Cheaper, cleaner & more reliable energy solutions
Energy efficiency involves the delivery of cheaper, cleaner and more reliable energy solutions at the point of use, reducing or eliminating reliance on the grid or subsidies. This can be achieved for commercial, industrial and public buildings through on-site energy generation, such as combined heat and power units and roof-top solar installations, or through energy demand reduction measures, such as efficient lighting, heating and cooling solutions and also through effective use of energy storage solutions. A substantial and rapidly growing marketplace has emerged for energy efficiency solutions, providing SEEIT with an attractive growth sector in which to invest.
Owns and manages a diverse portfolio of energy efficiency and distributed energy generation assets
Invests in proven operational projects that deliver energy for commercial, industrial and public sector buildings
Finances or refinances energy efficient assets and equipment
Acquires portfolios, platforms or individual assets
Invests for the long-term, with a focus on optimising and improving assets
Finances the roll-out of energy efficiency solutions at scale
Our investment policy
- SEEIT’s investment objective is to generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth.
- SEEIT achieves this through investing principally in a diversified portfolio of energy efficiency projects with high-quality counterparties.
- The contracts governing these energy efficiency projects entitles SEEIT to receive stable, predictable cash flows once the energy efficiency projects are operational.
- SEEIT invests and manages its energy efficiency projects with the objective of assembling a high quality, diversified portfolio with respect to technology, manufacturer and public and private sector Counterparties.
- Whilst SEEIT invests predominantly in operational energy efficiency projects, under certain circumstances SEEIT may invest in projects which are at the development or construction phase or, to a limited extent, in developers, operators or managers of energy efficient projects.
- SEEIT initially focussed its attention on investing in the UK. However, over time, SEEIT has made, and may continue to make, investments in continental Europe, North America and the Asia Pacific region.
- In pursuing its investment policy, the Company will seek to target sustainable investments, for example, by investing in projects that contribute to greenhouse gas (“GHG”) emission reductions.
- No energy efficiency project investment by SEEIT will represent more than 20 per cent. of gross asset value, calculated at the time of investment.
- The aggregate maximum exposure to any Counterparty will not exceed 20 per cent. of gross asset value, calculated at the time of investment;
- The aggregate maximum exposure to energy efficiency projects in either a development phase or construction phase will not exceed 35 per cent. of gross asset value, calculated at the time of investment, provided that, of such aggregate amount, the aggregate maximum exposure to energy efficiency projects in a development phase will not exceed 10 per cent. of gross asset value, calculated at the time of investment;
- The aggregate value of the Company’s investments (calculated at the time of investment) in developers, operators or managers of Energy Efficiency Projects that are not made at the same time as an investment by the Company in an associated Energy Efficiency Project will not exceed 3 per cent. of Gross Asset Value (with such 3 per cent. limit being included in the 10 per cent. limit on exposure to Energy Efficiency Projects in a development phase); and
- SEEIT will not invest in other UK listed closed-ended investment companies.
- SEEIT will maintain a conservative level of aggregate gearing in the interests of capital efficiency, in order to seek to enhance income returns, long term capital growth and capital flexibility. SEEIT’s target medium term gearing will be up to 35 per cent. of net asset value, calculated at the time of borrowing (the ‘‘Structural Gearing’’).
- SEEIT may also enter into borrowing facilities on a short term basis to finance acquisitions (‘‘Acquisition Finance’’), provided that the aggregate consolidated borrowing of SEEIT and the project special purpose vehicles (“SPV’s”), including any Structural Gearing, shall not exceed 65 per cent. of net asset value, calculated at the time of borrowing. SEEIT would intend to repay any Acquisition Finance with the proceeds of a Share issue in the short to medium term.
- Structural Gearing and Acquisition Finance will be employed either at the level of SEEIT plc, at the level of the relevant project SPV or at the level of any intermediate wholly owned subsidiary of SEEIT, and any limits shall apply on a consolidated basis across SEEIT, the project SPVs and such intermediary holding company. It is expected that Structural Gearing and Acquisition Finance will primarily comprise bank borrowings, though small overdraft facilities may be utilised for flexibility in corporate actions.
Currency and hedging policy/ Use of derivatives
- SEEIT may use derivatives for efficient portfolio management but not for investment purposes. In particular, SEEIT may engage in full or partial interest rate hedging or otherwise seek to mitigate the risk of interest rate increases and full or partial foreign exchange hedging to mitigate the risk of currency inflation.
- SEEIT will only enter into hedging contracts and other derivative contracts when they are available in a timely manner and on terms acceptable to it. SEEIT reserves the right to terminate any hedging arrangement in its absolute discretion.
- Whilst it is the intention of SEEIT to be fully or near fully invested in normal market conditions, SEEIT may hold cash on deposit and may invest in cash equivalent investments, which may include short term investments in money market type funds and tradeable debt securities (‘‘Cash and Cash Equivalents’’).
- There is no restriction on the amount of Cash and Cash Equivalents that SEEIT may hold and there may be times when it is appropriate for SEEIT to have a significant Cash and Cash Equivalent position instead of being fully or near fully invested.
Changes to investment policy
- No material change will be made to SEEIT’s investment policy without the prior approval by ordinary resolution of shareholders.
What is energy efficiency?
Learn about how we approach, and
solve the issue of energy inefficiency
SEEIT has established Environmental, Social and Governance (ESG) principles which have a positive impact throughout its portfolio of investments.
SEEIT actions positively impact the environment by reducing the amount of carbon dioxide produced and increasing the amount of renewable energy generated.
SDCL, as investment manager to SEEIT, is a signatory to the United Nations Principles for Responsible Investment (UNPRI).
SEEIT’s Responsible Investment Investment Policy is available here.
SEEIT’s ESG Principles are available here.
SEEIT’s ESG Report for the year to 31 March 2020 is available here.
SEEIT has been awarded the Green Economy Mark from the London Stock Exchange. The Green Economy Mark identifies London-listed companies and funds that generate between 50% and 100% of total annual revenues from products and services that contribute to the global green economy.
Aiding the transition to a low carbon economy
SEEIT, through its investments, will aid the transition to a low carbon economy through:
- the deployment and/or operation of ‘Best Available Technology’1 equipment and lower carbon
solutions (measured through kWh saved or other applicable system efficiency improvements
- Utilisation of waste gases or other waste (measured through tonnes of waste utilised); and
- Minimising resource usage (measured through resource saved or avoided)
SEEIT will support the achievement of net zero carbon targets through reduced greenhouse gas
emissions (measured through kgCO2 saved).
- the deployment and/or operation of ‘Best Available Technology’1 equipment and lower carbon
Minimising environmental footprint
Through its Investment Manager SEEIT will seek to minimise the environmental footprint of its investments through:
- Ensuring projects and O&M Providers operate in compliance with applicable local and national laws (as a minimum), but moreover seek leading practice substantially beyond minimum legal requirements. This includes both environmental and planning regulations (including requirements of the EU Environmental Impact Assessment Directive and the preparation of Environmental Impact Statements, as applicable);
- Monitoring, measuring and minimising through mitigating actions, the likely risk and impact of environmental damage resulting from the project, considering waste, biodiversity loss, air quality, and emissions;
- For construction projects, ensuring the sourcing and use of sustainable materials to the extent possible, and incorporating best practice procurement requirements to minimise the depletion of rare earth minerals, or other non-replenishable materials; and
- Maximising resource use through the successful extension of project life.
Robust governance and business integrity
SEEIT will adhere to the highest standards of corporate governance practice in its investments through engaging with its Investment Manager, O&M Providers and other service providers to SEEIT to ensure they:
- Comply with all applicable laws and promote international best practice, including those laws and international best practice standards intended to prevent extortion, bribery and financial crime;
- have a clearly defined and transparent governance and management structure with effective procedures, controls and checks and balances in place;
- deal with any regulators in an open and co-operative manner;
- use effective systems of internal control and risk management covering all significant issues, including ESG issues;
- have suitable policies and a code of conduct on key business integrity matters such as bribery and corruption, gifts, anti-money laundering, extortion, financial crime, privacy and use of confidential information and the upholding of high standards of integrity and honesty grounded in sound business ethics, as well as the management systems required to successfully implement such policies and evaluate and report on compliance;
- demonstrate a commitment to a zero-tolerance approach for any unethical practices;
- have a robust process for assessing, monitoring and mitigating risks arising from climate change which may impact the project or its operation.
Safe and healthy environment
Through its Investment Manager SEEIT will ensure that all people who come into contact with its project investments encounter a safe environment and are protected from harm when using or operating its projects, through:
- compliance with all applicable local and national laws (as a minimum);
- ensuring safe working conditions (measured through the number of notifications for RIDDOR events (‘Reporting of Injuries, Diseases and Dangerous Occurrences Regulations’) or equivalent, for international investments);
- requiring prompt notification of any RIDDOR or equivalent event to SDCL as investment manager, and by SDCL to SEEIT, followed by a full report based on a comprehensive investigation of the event, including mitigating actions and other actions required to prevent reoccurrence, should be issued as soon as practical;
- establishing robust critical incidence response plans, and ensuring that employees are trained on critical incidence response processes;
- monitoring and resolving promptly any complaints in relation to the operation of the projects received from the local community.
SDCL will provide a consolidated report on RIDDOR events and community complaints for each SEEIT Board Meeting, which the Board will review and challenge together with agreeing any appropriate mitigating actions to be taken.
SEEIT will also promote fair and decent employment by engaging with its Investment Manager, O&M Providers and other service providers to SEEIT to promote and, where applicable, require adherence to the following standards both themselves and within the supply chain of SEEIT’s projects:
- not to employ or make use of forced labour of any kind;
- not to employ or make use of child labour;
- to pay wages which meet or exceed industry or legal national minima (including any prevailing ‘living wage’ standards);