THIRD PARTY INTERACTIONS
As part of our due diligence process, key counterparties must first be analysed, evaluated and scored to be in line with the Sustainability Evaluation Criteria. On a project that may be heavily reliant on contractors, Foresight warrants their competency and strength. In order to derive this score, the team looks at the following criteria;
- Compliance with laws: Are the key counterparties compliant with local and international laws, including environmental, health and safety laws and employment laws?
- Key counterparty supply chain: Are steps taken to provide reasonable assurance that there is no labour standards, health and safety laws and employment laws?
- Reputational risk: Is there a risk of reputational damage or litigation? Do the project’s key subcontractors comply generally with Foresight’s sustainable investing criteria?
Port of Tyne – Samsung and Battery Procurement
Foresight acquired Port of Tyne, a 35MW battery storage facility, in June 2017 in a successful bid from the National Grid’s EFR Auction process.
All five pillars of the Foresight Sustainability Evaluation Criteria are applicable:
- The plant enables a higher proportion of renewables to be connected to the national grid
- The project is emission free
- A community consultation was carried out
- A structured board was appointed with ESG monitoring
But most notably in terms of ‘Third Party Interactions’ it is Foresight’s choice to partner with Samsung as a battery supplier.
Recently the issue of responsible battery procurement has caused concern around social issues resulting from the ‘technical revolution of non-fossil fuels.’ Samsung has a responsible procurement in place, ensuring the sourcing of their cobalt avoids social issues such as corruption, environmental pollution, extreme poverty and child labour, issues that are not uncommon in the Democratic Republic of Congo. Samsung has appointed signatories who are obligated to ensure the miners they work with adhere to guideline of responsible acquisition in conflict areas. This includes certifying there is no human right abuse like child minors and deadly working conditions. These guidelines go beyond to include efforts of a blockchain pilot scheme to track the origins of cobalt.
Supply chain best practice
Samsung was carefully chosen as a reputable supplier with controls in place for the mineral extraction of batteries. Foresight strives to guarantee that all data is collected on third parties, analysis and breaches under local laws, best practice policies, key counterparties and the best practice to supply chain.