NextEnergy Solar Fund (NESF) has published its latest Sustainability and ESG Report for the year ended 31 March 2025. The report highlights the fund’s continued focus on environmental integrity, biodiversity protection, responsible supply chains and climate resilience, reaffirming its position as a highly engaged ESG investor in the UK-listed renewable infrastructure space.
NESF has maintained its EU SFDR Article 9 classification, the highest tier of sustainability designation available under European regulation, and confirmed full alignment of its core solar assets with the EU Taxonomy Regulation. The company also strengthened its climate disclosures in line with the Task Force on Climate-related Financial Disclosures (TCFD) and Transition Plan Taskforce expectations.
You can click here to read the full report.
Environmental impact and emissions avoided
Over the year, NESF’s solar portfolio generated 830GWh of clean electricity – enough to power over 275,000 UK homes and offset an estimated 151,138 tonnes of CO₂ emissions. Since inception, the fund has generated 6.6TWh of solar energy and avoided more than 1.2 million tonnes of CO₂, supporting progress against the UK’s net-zero goals and contributing directly to UN Sustainable Development Goals 7 (Affordable and Clean Energy), 13 (Climate Action), and 15 (Life on Land).
The report also highlights NESF’s conservative assumptions on carbon offsets. The company only reports emissions avoided from operational generation and does not include forecasted or assumed benefits from pipeline projects.
Deepening commitment to nature and biodiversity
A cornerstone of the 2025 report is NESF’s “Approach to Nature” strategy, which was launched in 2023 to deliver measurable biodiversity enhancement across its UK solar estate. Over the 2024/25 period, 42% of UK sites were covered by biodiversity action plans, up from 28% in the prior year, with a target to extend this further.
Initiatives include managed grassland regimes, hedgerow planting, wildflower seeding, and installation of bee hives and bat boxes. NESF also collaborates with conservation partners including the Wildlife Trust and contributes to the UK Government’s Nature Recovery Network.
The company confirmed that all ecological assessments and biodiversity reporting are independently reviewed by qualified ecologists, supporting transparency and integrity of reporting.
Climate risk integration and TCFD compliance
NESF has enhanced its disclosures on climate risks and resilience through TCFD-aligned reporting. All UK solar sites have now undergone physical climate risk assessments using the ClimateWise Adaptation Risk Matrix, and further scenario testing is planned to align with UK climate adaptation frameworks.
The board has also adopted the UK’s Transition Plan Taskforce guidance, further embedding climate considerations into strategy, governance, and capital allocation. The company continues to integrate short- and long-term climate risk into asset selection and portfolio construction.
Ethical supply chains and human rights
The 2025 report outlines NESF’s continuing support for the Solar Stewardship Initiative, an industry-led effort to increase transparency and accountability across the solar supply chain – particularly in relation to forced labour risks associated with polysilicon production. The company confirmed that due diligence has been strengthened through active engagement with manufacturers and sourcing partners.
All Tier 1 module suppliers are required to meet NESF’s ESG risk standards, and the fund is working to strengthen traceability throughout its procurement chain. The Investment Adviser, NextEnergy Capital, has committed to providing supply chain risk updates as part of its ongoing ESG reporting to the board.
Social and governance standards
NESF continues to maintain strong corporate governance standards. The board is entirely independent of the investment adviser, with 40% female representation and a commitment to ongoing board refreshment. The company has also increased its oversight of workforce disclosures and diversity, equity, and inclusion (DEI) policies within the adviser.
The report notes that gender pay gap reporting and workforce composition data will now form part of NESF’s regular ESG reporting cadence.
Stakeholder engagement and transparency
Throughout the year, NESF has sought to deepen its engagement with shareholders and ESG stakeholders. The company has increased its disclosures in areas such as ESG risk frameworks, biodiversity metrics, and site-level environmental management. This reflects a broader trend towards enhanced transparency in the listed infrastructure sector.
The board has also committed to reassessing the investment management fee structure in consultation with shareholders – a topic highlighted in the wider context of discount management and value alignment.
[QD comment MR: NextEnergy Solar Fund’s ESG reporting continues to set a high bar for transparency and depth within the renewables investment trust universe. The trust’s biodiversity efforts, Article 9 classification, and clear integration of climate risk into asset management stand out at a time when some are still playing catch-up. The board’s engagement on supply chain ethics and support for sector-wide standards like the Solar Stewardship Initiative is also commendable.
However, while strong sustainability credentials are increasingly important to long-term capital, tangible steps like buybacks, fee reform, and clarity on capital allocation may carry more weight in market pricing – click here to see our coverage of NESF’s annual results, which covers these aspects in more detail. If NESF can pair its ESG strengths with progress on those fronts, it could be well positioned to benefit as positive sentiment returns to the sector, hopefully broadening its appeal to incorporate an even wider range of investors.]
