns were received in 2022.

Training

All Cubico employees undertake regular Ethical Compliance Training, which includes Modern Slavery training. Furthermore, certain employees periodically complete Modern Slavery e-learning.

Site Visits

Our Head of HSE regularly undertakes site visits. During such visits he assesses modern slavery risks which enhances our risk management practices and controls. The Executive Committee, including the CEO, CFO, General Counsel and Global Head of Operations and Country Heads do a number of on-site safety walks every year which include an assessment of compliance and modern slavery risks. No areas of specific concern were identified which required further action or investigation with respect to modern slavery.

Supply Chain Exposure Risk Assessment

Polysilicon, a key component in the manufacture of solar panels, which originates from Xinjiang, China has been linked to potential forced labour risk. Consequently, Cubico has taken a number of steps to avoid sourcing solar panels tied to forced labour and to ensure compliance with new forced labour regulations in key markets. We have engaged an independent auditor to conduct a Supply Chain Exposure Risk Assessment of panel manufacturers in Southeast Asia. The results of the assessments enable Cubico to make a more informed decision when selecting panel providers to ensure that there are no forced labour concerns. In addition, we have implemented enhanced governance controls, such as including detailed forced labour contractual protections in panel supply agreements. This extra measure is in place as an additional safeguard to prevent Cubico from obtaining production materials derived using illicit labour practices.

5. Future Actions

We remain committed to combating the risks of modern slavery and it is a key priority for Cubico’s Compliance team, alongside the Internal Auditor and Procurement Manager. In particular, we will:

• continue to develop our risk analysis and selection of Third Parties by conducting ongoing KYC and reviewing, refreshing and, as appropriate, reissuing our Compliance Questionnaire;
• continue to conduct Compliance audits of key Third Parties to ensuring they have appropriate modern slavery controls within their business or supply chains;
• continue to embed employees’ understanding of modern slavery risks through training and so that they remain vigilant and follow the controls that we have in place to reduce these risks;
• continue to carry out due diligence and audits on Third Parties and our own assets via site visits conducted by our Head of HSE, Executive Committee and Country Heads;
• continue to enforce the requirements of the Supplier Code of Conduct;
• continue to liaise directly with our Head of HSE on issues/risks he identifies and make recommendations to Cubico’s Compliance team;
• refresh our assessment of our suppliers and identify any Third Parties who we deem high risk;
• continue to review and respond to the results of the ongoing 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; and
• continue to advertising our whistleblowing hotline both internally to employees and externally to our Third Parties.

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.