Responsible Supply Chain

Responsible Supply Chain Overview

NextEnergy Capital (NEC) is on a mission to contribute to a more sustainable future by leading the transition to clean energy. Ensuring an ethical and responsible solar supply chain is fundamental to this mission. We are committed to being at the forefront of efforts to proactively promote sustainable sourcing within the solar industry.

Since 2021, media and research reports have highlighted the risk of human rights abuses in our supply chains. But unravelling the complexity of the sector’s supply chain requires considering broader environmental and governance topics too. To this extent, NEC has developed a robust and holistic responsible sourcing approach which is based on the three principles set out below. For more details about each one, please refer to our Responsible Supply Chain Sustainability document.

  1. Ensuring our supply chain policies meet and exceed relevant national and international standards: NextEnergy Capital respects fundamental social and human rights principles and opposes any form of slavery or forced labour. We expect the same from all of our business relationships, including across the supply chain. NEC publicly commits to the highest supply chain standards – our sustainability policies are aligned with the requirements of international ESG performance standards, such as the UN Guiding Principles on Business and Human Rights (UNGP) and the OECD Guidelines on Multinational Enterprises (OECD MNE) – and include a Code of Conduct for Suppliers which we expect all our business partners to abide by. NEC is also a signatory of key anti-forced labour pledges in the solar industry, such as Solar Energy UK’s Supply Chain Statement.
  2. Carrying out comprehensive due diligence, and detailed engagement with our supply chain partners to increase the traceability and visibility of our supply chain, including upstream impacts on nature: NextEnergy Capital has developed a dedicated internal approach to supply chain risk management; it is fully integrated into the investment process and benefits from a proprietary solar PV module supplier assessment tool. The tool was updated in 2023/24 to also assess battery energy storage system suppliers and continues to evolve to consider other key components, as relevant. Every potential transaction is assessed for supply chain risk across technologies in NEC’s portfolio, including solar PV modules and battery energy storage systems. The assessment forms only one part of the pre-investment due diligence process. When a supplier cannot meet NextEnergy Capital’s standards, NEC initially seeks to engage to influence the supplier’s approach and operations. NextEnergy Capital will not knowingly invest in an asset where suppliers cannot meet its standards. NEC’s rigorous due diligence process enables us to support the solar industry to advance supply chain sustainability by feeding into the development of emerging supply chain best practice.
  3. Supporting industry action to drive best practice, and learning from other supply chain experts: Responsible sourcing requires cross-sector engagement. NextEnergy Capital is at the heart of relevant industry initiatives, notably the Solar Stewardship Initiative (SSI), a major supply chain achievement of which NextEnergy Capital is a founding sponsor and supporter. More details about the SSI; NEC’s strategic, operational and financial input; and the involvement of its Head of ESG, Giulia Guidi, can be found here. In April 2024, one of NEC’s ESG Analysts was also appointed to the SSI’s Traceability Technical Working Group. NEC has been at the forefront of industry debate on supply chains and participates in external research on responsible procurement in solar wherever possible. A case in point is NEC’s involvement in Action Sustainability’s project to develop international responsible sourcing guidance for solar panel buyers.

NextEnergy Capital’s teams have extensive experience across sustainable construction, procurement, and investment decision-making. The rapid increase in the number of ESG experts and other team members focused on sustainable procurement will ensure that NEC delivers on its supply chain commitments. Internally, NextEnergy Capital’s ESG, investment, construction and procurement, and portfolio management teams work closely to ensure that supply chain sustainability is considered through the lifecycle of NextEnergy Capital’s assets. Externally, these teams actively collaborate with a variety of stakeholders because driving supply chain best practice demands nothing less of us.

For our full Responsible Supply Chain approach, please click here. We review this approach on a regular basis, and update it accordingly.

We acknowledge that end-to-end supply chain traceability and full transparency are challenges which will take time to overcome. However, we are confident that NextEnergy Capital’s Responsible Supply Chain commitments put us in a strong position to accelerate the wider solar industry’s journey to achieve sustainable and ethical sourcing globally.