PS 5 - Land Acquisition and Involuntary Resettlement issues are not foreseen as the project will not involve expropriation or compulsory land acquisition that may lead to the involuntary displacement (physical or economic) of people. PS6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources has not been triggered as all solar power plants in the reviewed Use of Proceeds will be installed in modified habitat with low biodiversity values. No PS7 - Indigenous Peoples and PS8 - Cultural Heritage issues have been encountered in Origo operations to date nor foreseen as part of the Project in the future and thus these are not applicable for the reviewed IFC’s Use of Proceeds.                

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The environmental and social risks and impacts associated with this Project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP).

The key E&S issues associated with this Project include: adequacy of the Company’s Environmental and Social Management System (ESMS), including relevant risk management policies and procedures that cover direct workers, key contractors and sub-contractors; capacity to effectively identify and manage E&S risks associated with its operations; labor management and provision for fair and safe working conditions for employees, contractor and supply chain and to address risks related to grievance management; OHS especially electric works; waste recycling management of PVC solar panels and batteries; natural habitat conversion and stakeholder engagement.                                 

Policy

Origo has started working with ERM to develop a Corporate ESMS in Q4-2022 to be applicable for all existing and new sites. A draft version of the ESMS Manual has been shared, and makes reference to Origo’s applicable policies, that include a Code of Conduct, an Anti-Corruption Policy and a Health and Safety Policy. Policies are communicated to all workers in the organization and its contractors and subcontractors. In addition to the policies listed, the Company is a signatory of several socio-environmental commitments as part of the association with the Ethos Institute, a civil society organization whose mission is to mobilize, raise awareness and help companies manage their businesses in a socially and environmentally responsible manner. Commitments include initiatives on racial and gender equity, child labor eradication and human rights, as well as sustainable management of solid waste and fight of climate change. The policies and commitments cover in general terms the main pillars of PS1, but will be further detailed and aligned with good international practice. As part of ESAP Item 1.1, Origo will develop clear policies covering all business E&S aspects, including the main objectives and principles from all the commitments already signed, to guide the project consistently with the IFC PSs. Policies will be signed by the top management of the Company and communicated to all direct and indirect workers.

Environmental and Social Assessment and Management Systems

In 2022, Origo joined the United Nations Global Compact, committing to implement the ten principles on human rights, labor, environment and anti-corruption in the Company’s strategy, culture and operations, in line with the Sustainable Development Goals. To do so, a draft ESMS Manual has been developed as part of ERM’s scope of work and shared with the IFC team. The draft Manual includes the main pillars of an ESMS based on the “Plan, Do, Check, Act” approach with regards to the E&S outcomes and is considered that, once completed, will represent an adequate base for the management plans and procedures to be included as annexes. As part of ESAP Item 1.2 Origo will develop and implement its ESMS based on the ESMS manual and in alignment with IFC PSs operationalizing the policies and including aspects of planning, organization, implementation, monitoring and audit & review.

Identification of Risk and Impacts

Origo currently follows the Operational Procedure for Socio-Environmental Management of Growth, which guides their identification of risks and impacts. The document outlines guidelines for selecting suitable plant sites, including an initial assessment of land use and potential environmental impacts. In its process of prospecting land for lease for the construction of farms, Órigo assesses the existence of traditional communities – especially Indigenous Peoples and Quilombolas. When it is identified that the land belongs to these groups, the lease does not proceed. Once a site is leased and the engineering design is approved, a more comprehensive environmental and social feasibility study is conducted through local consultants. Origo's environmental team assesses socio-environmental risks, confirms the zoning related to indigenous and quilombola lands, obtains permits, and provides technical opinions to optimize the project's layout and minimize impacts. The Occupational Health and Safety (OHS) policy addresses construction-related risks and requires contractors to implement a permit-to-work system. Origo is still working on a document defining the overall Identification of Risk and Impacts for construction and operations related to its activities, that will be developed as part of the ESAP (ESAP item 1.3). The document will ensure that all risks and impacts covered in IFC PS1-PS8 are addressed for all plants in the portfolio. In terms of OHS topics, the documents will also include adequate job safety analyses for all risk-prone activities.

The impact assessments produced for some of the solar plants already licensed in the past have enough information to ensure that E&S risks and impacts will be manageable via the mitigation measures proposed by Origo and the adjustments required by the ESAP.

Given that information on distribution lines outside Minas Gerais is still limited at this stage, Origo will develop a screening procedure for the distribution lines (ESAP item 1.4) connecting the IFC portfolio sites to identify risks related to IP and quilombola lands and priority biodiversity areas (including Legally Protected Areas, Internationally Recognized Areas and areas that are of high risks for birds susceptible to electrocution). Depending on the outcome of the screening, the Company will work on the identification of main risks and impacts in line with ESAP item 1.3. In case of identification of high risks, the Company will act on a best-effort basis to mitigate residual impacts in line with IFC PS1. No high E&S risks have been identified for the distribution lines in Minas Gerais that Origo will directly build.

Management Programs

The management of E&S risks in the business is hinged primarily on implementing the Company’s corporate E&S policies, which are communicated to the contractors involved in the construction and operation and maintenance (O&M) phase of the project. The contractors on site are obliged by contract to undertake their activities in line with the Brazilian legislation regarding OHS and environmental aspects. Once the Company will undertake the identification of risks and impacts in line with ESAP item 1.3 the Company will put in place a set of plans and procedures in line with the mitigation hierarchy to avoid, minimize and compensate the identified risks and impacts (ESAP item 1.5) in line with IFC PSs and WBG EHS Guidelines, for construction and operation of the projects within IFC portfolio. Plans and procedures to be developed will provide Origo with the tools to manage, among others, risks and impacts related to traffic, health and safety of workers, management of resources (water and energy), climate change, erosion, waste generation, hazardous material handling and emergency preparedness.  Specific social and labor plans are discussed in the next sections. Such procedures will need to be communicated to the contractors and included in the contracts as requirements.

Organizational Capacity and Competency

At Origo, responsibility for E&S management is shared among various departments. As head of the Sustainability Department, the ESG&Brand Director, who reports directly to the CEO, is responsible for the management of the E&S risk mapping and its mitigation, supported by an ESG Coordinator. The ESG&Brand Director coordinates with the Human Resources (HR) and OHS Directorate (including a director reporting directly to the CEO, an OHS Coordinator and an OHS Specialist) on all topics related specifically to labor and OHS management. The environmental licensing of new projects is under the responsibility of the COO supported by an Environmental Coordinator working with seven Environmental Analysts who coordinate the work of the contractors undertaking the E&S feasibility studies. The Environmental Coordinator works also with the ESG Coordinator to provide technical support in the identification of environmental risks and impacts of the projects, as well as the elaboration of mitigation and compensation actions.

The HR and OHS Directorate is supported in the field by two contracted companies dedicated to weekly OHS supervision during construction (Quality and Prevenir). The two companies periodically elaborate technical reports describing observed risks and non-conformities and develop corrective action plans and training campaigns in coordination with Origo.

The Company has the intention to augment their E&S management structure with additional capacity under both the OHS and ESG directorates, internalizing part of the duties now under the responsibility of contractors. As part of ESAP item 1.7, the Company will have the necessary E&S capacity to manage the Project in line with IFC standards. To do this, once the final E&S management org-chart is defined and all vacancies filled, the Company will share its final composition and the job description of all staff involved in the management of E&S aspects, proving adequate capacity and competency in line with IFC PS1.

Training on the IFC PSs and on the ESMS will be undertaken by all Origo personnel involved in the management of E&S aspects as part of ESAP item 1.8 which entails the preparation of an E&S Training Management Plan. This plan will also include induction training for all workers accessing and performing their activities at the Project premises to ensure that all workers are aware of relevant Origo’s practices to align the Project to IFC standards.

Emergency Preparedness and Response

Within its OHS Policy, Origo requires the construction contractors to develop an Emergency Action Plan for each of its assets to comply with the Brazilian legislation. The plans are required to include response to snake and insect bites as well as an emergency drill plan, that needs to involve all workers and subcontractors. Other potential emergency scenarios included in the Emergency Action Plans are location-specific, and may include fires, spills, work accidents and natural disasters. To ensure that a more homogeneous approach toward emergency response is undertaken throughout the plants included in IFC portfolio, Origo will develop as part of ESAP 1.9 an overarching Emergency Preparedness and Response Plan (EPRP) that will include all potential emergency scenarios (generated by both internal and external risk factors, in line with IFC PS1 and PS4, and including natural risks and risks associated to climate change), the need to establish an emergency brigade, evacuation plan, emergency contacts and communication flows (internal and with community leaders and government authorities), protocols for the use of equipment, and minimum requirements for emergency drills.  The Company will disclose the EPRPs to employees and contractors’ workers, communities and local authorities.

Monitoring and Review

Origo ESG Directorate reports quarterly on E&S topics to the board of directors, presenting the main advancements as well as gaps, and discussing the way forward for the continuous enhancement of the management of E&S aspects. In addition, the Company elaborates annual sustainability reports to give visibility to ESG advances and actions to its multiple internal and external stakeholders. The document presents the status of its projects, and the performance of its main indicators concerning the socio-environmental topics. Origo’s Legal Directorate develops for each plant a matrix to ensure compliance with legal obligations and regulatory requirements prior to the construction and operation stages, in coordination with the Environmental Coordinator. 

The Environmental and Social Management Plan (ESMP) that will be developed as part of ESAP Item 1.5 will include procedures to monitor and evaluate the effectiveness of all E&S management programs, including the need of KPIs for all activities covered by the ESMP.

E&S Contractor Management

In existing plants, Origo worked with local contractors for constructing the Company’s solar plants, while engineering and procurement were undertaken by Origo. The Company is planning to build internal capacity to undertake most of the construction at the 22 sites, but the use of contractors is still expected. The contractors on site are obliged by contract to undertake their activities in line with the Brazilian legislation and Origo’s policy in terms of OHS and environmental aspects. Through ESAP item 1.6 Contractor Management Plan, Origo will assess contractors and service providers as part of the tender process. The Company will review OHS and E&S performance and practices of prospective contractors, including labor conditions and quality control. Contractors that do not have their ESMS or equivalent will be contractually obliged to follow Origo’s ESMS and related procedures.

In addition, Origo will ensure adequate supervision and reporting of the contractors’ implementation of the procedures to be developed in line with ESAP item 1.5 in the field, and periodically collect the relevant Key Performance Indicators (KPIs) through direct monitoring or collecting information from the contractor, logging the necessary evidence of compliance.

Audits to contractors and key suppliers will be conducted regularly in line with the Auditing Methodology shared by Origo and with the monitoring schedule to be included in the Contractor Management Plan. The audits will assess compliance with E&S requirements and with Brazilian legislation, identifying non-compliances, observations and improvement opportunities, reducing risks and mitigating impacts. After the auditing process, the contract managers will monitor and track to completion the implementation of any identified non-conformities and corrective actions with suppliers and contractors, in line with ESAP item 1.6.

Órigo has 954 employees, 43% of whom are women. Outsourced services are farm maintenance (maintainers), property security during works, farm works and young apprentices. During construction works on the farms, an average of 40 outsourced workers are mobilized, who stay in nearby accommodations. The Company has a program for young apprentices with around 20 employees, who serve the entire Company in a rotary way. In the last 5 years, there has been no labor lawsuit against Órigo. Órigo’s contracts with workers complies with Brazilian laws. Workers follow a 44-hour work week, within the limits allowed by Brazilian labor legislation. Plant employees are hired locally.

Human Resources Policies and Procedures

Órigo has an Anti-corruption Policy and Code of Conduct applicable to employees, directors, suppliers and third parties, which regulates issues such as promoting diversity, combating discrimination, harassment and violence, respect for human rights.

As per ESAP Item 2.1, Órigo will develop a Human Resources Policy and a People Management Procedure, including the hiring, dismissal and promotion processes and its mechanisms to guarantee non-discrimination and equal opportunity, in line with IFC PS2.

Worker’s Organizations

Órigo does not prevent the unionization of its employees and third parties. The Company follows the conventions of the workers' union (SEAAC) for salary readjustments and working hours, among others.

Non-discrimination and Equal Opportunity

In its Code of Conduct, Órigo establishes values and internal practices related to the promotion of diversity, fight against discrimination and harassment, fight against violence and respect for human rights, with foreseen disciplinary measures. Órigo joined the national program for young apprentices, establishing a training trail for young people, who pass through all areas of the Company, with a 50% effectiveness rate. The Company is committed to hiring people with disabilities, having hired a consultancy specializing in corporate inclusion projects. The Company sets internal goals to attract young people, people with disabilities and to increase gender equality, including in leadership positions. Contracts with third parties and suppliers include clauses against discrimination, forced labor, child labor, protection of human rights, gender equality and anti-corruption.

Worker’s Grievance Mechanism

The whistleblowing channel is available to employees for complaints and claims, via email, telephone and website. An outsourced company manages the channel and forwards the complaints to Órigo’s responsible areas. The whistleblowing channel was inaugurated in June 2022 with an internal campaign. Since then, 38 complaints have been received from employees and third parties. In the case of denunciations, the Compliance procedure is followed, which is managed by the Compliance Committee, formed by a person from HR and another from legal.

Órigo will develop the procedure for handling employee’s Grievance Mechanism and improve the disclosure of the grievance mechanism internally and among third part workers (ESAP Item 2.2), in line with the IFC PS2, including online channels and physical disclosure in the units.

Occupational Health and Safety

Origo manages the OHS aspects of its activities through the OHS Policy. It includes actions to contribute actively to the OHS of the Company and its contractors, as well as the roles and responsibility of the relevant parties involved in OHS management, including Origo, the OHS supervision contractors (dedicated to weekly OHS supervision during construction) and the construction contractors. The policy defines the need for Origo to establish the minimum requirements for the qualification and selection of the contractors and subcontractors, manage the OHS supervision contractors’ activities in the field and accompany the OHS KPIs. Among the responsibilities for the OHS supervision of contractors, the policy includes establishment and implementation of a permit-to-work system for high-risk activities. It includes audits, supervision, and weekly reporting in accordance with Brazilian legislation. Non-conformities are identified and corrected through a corrective action plan, and incident investigations are undertaken.

In addition, the policy covers high-risk activities providing indications on how to undertake such activities safely through job safety analyses and permit to work system to be implemented by the contractor. The risk identification and management procedures to be prepared as part of ESAP item 1.3, 1.5, 1.6 and 1.8 will ensure that all OHS risks have been duly identified, management plans are in place to minimize such risks, contractors’ E&S performance is adequate and all workers have received the relevant training to undertake their activities in line with IFC PS2, respectively.

The Company has an incident register registering lost-time (LTIs) and non-lost-time injuries. No serious accidents and fatalities have been reported, but 5 LTIs have been reported in 2023 among construction contractors. The procedures to be developed as part of ESAP item 1.5 and 1.6 are expected to lower the incident frequency rate and ensure alignment with international benchmarks for the industry.

Health monitoring is implemented through the Occupational Health Medical Control Program (PCMSO), providing the frequency of health monitoring for all Origo workers. The OHS policy requires the construction contractors to prepare and implement their own PCMSO, in line with Brazilian legislation and with IFC requirements once adequately recorded and monitored as part of the documents that will be developed to respond to ESAP 1.5 and 1.6.

Supply Chain

The client has a series of framework contracts with its suppliers for an expected 100-300 MW capacity per year. Due to this ongoing panel sourcing IFC PS 2 supply chain requirements will apply to this Project. Origo’s main suppliers are tier-one and are considered to work mainly in line with WBG supply chain roadmap. They have a corporate social responsibility and code of conduct, with internal procedures to track the origin of the materials and subcomponents, working to comply with IFC PS2. This said, details informing the assessment of these suppliers are in continuous evolution and very fluid, thus repeated engagement and evaluation is required in line with WBG supply chain roadmap.

Origo has a supply chain department reporting to the COO that is managing the procurement of solar panels. The Head of Supply Chain, supported by a coordinator and a manager, has been working with the ESG Directorate to develop and implement a process for identifying, assessing and monitoring potential risk in line with PS2 supply chain requirements. Origo’s Code of Conduct includes the commitment to not accepting child and forced labor and to verifying the integrity of their supplier on human rights. It is understood that, due to the nature of Origo’s business (distributed generation), mapping of materials and implementation of risk mitigation measures can be limited by the Company’s limited leverage. However, the Company is still willing to demonstrate its commitment toward alignment with WBG supply chain roadmap on a best-effort basis through the development of a Supply Chain Management Plan (ESAP Item 2.3). This plan will include clear steps for managing suppliers, including (i) a supplier onboarding procedure that details what steps and documents are requested from suppliers to screen and select them ensuring compliance with PS2; (ii) making new and existing suppliers aware that forced and child labor will not be tolerated and include compliance as a requirement in contracts; and (iii) development of associated mitigation measures (e.g., contract termination, shifting suppliers).                                               

Resource Efficiency and Greenhouse Gas (GHG)

Origo operations are aimed at energy efficiency and energy-saving initiatives were reported by the Company including installation of LED lights and staff awareness campaigns. Water use in Origo operations is about 70,000 liters per installed MW per year for cleaning and tracked internally. The water is supplied by trucks from authorized sources. Additionally, in compliance with IFC PS3, Origo continued the internal actions to raise awareness of the conscious consumption of water and energy during the year 2022. Resource efficiency practices and KPIs will be detailed in the ESMP to be developed as part of ESAP 1.5.

In terms of Greenhouse Gas (GHG) Emissions, potential emission sources from routine administrative operations are mainly related to electrical consumption and vehicle use and are relatively insignificant. During construction, GHG generation will be also limited to transportation-related and generator emissions. The Project construction is not expected to contribute significantly to GHG emissions due to its small scale and temporal nature. The estimated amount of renewable energy generated by the project will be about 123 GWh per year. Using emission factor’s data from the Brazilian Ministry of Science, Technology and Innovation for 2022, the avoided emissions for the plants to be built are about 28,700 tCO2e per year. In 2022, Origo neutralized scope 2 emissions arising from electricity consumption in its corporate office with renewable energy certificates generated in its operations. The Company approved a budget for carrying out the first inventory of GHG emissions for 2023 covering scopes 1 and 2 and partially scope 3 and will continue neutralizing scope 2 emissions moving forward.

Pollution Prevention

Wastes from the operations include electronic waste (e.g, solar panels and uninterruptible power systems), paper, packaging materials and organic material. Domestic waste is collected by outsourced waste management companies for disposal at licensed dump sites.  Wastewater from the office facilities, mainly sanitary wastewater, is discharged into municipal sewers.  During construction, workers use portable toilets or small septic tanks regularly emptied by authorized contractors.

Waste such as malfunctioning or damaged solar panels and uninterruptible power systems are stored before disposal. On-site storage and recycling/reuse of these items as well as the recording of quantities on site and evidence of proper disposal (as a last source) will be defined in a dedicated waste management plan to be developed as part of ESAP Item 3.1. The plan will also define temporary storage of hazardous and non-hazardous waste, material recycling/reuse strategy.

Other hazardous materials include oils and grease from generator servicing, solvents and chemical cleaning agents which are generated at the customers’ site but in small quantities, except for diesel fuel used for stand-by generators. The ESMP will include details on the on-site storing and handling of all hazardous substances, in line with IFC PSs and EHS General Guidelines.

Pesticide Use

For the vegetation maintenance of its plants, Origo does not use pesticides nor herbicides, but only mechanical tools handled by local contractors. The commitment to not using pesticides nor herbicides will be included in Origo’s environmental management procedures to be developed as per ESAP item 1.5. The use of gardening tools will be analyzed as part of the Job Safety Analysis to be undertaken as per ESAP item 1.3 to ensure that proper PPE is used.                        

The solar plants are located in clients’ occupied premises fenced from the public and have warning notices displayed at perimeter fences as well as guards (only during construction or in operations when security risks are considered higher). Origo has provided fire identification and suppression equipment at higher risk sites (including equipment and power control rooms). Fire safety emergency procedures will be defined in the EPRP.

All Company employees that operate vehicles receive the OHS policy where safety instructions are provided. For each construction site a major impact on traffic is not expected (e.g., for panels transportation to site an average of 2 to 10 truck trips are required).  In the Contractor Management Plan the minimum requirements for drivers and vehicle maintenance will be detailed.

Security Personnel

Órigo maintains outsourced non-armed property security professionals during farm installation works. Professionals receive training from the outsourced company and are contractually obliged to act within the law and respect Órigo’s code of conduct. The Company has made continuous improvements to the security system of the farms with cameras and automated fences to increase security for workers and property. The Company will develop a procedure and a training plan for security professionals regarding the use of force, and appropriate conduct toward workers and Affected Communities, in line with PS4 (ESAP Item 4.1).                                             

Contacts with local stakeholders are carried out by the land prospecting teams and by the management of the works, around impacts that may be perceived and to strengthen relations with the neighborhood. The Company will (i) develop a procedure for mapping and engaging stakeholders to be used in all IFC Project units; map stakeholders (ii) prepare the engagement plan for the Project areas, ensuring disclosure of information and opportunities for participation, in line with the PS1 (ESAP Item 1.10).

Among the 23 properties that are part of the Project, one is located naer one Quilombola Land, in the municipality of São Domingos do Capim in the state of Pará. The distance to the Quilombola land is 8km. This site is characterized by pastures, having already been relatively anthropized. There is no direct impact foreseen by the project to date on the quilombola land or their people’s way of life.

If the impact identification and assessment process indicates adverse impacts on Quilombola’s peoples and their lands at São Domingos do Capim (PA), the stakeholder mapping and engagement plan to be developed by the Company will involve Quilombolas Peoples in a culturally appropriate manner, in line with PS1 and PS7 requirements. In case adverse impacts are found, Órigo will develop a plan to avoid, minimize, restore, and/or compensate for impacts over Quilombolas Peoples, in a culturally appropriate manner, aligned to PS7.

External Communications and Grievance Mechanism

Órigo has a Community Grievance Management Procedure that describes activities, responsibilities and flow of receipt, treatment, and feedback. Responsibility for managing external complaints falls in Órigo's ESG area. Complaints are managed by the Compliance area, informing the ESG area. The service and registration of complaints and denouncements is done by a third-party company. The available channels are phone, whatsapp and website. Complaint mechanisms disclosure signs are being installed at the entrance to the farms. Since the channels were made available, the Company claims not to have received any complaints. Órigo will widely publicize and disseminate the grievance mechanisms to its stakeholders, ensuring that they are in a culturally appropriate form, in line with PS1 (ESAP Item 1.10).