Statement on Modern Slavery

Bluefield Solar Income Fund (the “Company”) is an investment company focused on the acquisition and long-term management of a diversified portfolio of low carbon assets in the UK, with the objective of delivering long term stable dividends. The Company primarily targets utility scale solar assets and portfolios on greenfield, industrial and/or commercial sites. In addition, the Company has the ability to invest a minority of its capital into onshore wind, hydro and storage technologies. The Company has an annual turnover in excess of £180 million and an asset portfolio of 834 MegaWatts (MW) as of 30 June 2024.

The Company recognises the importance of sound corporate governance and is committed to acting ethically and with integrity in its business relationships. The Company also acknowledges that being a renewables fund does not mean that it can remove itself from wider environmental, social, and governance (ESG) topics, and that the renewables industry has a responsibility to uphold social safeguards during the transition to a low carbon economy.

The Company has zero tolerance for any form of human rights abuse, and it is actively evolving its ESG controls to help embed human rights considerations across the asset lifecycle . This supports the Company in implementing effective systems and due diligence processes to help mitigate human rights risk within any part of its business and, as far as possible, its supply chains.

The Company is committed to developing its due diligence approach, and implementing regular reviews of policy and practice, to help combat slavery and human trafficking. The Company adheres to the AIC Code of corporate governance and works closely with its Investment Adviser, Bluefield Partners LLP, and other industry specialists to achieve high standards of conduct. The Company continues to align its operations with global human rights frameworks such as the United Nations Global Compact (UNGC) and OECD Guidelines, adopting policies aligned with these principles.

This statement sets out the steps taken by the Company to prevent modern slavery in its own business and, as far as possible, its supply chain. This statement relates to the Company’s financial year 1st July 2023 to 30th June 2024, hereafter referred to as the reporting period.

2.1 Organisational Structure

The Company is a Guernsey domiciled company which benefits from a highly experienced, fully independent board of directors. The Company holds and manages its investments through a UK limited company, Bluefield Renewables 1 Limited, in which it is the sole shareholder. Bluefield Renewables 1 Limited owns several portfolio sub holding companies, which in turn own Special Purpose Vehicles (SPVs). Portfolio investments (i.e., renewable energy assets) are held within SPV companies.

On the 22nd December 2023, the Company announced a long-term strategic partnership with GLIL Infrastructure. Although a minority stakeholder, a priority for the Company has been to apply its responsible investment approach to these investments.

The Company has no employees, and therefore outsources the management of its portfolio to third party service providers.

2.1 Supply Chains

The Company is aware of the human rights risks associated with some renewable technology supply chains. As a result, human and labour rights are a key consideration for the Company, particularly in relation to materials sourcing and supply chain management.

The Company acknowledges that its supply chains are complex and full transparency has not yet been achieved, particularly in relation to solar photovoltaic (PV) modules and battery storage systems. In 2021, a landmark paper titled ‘In Broad Daylight: Uyghur Forced Labour and Global Solar Supply Chains’ highlighted concerns relating to the use of forced labour in the supply chain of polysilicon, which is the base material used to manufacture solar cells. This prompted an industry response, led by Solar Energy UK and Solar Power Europe, to develop systems and processes to improve transparency and sustainability within the PV supply chain. Whilst awareness has increased, challenges relating to visibility and traceability remain, and thus human rights risk will likely remain a key focus for the industry.

The Company will continue to assess and improve its approach to the mapping, analysis, management and engagement of its supply chains, as described within this statement.

3.1 Policies

These policies include:

• Human Rights Policy: The Company’s Human Rights Policy sets forth its commitment to respect human rights, protect human dignity and promote equality for all. The Company’s Human Rights Policy is guided by international frameworks including the United Nations Declaration on Human Rights, the UN Guiding Principles of Business and Human Rights, the UN Global Compact, and the International Labour Organisation Declaration on Fundamental Principles and Rights at work. This policy is not currently publicly available.
• Supplier Code of Conduct: The Company’s Supplier Code of Conduct sets out the values and principles the Company expects its suppliers to follow as a minimum requirement and was developed in line with global frameworks, including the UNGP, UNGC, and the OECD Guidelines. This policy is not currently publicly available, however, the main principles within the Supplier Code of Conduct are as follows:
  • For suppliers to comply with all relevant national laws and legal regulations.
  • For suppliers to adopt a responsible and ethical approach to business.
  • For suppliers to uphold and protect labour & human rights in their business and supply chains.
  • For suppliers to ensure no Modern Slavery in their business and supply chains.
  • For suppliers to manage and reduce environmental impacts in their business and supply chains.
  • For suppliers to identify and manage risks in their own supply chains.
• Sustainable Procurement Policy: The Company’s Sustainable Procurement Policy sets out the values and principles it expects its suppliers to apply in procurement by, or on behalf of, the Company. This policy is not currently publicly available.
• Whistleblowing Policy: The Company’s Whistleblowing Policy sets out the process for reporting malpractice in connection with the Company or the Investment Adviser. The policy provides a channel through which instances of malpractice, including those relating to modern slavery and other human rights violations, can be communicated, recorded and remediated accordingly.
• Sustainable Investment Policy: The Company’s Sustainable Investment Policy sets forth the commitment of the Company to embed ESG considerations across its investment process, from negative screening checks carried out pre-acquisition, through to end-of-life commitments. Material ESG risks and opportunities underpin the Company’s ESG strategy, which was developed in line with applicable regulation, frameworks and standards. These include the Sustainability Accounting Standards Board (SASB), the UN Sustainable Development Goals (SDGs), the EU Sustainable Finance Disclosure Regulation (SFDR), the EU Taxonomy for Sustainable Activities, and the Taskforce on Climate-related Financial Disclosures (TCFD).
• ESG Policy: The Company’s ESG Policy speaks more broadly to the Company’s sustainability context and its role in delivering renewable energy as part of climate change mitigation. Within this, the Company states its wishes to “ensure that globally, the supply chains that support [its] assets are managed to help ensure that the environmental and social issues associated with the manufacture and supply of [its] key infrastructure are appropriately considered and the risks and impacts suitably mitigated”.

In particular, the Company’s Human Rights Policy, Sustainable Procurement Policy, and Supplier Code of Conduct were developed to strengthen and communicate the Company’s requirements for its suppliers in relation to human rights. During the reporting period, adherence to these policies has been embedded into new contractual arrangements with key service providers (namely Engineering, Procurement and Construction (EPC) contractors, Operation & Maintenance (O&M) contractors, and Asset Management service providers).

The Company also continues to roll-out its Supplier Code of Conduct to a broader subset of its suppliers, taking a spend based approach. The number of suppliers that have signed the Supplier Code of Conduct is tracked via a KPI within the Company’s ESG strategy. The Company reports against this KPI annually, as part of its ESG disclosure within its Annual Report. As of 30 June 2024, the Company’s Supplier Code of Conduct had been signed by 30 of the Company’s Tier 1 suppliers (i.e., those directly engaged by the Company).

During the reporting period, the Company engaged its Investment Adviser to also adopt a Supplier Code of Conduct, which would enable the Company to cascade its expectations and standards onto a further subset of its supply chain. Consequently, the Bluefield group of companies (incorporated in the UK) adopted a Supplier Code of Conduct in H1 2024. As of 30 June 2024, this had been signed by 22 of Bluefield’s Tier 1 suppliers (i.e., those directly engaged by Bluefield).

Over the coming year, the Investment Adviser will continue to support the Company to appropriately disseminate these policies and continue to embed the requirements and principles within them across the Company’s operations and where appropriate, within its supply chain.

ESG considerations, including in relation to human rights and modern slavery, continue to be integrated into the Company’s investment processes. Pre-investment, human rights due diligence is applied during the acquisition process, concentrated upon the working practices of contractors connected to assets under consideration. This includes the existing O&M contractor’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws, internationally accepted norms and standards, as well as the presence of formal grievance mechanisms. Legal checks are also undertaken on key counterparties to ensure that they are reputable, particularly as regards to checks on anti-money laundering, anti-bribery and anti-corruption, and sanctions

Examples of the Company’s current human rights due diligence processes include:

• Comprehensive ESG due diligence undertaken on key third parties, namely EPC and O&M contractors, as part of transactions.
• External ESG risk analysis conducted on key solar and battery manufacturers.
• Social audits requested for solar PV panel manufacturing facilities as part of EPC engagements.
• Supply chain traceability information requested from solar and battery manufacturers as part of EPC engagements.
• Enhanced contractual protections and requirements within key legal agreements, such as EPC and O&M contracts.
• Adoption and roll out of the Company’s Supplier Code of Conduct.

The Company recognises that human rights due diligence is an ongoing process, where stakeholder engagement is important at each step. Since adopting its Human Rights Policy in June 2023, focus has since turned to implementation of the policy principles. As part of this, during the reporting period, the Company engaged a third-party consultant to review its human rights due diligence processes. Key stages of the project included:

• Identification of key stakeholder groups where human rights due diligence should be focused.
• High-level risk assessment of human rights risk for each of these stakeholder groups, informed by a risk workshop attended by representatives from the Company’s key service providers (who are involved at different stages of the asset lifecycle). The result was the identification of high priority risks and the potential impact of each on rightsholders.
• Environmental & social risk analysis on the Company’s top 20 suppliers (following a spend based approach).
• Review of the Company’s current human rights KPIs; and
• Review of the Company’s human rights communication processes.

This analysis led to the creation of recommendations and actions, where needed, tailored to the different stages of the asset lifecycle (e.g. development, construction and ongoing operation). The Company has mapped mitigations currently taken against identified risks, and steps required to further advance its due diligence approach. The Company will use the results of this analysis to monitor and update its human rights due diligence processes, where appropriate, across the portfolio.

5.1 Risk Assessment

ESG risks are integrated into the Company’s overarching risk management processes. For further information on the Company’s key risks, and the controls and mitigations in place for these, please refer to the 2024 Annual Report.

Supply chain risk has been identified as a principal and emerging risk by the Board of the Company. As stated, the Company is aware of the human rights and modern slavery risks associated with some renewable technology supply chains and is committed to building robust identification and management processes in this area. Though the Company does not yet undertake direct large-scale procurement, it has due diligence processes in place in relation to the EPC contractors it engages. This helps the Company identify any material ESG risks associated with the EPC contractor itself, or in relation to the key equipment they are procuring on its behalf (namely PV panels or battery storage systems).

To better understand the principal environmental and social risks relating to its suppliers, the Company maps its Tier 1 (i.e., those directly engaged by the Company) suppliers annually. Following a spend based approach, the Company undertakes a desktop environmental and social risk analysis on the top 20 suppliers; this exercise may be outsourced to an external consultant as required. During the reporting period, a more comprehensive risk assessment framework was developed, which incorporated country risks ratings in conjunction with recognised standards, such as the SASB materiality map. Annual supplier mapping and subsequent risk analysis helps the Company to identify upstream risk and improvement opportunities.

A desktop environmental and social risk analysis has also been performed previously on battery and solar PV manufacturers whom the Company, through its EPC contractors, may consider procuring from.

5.2 Risk Management

The Company is committed to building robust management and due diligence practices, aligned with global frameworks. As stated, the Company has adopted a Human Rights Policy and Sustainable Procurement Policy, which strengthen the Company’s requirements for its suppliers and contractors. Adoption of policies, and the cascade of the requirements within them, should help the Company to benefit from ethical supply chains over the long-term.

The Company’s Supplier Code of Conduct sets out the Company’s principles, rules of engagement, and what is expected from suppliers in terms of responsible business conduct and preventing child labour and modern slavery. It is the Company’s intention that its suppliers will acknowledge and adhere to the Company’s Supplier Code of Conduct, and work with the Company to identify risks, areas of improvement, and follow up agreed actions. Adherence to the Company’s Supplier Code of Conduct is a contractual requirement for key suppliers.

Post-investment, matters relating to human rights and supply chain are managed as part of the Company’s overarching ESG framework. Activities to advance the Company’s approach to human rights, such as the human rights due diligence review previously described, are considered as part of the annual review of the Company’s ESG commitments and KPIs. This supports the Company in improving its human rights risk identification and management processes over time.

Representatives of the Investment Adviser and other Bluefield service providers are active participants in trade body working groups. Engaging with industry working groups enables the Investment Adviser to inform and contribute to best practice, stay abreast of market developments, and support industry response to challenges which arise during the transition to net zero. The Investment Adviser supports the UK solar energy industry’s response to the concerns of forced labour, which condemns and opposes any abuse of human rights, including forced labour, anywhere in the global supply chain. The UK solar industry’s supply chain statement, to which the Investment Adviser is a signatory, can be viewed here .

The Investment Adviser will continue to remain abreast of the industry response to ESG topics, such as human and labour rights issues, and look to integrate recommendations from these to further develop its own approach to managing these risks.

During the reporting period, the Company offered a webinar for those suppliers being asked to sign the Company’s Supplier Code of Conduct for the first time, explaining the purpose of the Code, the key principles within it, and the impact on suppliers. Moreover, it provided a forum through which concerns could be raised and discussed.

As part of the Company’s commitment to further developing its due diligence mechanisms to identify, prevent and mitigate human rights impacts across its operations and, where possible, its supply chain, training requirements relating to both the Board of the Company and the Company’s key service providers (i.e., the Bluefield companies) will be reviewed over the coming year.