It was NextEnergy Capital (NEC)'s due diligence and resultant mitigation of negative impacts that impressed the IMPACT awards judges.
The specialist solar energy investment and asset manager largely invests in the long-term ownership of operating solar power projects across Organisation for Economic Co-operation and Development (OECD) markets
Launched in 2018, NextPower III ESG (NPIII ESG) is NEC's third institutional solar fund.
NEC performs due diligence to ascertain that it is not engaging in any 'excluded activities'. It analyses deviation from the IFC Performance Standards and, where applicable, the Equator Principles, the OECD Guidelines of Multinational Enterprise and the UN Guiding Principles on Business and Human Rights.
Acting on deviation from these standards can include engagement with the solar asset seller or contractor, or not investing at all.
When looking at a potential acquisition in Chile, NEC discovered that the land adjacent to the solar assets was likely to be contested by the local Indigenous communities and no clear evidence of contact being made with the community had been provided.
NEC went back to the seller and requested that they provide a document outlining the consultation process, including evidence of their communication process and documentation of all engagements with the community leader, before proceeding with the project acquisition.
"While most of the companies only highlight the positive aspect, it is essential to address the risk of negative impact, as the nominee takes into account the impact on indigenous people," one judge commented.
NEC is also preparing a biodiversity offsetting plan for two assets in Chile.
NPIII ESG has acquired 112 solar assets to date, increasing its portfolio in the US, Latin America, Europe, and India. Totalling 1.2 gigawatts of solar power, NEC expects its assets will help avoid 318 kt carbon dioxide equivalent (CO2e) a year of greenhouse gas emissions.
According to NPIII ESG's 2021 Green Impact Report, 189 kt CO2e were avoided that year, compared with 72 kt CO2e in 2020.
In its impact reports, NEC uses the UN Sustainable Development Goals (SDGs) as the underlying framework to identify, manage and measure impact on the environment and society.
NPIII ESG is classified as a Sustainable Finance Disclosure Regulation Article 9 fund under EU legislation due to its contribution to climate change mitigation.