Important information

Responsible Investment Policy

Dated 29 March 2024

Gore Street Energy Storage Fund believes that responsible corporate governance practices and consideration of environmental and social factors are important contributors to the creation of long-term shareholder value. It has developed a Responsible Investment Policy to guide its approach to responsible investing, ESG integration and reporting.

SFDR Website Disclosure for Financial Products That Promote Environmental or Social Characteristics

Dated: 27 October 2023
Last reviewed date: 31 October 2024

Summary

The environmental characteristics promoted by the fund are the provision of support for the green energy transition and climate change mitigation efforts.

Gore Street Energy Storage Fund invests in utility-scale energy storage systems. These assets support the transition to a low-carbon, sustainable economy through:

• Avoiding carbon emissions from the power sector;
• Enabling the integration of renewable energy sources into the power grid.

Gore Street Energy Storage Fund promotes environmental characteristics but does not have sustainable investment as its objective. The investment objective of the fund is to provide investors with a sustainable and attractive dividend over the long term by investing in a diversified portfolio of utility-scale energy storage projects, currently in the UK, Republic of Ireland, Germany, and the US. In addition, the fund seeks to provide investors with an element of capital growth through the re-investment of net cash generated in excess of the target dividend.

The following elements of the investment strategy are binding on all investments considered, selected and held by the fund:

• In consequence of the fund's very limited permitted investment class, the fund will only invest in utility-scale energy storage projects, all of which are expected to contribute to the chosen environmental characteristics. Further, the fund intends to invest with a view to holding the energy storage assets until the end of their useful life.
• The fund excludes investments in companies focused on the extraction of fossil fuels.

100% of the investments are currently allocated to battery energy storage systems. Where the fund has raised capital, upon receipt of such capital and prior to its deployment into investment projects in accordance with the fund’s investment strategy, such new capital will comprise cash and cash equivalents.

The Investment Manager monitors the environmental characteristics promoted by the fund and the sustainability indicators annually and assesses any required actions. Methodologies to measure the environmental characteristics promoted by the fund have been developed with a third-party sustainability consultant and are detailed in the relevant section below.

• Net CO₂ emissions avoided - The approach is based on a comparison between a scenario where the fund’s battery storage assets provide services to the grid, and a second, hypothetical scenario, where the fund’s battery storage assets are not in use.
• Total renewable electricity stored – The total renewable electricity stored is calculated using the proportion of import energy from renewables for each asset, summed across the portfolio and reported on an annual basis.

The data for the sustainability indicators are collected by the Investment Manager and processed by a third-party sustainability consultant. The main limitation of the methodology for net CO2 emissions avoided is the simplified assumption that the electricity dispatched by the Company’s assets at peak times substitutes electricity generated by gas-fired peaking plants. For total renewable electricity stored, there is an opportunity to standardise grid mix data (which is currently provided on a half-hourly, hourly, monthly and annual basis, depending on the system operator).

The Investment Manager, who manages the assets on the fund’s behalf, has put in place policies and procedures to ensure responsible business conduct. These include due diligence processes and internal training covering issues including bribery, corruption, money laundering and cybersecurity. Good governance practices are also assessed as part of the monitoring of the principal adverse impacts of the fund, specifically in relation to biodiversity, pollution, waste, and human rights.

Due to the nature of the fund, engagement is not part of the investment strategy. The fund does not designate a reference benchmark.

No sustainable investment objective

This financial product promotes environmental or social characteristics but does not have sustainable investment as its objective.

Environmental or social characteristics of the financial product

The environmental characteristics promoted by the fund are the provision of support for the green energy transition and climate change mitigation efforts.  

Gore Street Energy Storage Fund invests in utility-scale energy storage systems. These assets support the transition to a low-carbon, sustainable economy through:

• Enabling the integration of renewable energy sources into the power grid;
• Avoiding carbon emissions from the power sector.

The fund’s assets contribute to grid frequency stability in times of variation or system imbalance and help to balance electricity demand and supply. These imbalances have traditionally been met by increased production from fossil fuel-fired peaker plants, causing additional carbon emissions. By storing electricity from renewables when supply exceeds demand, the fund’s energy storage facilities prevent their curtailment and allow these clean energy sources to contribute a greater proportion of electricity.

By enabling a higher penetration of renewable energy sources into grids and avoiding power-related carbon emissions, the fund’s investments support the green energy transition and climate change mitigation efforts.

Investment strategy

a)  Investment strategy used to meet the environmental or social characteristics promoted by the financial product

The investment objective of the fund is to provide investors with a sustainable and attractive dividend over the long term by investing in a diversified portfolio of utility-scale energy storage projects. These projects are located in the United Kingdom, the Republic of Ireland, Germany and the United States of America, although the fund may also consider projects in other jurisdictions in accordance with the fund’s investment policy. In addition, the fund seeks to provide investors with an element of capital growth through the re-investment of net cash generated in excess of the target dividend in accordance with the fund’s investment policy.

The following elements of the investment strategy are binding on all investments considered, selected and held by the fund.

Positive screening: In consequence of the fund's very limited permitted investment class, the fund will only invest in utility-scale energy storage projects, all of which are expected to contribute to the chosen environmental characteristics. Further, the fund intends to invest with a view to holding the energy storage assets until the end of their useful life.

Negative screening: The fund excludes investments in companies focused on the extraction of fossil fuels. For other exclusions less relevant to this disclosure please refer to the fund’s exclusion policy, which can be obtained on demand.

b)  Policy to assess good governance practices of the investee companies, including with respect to sound management structures, employee relations, remuneration of staff and tax compliance

The fund invests in energy storage projects that sit within special purpose vehicles which do not have management structures, employee relations, staff, or tax policies in the way “investee companies”, as understood by the SFDR, might have.

The Investment Manager, who manages the assets on the fund’s behalf, has put in place policies and procedures to ensure responsible business conduct. These include due diligence processes and internal training covering issues including bribery, corruption, money laundering and cyber security.

Good governance practices are also assessed and monitored as part of the fund’s consideration of the principal adverse impacts on sustainability factors.

Proportion of investments

The fund currently only invests in battery energy storage systems, with the remainder of the fund’s resources held in cash.

• Investments: 100% of the investments are allocated to battery energy storage systems, which are used to meet the environmental characteristics promoted by the fund. Investments are made in systems already operational as well as in projects under construction or in the pre-construction phase, as per the tables below.
• Cash: Where the fund has raised capital, upon receipt of such capital and prior to its deployment into investment projects in accordance with the fund’s investment strategy, such new capital will comprise cash and cash equivalents. The fund’s cash balance as of 31 March 2024 was £60.7m, representing 11% of the fund.

The fund enters into hedging arrangements in relation to currency, interest rates and/or power prices for the purposes of efficient portfolio management as appropriate to seek to manage its exposure to foreign currency risks associated with capital expenditure, interest rate risk and risks relating to power prices. The fund will not enter into derivative transactions for speculative purposes.

Monitoring of environmental or social characteristics

The Investment Manager monitors the environmental characteristics promoted by the fund and the sustainability indicators. The data is collected annually to calculate the metrics and assess where actions might be required.

Methodologies for environmental or social characteristics

Methodologies and appropriate data sources to measure the environmental characteristics promoted by the fund have been developed with a third-party sustainability consultant and are as follows:

1. Net CO₂ emissions avoided (tCO₂e): This metric is calculated using hourly, half-hourly and quarter-hourly battery charging data from the Company’s assets and information on the corresponding grid carbon emissions factors obtained from the electricity transmission system operators in Great Britain (GB), Northern Ireland (NI), Ireland (IE), Germany (DE) and the United States (Texas), respectively. The results are then compared to a reference scenario with the corresponding emissions that would occur if all exported electricity was supplied by a natural gas-fired peaking plant instead. The average carbon emissions intensity of gas-fired peaking plants in Europe is specified by the European Commission. For the US (Texas), the assessment is compared to a reference scenario using emissions factors that reflect grid emissions rates during non-baseload periods in which a mix of non-baseload generation plants (e.g. gas-fired and coal-fired peaking plants) is deployed to support peak demand, as the US has these emissions factors publicly available.

• Total renewable electricity stored (MWh): This metric is based on the share of import energy from renewables summed across the portfolio. Battery charging data is collected by the Investment Manager’s asset management team on an hourly, half-hourly and quarter-hourly basis for each asset, then combined with the percentage of renewables on the grid at a given time (obtained from the relevant transmission system operator) and consolidated.

Data sources and processing

The data for the sustainability indicators are collected by the Investment Manager, with no estimation necessary, and processed by a third-party sustainability consultant.  To ensure high data quality, the Investment Manager uses granular metering data as well as official grid carbon emissions factors to calculate the sustainability indicators.

For ease of reference, a description of the data sources and processing is included in the Methodologies for environmental or social characteristics section above.

Limitations to methodologies and data

• Net CO2 emissions avoided: The approach employed is based on current industry knowledge as well as guidance from the GHG Protocol and the European Commission. However, its main limitation is the simplified assumption that all electricity discharged by battery storage facilities replaces electricity from gas-fired peaker plants (or other non-baseload power, in the case of Texas). Furthermore, the metric fails to capture the full value battery storage systems add to electricity systems, which includes important ancillary services. The Investment Manager continues to monitor industry efforts to refine the methodology for avoided CO2 emissions and to develop alternative metrics offering a better reflection of battery storage’s contribution to the energy transition.
• Total renewable electricity stored: The share of renewable energy is calculated using official half-hourly data for GB, hourly data for Texas, monthly data for Germany and annual figures for Ireland and Northern Ireland. There is an opportunity for further research to obtain more precise grid mix data for Germany, Ireland and Northern Ireland.

The limitations mentioned above do not affect how the environmental characteristics are met.

Due diligence

The fund invests in energy storage projects that sit within special purpose vehicles which do not have management structures, employees, or tax policies in the way “investee companies”, as understood by the SFDR, might have.

The Investment Manager, who manages the assets on the fund’s behalf, has put in place policies and procedures to ensure responsible business conduct. These include due diligence processes and internal training covering issues including bribery, corruption, money laundering and cyber security.

Good governance practices are also assessed and monitored as part of the fund’s consideration of the principal adverse impacts on sustainability factors, as detailed in Annex II.

Specifically, with regard to the principal adverse impacts, the Investment Manager conducts due diligence on the following concerns:

• Greenhouse gas emissions: The fund excludes any investments in fossil fuels.
• Biodiversity: The Investment Manager assesses the fund’s assets’ impact on biodiversity during the investment and construction process and takes appropriate action to avoid or remediate impacts to ensure compliance with local planning regulations.
• Pollution and waste: The Investment Manager works closely with its partners during the construction process and over the lifecycle of the fund’s assets to avoid pollution and waste where possible.
• Human rights, social and employee matters: The fund supports the UN Global Compact Principles and OECD Guidelines for Multinational Corporations and does not tolerate any form of forced labour, child labour or severe human rights abuses in its supply chains. As part of the due diligence process, suppliers are required to provide details of their supply chain management approach and to confirm, on an annual basis, compliance with the principles outlined in the Investment Manager’s supplier code of conduct. The Investment Manager also has processes in place to ensure health and safety standards are met on-site.

Engagement policies

Due to the nature of the fund, engagement is not part of the environmental or social investment strategy.

Designated reference benchmark

Due to the nature of the fund, no index has been designated as a reference benchmark to meet the environmental characteristics promoted by the financial product.

SFDR Website productinformatie voor financiële producten die milieu- of sociale kenmerken bevorderen

Datum: 27 Oktober 2023

Samenvatting

De milieukenmerken die door het fonds worden gestimuleerd, zijn het bieden van steun voor de overgang naar groene energie en voor inspanningen om klimaatverandering tegen te gaan. 

Gore Street Energy Storage Fund investeert in energieopslagsystemen op nutsschaal. Deze activa ondersteunen de overgang naar een koolstofarme, duurzame economie door:

• koolstofemissies uit de energiesector vermijden
• de integratie van hernieuwbare energiebronnen in het elektriciteitsnet mogelijk maken.

Gore Street Energy Storage Fund bevordert milieukenmerken, maar heeft duurzaam beleggen niet als doelstelling. De beleggingsdoelstelling van het fonds is om beleggers op de lange termijn een duurzaam en aantrekkelijk dividend te bieden door te beleggen in een gediversifieerde portefeuille van utility-scale energieopslagprojecten, momenteel in het Verenigd Koninkrijk, Ierland, Duitsland en de Verenigde Staten. Daarnaast streeft het fonds ernaar beleggers een element van vermogensgroei te bieden door de herbelegging van nettokasstromen die het dividenddoel overschrijden.

De volgende elementen van de beleggingsstrategie zijn bindend voor alle beleggingen die door het fonds worden overwogen, geselecteerd en aangehouden:

• Als gevolg van de zeer beperkte toegestane beleggingscategorie van het fonds, zal het fonds alleen beleggen in energieopslagprojecten op utiliteitsschaal, die naar verwachting allemaal zullen bijdragen aan de gekozen milieukenmerken. Verder is het fonds van plan om te investeren met het oog op het houden van de energieopslagactiva tot het einde van hun nuttige levensduur.
• Het fonds sluit beleggingen uit in bedrijven die zich richten op de winning van fossiele brandstoffen.

100% van de investeringen is momenteel toegewezen aan energieopslagsystemen op batterijen. Wanneer het fonds kapitaal heeft aangetrokken, zal dit nieuwe kapitaal, na ontvangst van dit kapitaal en voordat het wordt aangewend voor investeringsprojecten in overeenstemming met de beleggingsstrategie van het fonds, bestaan uit geldmiddelen en kasequivalenten.

De Beleggingsbeheerder controleert jaarlijks de milieukenmerken die door het fonds worden bevorderd en de duurzaamheidsindicatoren en beoordeelt eventuele vereiste acties. Methodologieën om de milieukenmerken te meten die door het fonds worden bevorderd, zijn ontwikkeld in samenwerking met een externe duurzaamheidsadviseur en worden in het relevante deel hieronder beschreven.

• Vermeden netto CO2 emissies - De benadering is gebaseerd op een vergelijking tussen een scenario waarbij de batterijopslagactiva van het fonds diensten leveren aan het elektriciteitsnet, en een tweede, hypothetisch scenario waarbij de batterijopslagactiva van het fonds niet in gebruik zijn.
• Totale hoeveelheid opgeslagen hernieuwbare elektriciteit - De totale hoeveelheid opgeslagen hernieuwbare elektriciteit wordt berekend aan de hand van het aandeel ingevoerde energie uit hernieuwbare bronnen voor elk bedrijfsmiddel, opgeteld over de hele portefeuille en gerapporteerd op jaarbasis.

De gegevens voor de duurzaamheidsindicatoren worden verzameld door de Beleggingsbeheerder en verwerkt door een externe duurzaamheidsadviseur. De belangrijkste beperking van de methodologie voor netto vermeden CO2-emissies is de vereenvoudigde veronderstelling dat de elektriciteit die door de activa van de Vennootschap tijdens piekuren wordt geleverd, de elektriciteit vervangt die wordt opgewekt door gasgestookte piekcentrales. Voor de totale opgeslagen hernieuwbare elektriciteit is er een mogelijkheid om de gegevens over de netmix te standaardiseren (die momenteel worden verstrekt op halfuurlijkse, uurlijkse, maandelijkse en jaarlijkse basis, afhankelijk van de netbeheerder).

De Beleggingsbeheerder, die de activa namens het fonds beheert, heeft beleid en procedures opgesteld om verantwoord zakelijk gedrag te garanderen. Deze omvatten due diligence-procedures en interne opleidingen over kwesties als omkoping, corruptie, witwassen en cyberveiligheid. Goede bestuurspraktijken worden ook beoordeeld als onderdeel van de monitoring van de belangrijkste negatieve impact van het fonds, specifiek met betrekking tot biodiversiteit, vervuiling, afval en mensenrechten.

Gezien de aard van het fonds maakt engagement geen deel uit van de beleggingsstrategie. Het fonds wijst geen referentiebenchmark aan.