JLEN
JLEN
 

Whilst directly applicable to companies incorporated in the UK, the Board recognises the intention of the AIC Code that matters set out in Section 172 of the Companies Act 2006 are reported upon. The Board strives to understand the views of the Company’s key stakeholders and to take these into consideration as part of its discussions and decision‑making process.

As an investment company, the Company does not have any direct employees and conducts its core activities through third-party service providers. Each provider has an established track record and through regulatory oversight is required to have in place suitable policies and procedures to ensure they maintain high standards of business conduct, and employ corporate governance best practice.

The Board strongly believes that fostering healthy and constructive relationships with its broad range of stakeholders and taking into consideration their respective interests as part of its decision-making process should result in increased shareholder value over the long term.

JLEN’s principal stakeholders comprise of shareholders, the Investment Manager, commercial service providers, asset-level counterparties, local communities and debt providers. Pages 35 to 37 in the Annual Report 2022 explains why and how the Company engages with these stakeholders and the actions taken by it to ensure their interests are understood and considered in the Board’s strategic decision making. These relationships are considered fundamental to the Company’s sustainability and are monitored carefully by the Board.

JLEN recognises that community engagement at our sites is an ongoing process and that at times problems can arise before we can address them; however, it is our stated objective to develop positive relationships with the communities in which we work. Improving our communications, complaints handling processes and access to relevant information for local residents is an ongoing process, and these goals have formed part of our ESG KPIs.

CASE STUDY

Stakeholder engagement on the topics of sustainability and climate change

During the year under review, efforts have been made to engage more proactively with key stakeholders on topics relating to sustainability and climate change.

The Investment Manager engaged with its key counterparties – external asset managers and operations and maintenance providers – on a wide range of sustainability topics, including biodiversity initiatives, scope 2 emissions, health and safety initiatives and community engagement procedures.

This resulted in increased uptake of biodiversity initiatives across the solar portfolio and websites being developed for some of the assets that did not have them in the wind and solar portfolios, to help drive community engagement. Conversations around switching to renewable energy providers were also undertaken and scope 2 emissions data was collected for the first time as part of the Company’s TCFD disclosure, which can be found on pages 49 to 67 of the annual report 2022.

Further engagement was undertaken by the Investment Manager internally, with several best practice sessions on the collection of ESG KPIs held for the asset managers. Individual sessions on climate‑related risks to the Company’s assets were held between each portfolio asset manager and members of the sustainability team to identify climate‑related risks and mitigation strategies. The outcome of this engagement can be found in the Strategy and Risk section of the TCFD disclosure on pages 54 to 65 of the annual report 2022.

Our stakeholders

Click on a stakeholder to read more

Shareholders

Rationale

Providers of equity finance and recipients of income distributions.

Key stakeholders

  • Retail investors
  • Institutional investors
  •  Private client and wealth managers
  • Investor platforms
  • Pensions and insurance providers
  • Proxy voting
    organisations

How has JLEN communicated and engaged in 2021/22?

  • Annual general meeting
  • Regular market announcements
  • Investor communications including quarterly factsheets
  • Dedicated JLEN website
  • Investor roadshows hosted via video conference
  • Views and feedback sought from institutional shareholders via corporate broker
  • Investor research notes produced by QuotedData and frequent articles across traditional print and social media

Key strategic decisions impacting stakeholder group during period 2021/22

  • Declared an increased dividend target of 6.80 pence in line with investment objective, continuing to position JLEN as an attractive proposition for investors seeking income
  •  Made three portfolio acquisitions which further diversified the portfolio and should prove accretive to NAV in the long term
  • Successful completion of the first asset divestment since launch, achieving a marked uplift to the last internal valuation
  • Formation of a dedicated ESG Committee to develop and monitor the Company’s sustainability and ESG strategies

Investment Manager

Rationale

Key counterparty responsible for delivering the Board’s strategy.

Key stakeholders

  • Foresight Group
  • Foresight Group employees

 

How has JLEN communicated and engaged in 2021/22?

  • Regular Board meetings in Guernsey and via video conference during the period attended by key investment personnel
  • Comprehensive assessment of the contractual relationship with the Investment Manager and their performance
  • Consulting on proposals and the parameters for delegated authority to take investment decisions
  • Monitoring and assessing JLEN’s strategic position within
    the growing environmental infrastructure market and the expected future development of the market
  • Fortnightly calls with the Investment Manager to discuss operational matters and investment opportunities under consideration

Key strategic decisions impacting stakeholder group during period 2021/22

  • Determination that the Investment Manager maintains a robust internal control environment, and that the continued appointment of the Investment Manager is in the best interests of shareholders as a whole
  • Agreed the framework for Foresight’s discretionary investment mandate and the relevant criteria for escalation, creating an efficient decision making framework better suited to the continued growth of the portfolio and the ongoing relationship with Foresight

Commercial service providers

Rationale

Providers of essential business support services.

Key stakeholders

  •  Administrator & Company Secretary
  • Corporate broker
  • Legal advisers
  • Public relations agency
  • Auditor and tax advisers
  • Independent valuation specialists

How has JLEN communicated and engaged in 2021/22?

  • Regular scheduled update calls as well as specific interactions on corporate actions and new portfolio acquisitions
  • Collaboration with multiple service providers in publication of annual and interim reports
  • Annual service provider questionnaire
  • Consulting on regulatory, governance, accounting and taxation matters

Key strategic decisions impacting stakeholder group during period 2021/22

  • Key service providers retained, providing continuity of service and familiarity with the objectives of the Company

Asset-level counterparties

Rationale

Asset-level technical and operational management service providers.

Key stakeholders

  • Operations & Maintenance (“O&M”) contractors
  • External management services (“MSA”) providers
  • Supply chain counterparties
  • Landowners

How has JLEN communicated and engaged in 2021/22?

  • Regular update calls with O&M and MSA providers to ensure adequate oversight of portfolio operations
  • Focused engagement on value enhancement opportunities, including rationalisation of service provision for cost savings and/or improved services
  • Increased scrutiny of, and resource allocation to, emerging risks identified

Key strategic decisions impacting stakeholder group during period 2021/22

  • Consolidation of insurance services at SPV level across parts of the portfolio
  • Acquired three new assets during the period, increasing ongoing servicing requirements from O&M counterparties
  • Entered a number of new
  • technology types over the period, including standalone battery storage and low carbon transport
  • Successful further upgrade of capacity at Vulcan AD site resulted in increased revenue

Local communities

Rationale

Members of society living within a proximity of assets where the Company’s operations may have an impact, whether positive or negative.

Key stakeholders

  • Local authorities and agencies
  • Community funds
  • Landowners
  • Local environment
  • Local residents

How has JLEN communicated and engaged in 2021/22?

  • Frequent engagement with local authorities and other regulators to ensure safe and compliant operation of our assets
  • Actively engage with local authorities on construction planning and obtaining necessary planning permissions
  • Regular interaction between the owners of land on which our assets operate and the Investment Manager’s asset management team
  • Conduct educational site visits for local community schools and colleges

Key strategic decisions impacting stakeholder group during period 2021/22

  • JLEN donated over 418k to local community funds over the period, helping to address local needs and promote long-term sustainable and prosperous communities

Debt providers

Rationale

Providers of long-term debt to finance the acquisition of investment opportunities.

Key stakeholders

  • Banks
  • Lenders
  • RCF agent

How has JLEN communicated and engaged in 2021/22?

  • Regular updates provided on covenant compliance and current positioning

Key strategic decisions impacting stakeholder group during period 2021/22

  • Regular updates provided on covenant compliance and current positioning
  • Consulted on the incorporation of ESG metrics into the interest margin and commitment fee payable on the revolving credit facility

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