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ESG Exclusion List

ESG EXCLUSION LIST - OPENSPACE FUND I, II, III & IV

This ESG Exclusion List, aligned with the requirements of our Limited Partners, defines the types of activities that Openspace Capital's Funds I, II, III, and IV do not finance. 

A. Openspace Capital will not finance any activity, production, use, distribution, business, or trade involving:

  1. Forced labour1 or child labour2.
  2. Non-compliance with workers Fundamental Principles and Rights at Work3
  3. Activities or materials deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international phase-outs or bans, such as:
    1. Ozone-depleting substances4, PCB’s (Polychlorinated Biphenyls), Persistent Organic Pollutants (POPs)5, and other specific, hazardous pharmaceuticals6, pesticides/herbicides7 or chemicals;
    2. Wildlife or products regulated under the Convention on International Trade in Endangered Species or Wild Fauna and Flora (CITES)8; or
    3. Unsustainable marine and coastal fishing methods (e.g. blast fishing and drift net fishing in the marine environment using nets in excess of 2.5km in length) that are harmful to vulnerable and protected species in large numbers and damaging to biodiversity and habitats.
  4. Cross-border trade in waste and waste products, unless compliant with the Basel Convention9 and the underlying regulations.   
  5. Destruction10 of High Conservation Value11 areas
  6. Forestry projects or operations that are not consistent with the JICA Guidelines for Environmental and Social Considerations12.
  7. Radioactive materials13 (including nuclear reactors and components thereof) and unbounded asbestos fibres14.
  8. Pornography and/or prostitution (including activities related to prostitution or prostitution procurement).
  9. Racist and/or anti-democratic media.
  10. Prisons. 
  11. Weapons and munitions (including anti-personal mines, landmines, cluster bombs and general-purpose bombs). 
  12. Financial speculation in food commodities. 
  13. In the event that any of the following products form a substantial15 part of a project’s primary financed business activities:
    1. Alcoholic Beverages (except beer and wine);
    2. Tobacco and activities directly related to the production of tobacco; or 
    3. Gambling, casinos, equivalent enterprises, and activities directly related to gambling.

B. Additionally, Openspace Capital will not finance any fossil fuel-related activity that involves16:

  1. Coal prospection, exploration, mining or processing.
  2. Oil exploration or production.
  3. Standalone fossil gas exploration and/or production17.
  4. Transport and related infrastructure primarily18 used for coal for power generation.
  5. Crude Oil Pipelines.
  6. Oil Refineries.
  7. Construction of new or refurbishment of any existing coal-fired power plant (including dual).
  8. Construction of new or refurbishment of any existing HFO-only or diesel-only power plant19 producing energy for the public grid and leading to an increase of absolute CO2 emissions20.
  9. Any business with planned expansion of captive coal used for power and/or heat generation21.
  10. Fossil fuel supply chain and services, including fossil fuel (coal, oil and gas) mining equipment, oil & gas equipment and services.
  11. Proven or probable holding of fossil fuel reserves, with the intention of exploration and/or development of those reserves for revenue generation.
  12. Upstream, midstream and/or downstream fossil fuel activities22, including (without limitation) in the form of transportation or related infrastructure; services; storage facilities; or sale and distribution activities; or power generation based on fossil fuels23.  
  13. Or any other activity, production, use, distribution, business or trade involving any of the items set out in the Harmonized EDFI Fossil Fuel Exclusion List24. 
  14. Unconventional hydrocarbons (resources from hydraulic fracturing, the Arctic or oil sands)25. 

C. Openspace Capital will also not invest directly or indirectly, in any company, or in any company which has any shareholder or director that:

  1. Is known to be in violation of local applicable law related to environment, health, safety, labour, and public disclosure.

Has been convicted, indicted, or subjected to any criminal sanction, by any court or governmental body of competent jurisdiction, for engaging in Money Laundering or Financing of Terrorism, or for having conducted any prohibited practices (including coercive, corrupt, fraudulent, and collusive practices).

  1. Does not comply with applicable international economic sanctions, laws, and regulations, including any applicable measures implementing United Nations Security Council resolutions or unilateral economic sanctions measures that apply to Openspace Capital.

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ESG EXCLUSION LIST - OPENSPACE GROWTH

This ESG Exclusion List, aligned with the requirements of our Limited Partners, defines the types of activities that Openspace Plus, L.P. (“Openspace Growth”) does not finance. 

A. Openspace Capital will not finance any activity, production, use, distribution, business, or trade involving:

  1. Forced labour26 or child labour27.
  2. Non-compliance with workers Fundamental Principles and Rights at Work28
  3. Activities or materials deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international phase-outs or bans, such as:
    1. Ozone-depleting substances29, PCB’s (Polychlorinated Biphenyls), Persistent Organic Pollutants (POPs)30, and other specific, hazardous pharmaceuticals31, pesticides/herbicides32 or chemicals;
    2. Wildlife or products regulated under the Convention on International Trade in Endangered Species or Wild Fauna and Flora (CITES)33; or
    3. Unsustainable marine and coastal fishing methods (e.g. blast fishing and drift net fishing in the marine environment using nets in excess of 2.5km in length) that are harmful to vulnerable and protected species in large numbers and damaging to biodiversity and habitats.
  4. Cross-border trade in waste and waste products, unless compliant with the Basel Convention34 and the underlying regulations.    
  5. Destruction35 of High Conservation Value36 areas
  6. Forestry projects or operations that are not consistent with the JICA Guidelines for Environmental and Social Considerations37.
  7. Radioactive materials38 (including nuclear reactors and components thereof) and unbounded asbestos fibres39.
  8. Pornography and/or prostitution (including activities related to prostitution or prostitution procurement).
  9. Racist and/or anti-democratic media.
  10. Prisons. 
  11. Weapons and munitions40 (including anti-personal mines, landmines, cluster bombs and general-purpose bombs). 
  12. Financial speculation in food commodities. 
  13. In the event that any of the following products form a substantial41 part of a project’s primary financed business activities:
    1. Alcoholic Beverages (except beer and wine);
    2. Tobacco and activities directly related to the production of tobacco; or 
    3. Gambling, casinos, equivalent enterprises, and activities directly related to gambling.

B. Additionally, Openspace Capital will not finance any fossil fuel-related activity that involves:

  1. Coal prospection, exploration, mining or processing.
  2. Oil exploration or production.
  3. Standalone fossil gas exploration and/or production42.
  4. Transport and related infrastructure primarily43 used for coal for power generation.
  5. Crude Oil Pipelines.
  6. Oil Refineries.
  7. Construction of new or refurbishment of any existing coal-fired power plant (including dual).
  8. Construction of new or refurbishment of any existing HFO-only or diesel-only power plant44 producing energy for the public grid and leading to an increase of absolute CO2 emissions45.
  9. Any business with planned expansion of captive coal used for power and/or heat generation46.
  10. Fossil fuel supply chain and services, including fossil fuel (coal, oil and gas) mining equipment, oil & gas equipment and services.
  11. Proven or probable holding of fossil fuel reserves, with the intention of exploration and/or development of those reserves for revenue generation.
  12. Upstream, midstream and/or downstream fossil fuel activities47, including (without limitation) in the form of transportation or related infrastructure; services; storage facilities; or sale and distribution activities; or power generation based on fossil fuels48.  
  13. Or any other activity, production, use, distribution, business or trade involving any of the items set out in the Harmonized EDFI Fossil Fuel Exclusion List49. 
  14. Unconventional hydrocarbons (resources from hydraulic fracturing, the Arctic or oil sands)50. 

C. Openspace Capital will also not invest directly or indirectly, in any company, or in any company which has any shareholder or director that:

  1. Is known to be in violation of local applicable law related to environment, health, safety, labour, and public disclosure.

Has been convicted, indicted, or subjected to any criminal sanction, by any court or governmental body of competent jurisdiction, for engaging in Money Laundering or Financing of Terrorism, or for having conducted any prohibited practices (including coercive, corrupt, fraudulent, and collusive practices).

  1. Does not comply with applicable international economic sanctions, laws, and regulations, including any applicable measures implementing United Nations Security Council resolutions or unilateral economic sanctions measures that apply to Openspace Capital.

D. Openspace Capital will not finance projects or companies involving:

  1. Construction of dams that significantly and irreversibly: (a) disrupt natural ecosystems upstream or downstream of the dam; or (b) alter natural hydrology; or (c) inundate large land areas; or (d) impact biodiversity; or (e) displace large numbers of inhabitants (5,000 persons or more); or(f) impact local inhabitants’ ability to earn a livelihood.
  2. Resettlement of 5,000 or more persons.
  3. Projects or companies that perform abortions as a method of family planning; motivate or coerce any person to practice abortions; perform involuntary sterilizations as a method of family planning; coerce or provide any financial incentive to any person to undergo sterilizations; or perform any biomedical research which relates in whole or in part, to methods of, or in the performance of, abortions or involuntary sterilization as a means of family planning.
  4. Projects or companies that provide significant, direct support to a government that engages in a consistent pattern of gross violations of internationally recognized Human Rights.
  5. Live animal exports.
  6. Any impact on natural World Heritage Sites51 unless it can be demonstrated through an environmental assessment that the project (i) will not result in the degradation of the protected area and (ii) will produce positive environmental and social benefits.
  7. Any impact on areas on the United Nations List of National Parks and Protected Areas52 unless it can be demonstrated through an environmental assessment that the project (i) will not result in the degradation of the protected area and (ii) will produce positive environmental and social benefits.
  8. Extraction or infrastructure in or impacting protected area Categories I, II, III, and IV (Strict Nature Reserve/Wilderness Areas and National Parks, Natural Monuments and Habitat/ Species Management Areas), as defined by the International Union for the Conservation of Nature (IUCN). Projects in IUCN Categories V (Protected Landscape/Seascape) and VI (Managed Resource Protected Area) must be consistent with IUCN management objectives53 unless it can be demonstrated through an environmental assessment (i) there is no degradation of the protected area and (ii) there are positive environmental and social benefits.
  1. Nuclear power production/generation.

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References
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  1. Forced labor means all work or service, not voluntarily performed, that is extracted from an individual under threat of force or penalty as defined by ILO conventions. This is also prohibited under the Fundamental Principles and Rights at Work (see Footnote 4).
  2. Persons may only be employed if they are at least 14 years old, as defined in the ILO Fundamental Human Rights Conventions (Minimum Age Convention C138, Art. 2), unless local legislation specifies compulsory school attendance or the minimum age for working. In such cases the higher age shall apply. This also aligns with the prohibition of child labor under the Fundamental Principles and Rights at Work (see Footnote 4), which includes additional prohibitions for persons under 18 from working in hazardous conditions (which includes construction activities), working at night, and requiring medical examination to be found fit to work.
  3. Fundamental Principles and Rights at Work includes prohibition of all forms of forced or compulsory labor: (iii) prohibition of child labor, including without limitation the prohibition of persons under 18 from working in hazardous conditions (which includes construction activities), persons under 18 from working at night, and that persons under 18 be found fit to work via medical examination; (iv) elimination of discrimination in respect of employment and occupation, where discrimination is defined as any distinction, exclusion or preference based on race, color, sex, religion, political opinion, national extraction, or social origin; see International Labor Organization (ILO) www.ilo.org
  4. Ozone Depleting Substances (ODSs) are chemical compounds which react with and deplete stratospheric ozone, resulting in the widely publicized ozone holes'. The Montreal Protocol lists ODSs and their target reduction and phase out dates. The chemical compounds regulated by the Montreal Protocol include aerosols, refrigerants, foam blowing agents, solvents, and fire protection agents; see www.unep.org/ozone/montreal.shtml.
  5. Defined by the International Convention on the reduction and elimination of persistent organic pollutants (POPs) (September 1999) and presently include the pesticides aldrin, chlordane, dieldrin, endrin, heptachlor, mirex, and toxaphene, as well as the industrial chemical chlorobenzene; see www.pops.int.
  6. Pharmaceutical products subject to phase outs or bans in United Nations, Banned Products: Consolidated List of Products Whose Consumption and/or Sale Have Been Banned, Withdrawn, Severely Restricted or not Approved by Governments; see last version 2001, www.who.int/medicines/library/qsm/edm-qsm-2001-3/edm-qsm-2001_3.pdf.
  7. Pesticides and herbicides subject to phase outs or bans included in both the Rotterdam Convention and the Stockholm Convention; see www.pic.int and www.pops.int.
  8. A list is of CITES species is available at http://www.cites.org 
  9. As defined by the Basel Convention; see http://www.basel.int 
  10. Destruction means the (1) elimination or severe diminution of the integrity of an area caused by a major, long-term change in land or water use or (2) modification of a habitat in such a way that the area’s ability to maintain its role is lost.
  11. High Conservation Value (HCV) areas are defined as natural habitats where these values are considered to be of outstanding significance or critical importance (See http://www.hcvnetwork.org).
  12. Forestry projects or operations that are not consistent with the JICA Guidelines for Environmental and Social Considerations include: (i) significant conversion or significant degradation of critical habitats or critical forests; and (ii) illegal logging of forests without appropriate logging permits. See JICA Guidelines for Environmental and Social Considerations and associated FAQ; see www.jica.go.jp. 
  13. This does not apply to the purchase of medical equipment, quality control (measurement) equipment or any other equipment where the radioactive source is understood to be trivial and/or adequately shielded.
  14. This does not apply to the purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%.
  15. For Openspace Fund I, II, and III companies, “substantial” means more than 10% of their consolidated balance sheets or earnings. For financial institutions and investment funds, “substantial” means more than 10% of their underlying portfolio volumes. For Openspace Fund IV companies, “substantial” means where the portfolio companies’ business directly relates to such activities at the time of investment.
  16. For Fund IV companies, the following activities are exempted and can still be considered eligible for investment: (a) clearly defined and necessary projects that support the energy transition in line with the Paris Agreement; (b) Expansion of on-site power production (captive power) based on oil and gas where there is no viable renewable energy source; (c) LPG for cookstoves; (d) Carbon Capture and Storage; (e) Support for physical decommissioning of coal mines, coal plants, oil and gas assets, or conversion into non-fossil fuel infrastructure; and (f) Decentralized renewable energy systems with back-up generators powered by petrol, diesel or LPG. For the avoidance of doubt, this exclusion policy also applies to any entity where thermal coal-fired power generation activity (not involving new construction or refurbishment as per item 7, or captive expansion as per item 9) constitutes 10% or more of its total revenue.
  17. Gas extraction from limnically active lakes is excepted from this exclusion.
  18. “Primarily” means more than 50% of the infrastructure’s handled tonnage
  19. Investments (up to a maximum of 20% of the fund) in new or existing HFO-only or diesel-only power plants are allowed in countries that face challenges in terms of access to energy and under the condition that there is no economically and technically viable gas or renewable energy alternative.
  20.  i.e. where energy efficiency measures do not compensate any capacity or load factor increase.
  21. This does not apply to coal used to initiate chemical reactions (e.g. metallurgical coal mixed with iron ore to produce iron and steel) or as an ingredient mixed with other materials, given the lack of feasible and commercially viable alternatives.
  22. Definitions: Upstream: exploration and production of fossil fuels, midstream: transportation and storage of raw fossil fuels, downstream: refining and distribution of refined fossil fuels. 
  23. This exclusion also applies to any entity where thermal coal-fired power generation activity (not involving new construction or refurbishment as per item 7, or captive expansion as per item 9) constitutes 10% or more of its total revenue. 
  24. Access via: https://www.edfi.eu/wp/wp-content/uploads/2021/02/EDFI-Fossil-Fuel-Exclusion-List-October-2020.pdf
  25. where revenues attributable to unconventional hydrocarbons exceed 10%.
  26. Forced labor means all work or service, not voluntarily performed, that is extracted from an individual under threat of force or penalty as defined by ILO conventions. This is also prohibited under the Fundamental Principles and Rights at Work (see Footnote 4).
  27. Persons may only be employed if they are at least 14 years old, as defined in the ILO Fundamental Human Rights Conventions (Minimum Age Convention C138, Art. 2), unless local legislation specifies compulsory school attendance or the minimum age for working. In such cases the higher age shall apply. This also aligns with the prohibition of child labor under the Fundamental Principles and Rights at Work (see Footnote 4), which includes additional prohibitions for persons under 18 from working in hazardous conditions (which includes construction activities), working at night, and requiring medical examination to be found fit to work.
  28. Fundamental Principles and Rights at Work includes prohibition of all forms of forced or compulsory labor: (iii) prohibition of child labor, including without limitation the prohibition of persons under 18 from working in hazardous conditions (which includes construction activities), persons under 18 from working at night, and that persons under 18 be found fit to work via medical examination; (iv) elimination of discrimination in respect of employment and occupation, where discrimination is defined as any distinction, exclusion or preference based on race, color, sex, religion, political opinion, national extraction, or social origin; see International Labor Organization (ILO) www.ilo.org
  29. Ozone Depleting Substances (ODSs) are chemical compounds which react with and deplete stratospheric ozone, resulting in the widely publicized ozone holes'. The Montreal Protocol lists ODSs and their target reduction and phase out dates. The chemical compounds regulated by the Montreal Protocol include aerosols, refrigerants, foam blowing agents, solvents, and fire protection agents; see www.unep.org/ozone/montreal.shtml.
  30. Defined by the International Convention on the reduction and elimination of persistent organic pollutants (POPs) (September 1999) and presently include the pesticides aldrin, chlordane, dieldrin, endrin, heptachlor, mirex, and toxaphene, as well as the industrial chemical chlorobenzene; see www.pops.int.
  31. Pharmaceutical products subject to phase outs or bans in United Nations, Banned Products: Consolidated List of Products Whose Consumption and/or Sale Have Been Banned, Withdrawn, Severely Restricted or not Approved by Governments; see last version 2001, www.who.int/medicines/library/qsm/edm-qsm-2001-3/edm-qsm-2001_3.pdf.
  32.  Pesticides and herbicides subject to phase outs or bans included in both the Rotterdam Convention and the Stockholm Convention; see www.pic.int and www.pops.int.
  33. A list is of CITES species is available at http://www.cites.org 
  34. As defined by the Basel Convention; see http://www.basel.int 
  35. Destruction means the (1) elimination or severe diminution of the integrity of an area caused by a major, long-term change in land or water use or (2) modification of a habitat in such a way that the area’s ability to maintain its role is lost.
  36. High Conservation Value (HCV) areas are defined as natural habitats where these values are considered to be of outstanding significance or critical importance (See http://www.hcvnetwork.org)
  37. Forestry projects or operations that are not consistent with the JICA Guidelines for Environmental and Social Considerations include: (i) significant conversion or significant degradation of critical habitats or critical forests; and (ii) illegal logging of forests without appropriate logging permits. See JICA Guidelines for Environmental and Social Considerations and associated FAQ; see www.jica.go.jp. 
  38. This does not apply to the purchase of medical equipment, quality control (measurement) equipment or any other equipment where the radioactive source is understood to be trivial and/or adequately shielded.
  39. This does not apply to the purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%.
  40. For Openspace Growth I companies, this includes entities involved in the development, production, acquisition, stockpiling, retention or transfer of controversial weapons (whole systems or key components*), as well as companies that provide assistance in any of these activities. Controversial weapons means anti-personnel mines, biological weapons, chemical weapons, cluster munitions, depleted uranium, incendiary weapons, white phosphorous weapons and nuclear weapons (*A component is a key component if it plays an essential role in the functionality of the specified weapon system, or is specifically designed or modified for the specified weapons).
  41. For Openspace Growth I companies, “substantial” means more than 5% of their total revenue.
  42. Gas extraction from limnically active lakes is excepted from this exclusion.
  43. “Primarily” means more than 50% of the infrastructure’s handled tonnage.
  44.  Investments (up to a maximum of 20% of the fund) in new or existing HFO-only or diesel-only power plants are allowed in countries that face challenges in terms of access to energy and under the condition that there is no economically and technically viable gas or renewable energy alternative.
  45. i.e. where energy efficiency measures do not compensate any capacity or load factor increase.
  46. This does not apply to coal used to initiate chemical reactions (e.g. metallurgical coal mixed with iron ore to produce iron and steel) or as an ingredient mixed with other materials, given the lack of feasible and commercially viable alternatives.
  47. Definitions: Upstream: exploration and production of fossil fuels, midstream: transportation and storage of raw fossil fuels, downstream: refining and distribution of refined fossil fuels. 
  48. This exclusion also applies to any entity where thermal coal-fired power generation activity (not involving new construction or refurbishment as per item 7, or captive expansion as per item 9) constitutes 10% or more of its total revenue. 
  49. Access via: https://www.edfi.eu/wp/wp-content/uploads/2021/02/EDFI-Fossil-Fuel-Exclusion-List-October-2020.pdf
  50. where revenues attributable to unconventional hydrocarbons exceed 10%.
  51. https://whc.unesco.org/en/list/
  52. https://www.protectedplanet.net/
  53. https://www.protectedplanet.net/