IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environment and Social Management Systems: The Company (CM Thailand) is a subsidiary of CMES (Sponsor) and has contracted CMES engineering services for developing its new projects and managing operational assets including management of contractors/suppliers/vendors. CMES has established and maintains an environment and social management systems (ESMS) since November 2019 that is appropriate to the nature and scale of the renewable energy (RE) projects including rooftop solar projects. The ISO 14001 and 45001 certified ESMS is designed commensurately with the level of environmental and social risks and impacts associated with various types of RE projects including: utility scale/ground mounted solar projects, rooftop solar and wind energy projects. The ESMS incorporates the elements as required under IFC PS1: (i) policy; (ii) identification of risks and impacts; (iii) management programs; (iv) organizational capacity and competency; (v) emergency preparedness and response; (vi) stakeholder engagement; and (vii) monitoring and review.
Policy: CMES has formulated and implemented E&S related policies such as environment, social, and health & safety policies since July 2021. The ESG roadmap is outlined on its website - https://www.cleanmax.com/about-us/esg.php. The E&S policies envision to meet E&S performance standards as set out by the World Bank Group/IFC along with compliance to host country regulations and international conventions, as applicable.
Identification of E&S Risks and Impacts: CMES has established and maintains an early-stage screening process for identifying the environmental and social risks and impacts at each rooftop project site as part of the early-stage site survey report that establishes the project feasibility. Additionally, CMES and CM Thailand have instituted an appropriate legal & compliance management system and procedures that ensures straightforward application of host country E&S regulatory requirements, all applicable permits are obtained in time and compliance to local standards and permitting conditions. In Thailand, factory regulations require that site specific environmental impact assessment (EIA) and public hearing be undertaken for rooftop projects that are above 1MW capacity by an independent third party. Multiple permits and clearances related to construction, electric utilities and labor aspects are required from the appropriate authorities such as sub district administrative organization (SAO), Industrial Estate Authority of Thailand (IEAT), Factory Licensing Authority and Thailand Labor Protection authority. All operational and under construction projects have valid permits and licenses including environmental license if applicable.
Management Programs: CMES has established documented management programs consisting of documented manuals, operational procedures, training management systems, reporting templates, checklists, internal and external audits, monitoring, and reporting mechanisms integrated to its ESMS. CMES has formulated generic: 1) Code of conduct and Contractor HSE requirements that are made part of contract agreements; 2) Construction HSE management plan including 16 standard operational procedures; 3) Asset Management System manual (O&M Phase Manual); and 4) Internal HSE audit guidelines. At each project site, CMES engineering teams prepare the site-specific method statements based on the generic documented management plans referred above which are then submitted to customer HSE team who reviews and approves the same as per local factory regulations. The customer approved method statements and E&S management plans are delivered to contractors. Contractor personnel are periodically trained on site-specific management plans and monitored through the project life cycle. Each rooftop project in CM Thailand had a target of about 12 hrs of training per worker per year in FY24 and the target was achieved across all sites.
Organizational Capacity and Competency: CMES which manages the rooftop projects of CM Thailand has established and maintains a 5-tier E&S organizational structure with clearly defined roles, responsibilities, and authority to implement the ESMS in line with PS1 requirements. The 5-tier E&S organization comprises of CMES Corporate team headed by Global Head of ESG and EHS; Regional HSE Lead; Country HSE Lead stationed at Thailand; Site HSE Lead and Site safety officers/supervisors (deployed by the contractors). CM Thailand project operations are managed by the CMES Regional HSE Lead for North India region along with Country HSE Lead stationed at Thailand who has been made responsible for managing Thailand project operations as well covering both new projects and operational assets. CMES deploys qualified, short term contractual staff from Thailand as Site HSE Leads in each rooftop solar project or a cluster of projects. The CMES E&S personnel (on-roll and contracted staff) and contractors HSE personnel have the knowledge, skills, and experience necessary to perform their work, including current knowledge of the host country’s regulatory requirements and to implement the specific measures and actions required under the ESMS.
Emergency Preparedness and Response: CMES has established and maintains an emergency preparedness and response management system in the form of a documented on-site emergency response plan (ERP) for each of its rooftop solar sites. ERP is reviewed and approved by the Company’s customer ensuring its alignment with customer’s own ERP for the industrial premises. CMES undertakes mock and fire drills to train the workers and take account of any shortcomings both during construction and O&M phases of the project.
Monitoring and Review: CMES has established E&S performance monitoring and senior management review systems and procedures in line with PS 1 requirements. The system includes: 1) daily, weekly and monthly reporting from each rooftop project sites generated by the site HSE leads; 2) internal and external ISO auditing systems; 3) senior management review during the monthly operational excellence review meetings. CMES has been publishing its sustainability report since last 3 years and the reports are published on its website (https://www.cleanmax.com/about-us/esg.php). Additionally, CMES has been assessing and benchmarking its ESG performance globally using GRESB Infrastructure Asset benchmark framework (https://www.gresb.com/nl-en/about-us/) and performance is reported on its website. Both the sustainability report and GRESB ratings include CM Thailand operations.
PS2: Labor and Working Conditions
Company and CMES has deployed a very lean organization in Thailand for managing the business operations. There are around 7 on-roll direct employees managing the construction of new projects and operational assets. CMES engages installation and commissioning (IC) contractors for developing new projects who deploy about 20-50 workers depending on the size of the project. These contractor workers are engaged for a short duration of about 3-5 months during which construction works will be completed. For operational assets management, CMES engages O&M contractors who deploy about 3-4 workers for undertaking solar panel cleaning and preventive maintenance works. These workers are deployed once in a quarter and are not engaged on daily basis at project sites.
Human Resources Policies and Procedures: CMES has formulated and implemented its documented human resource (HR) policies and procedures comprising of human rights policy, corporate policy on prevention of sexual harassment (POSH), employee code of conduct, supplier code of conduct, whistle blower policy, and learning and development (L&D) policy that is applied appropriately to all its employees, contractors, suppliers, service providers, and business partners. HR policies and procedures are consistent with the national labor regulations and requirements of IFC PS 2.
At rooftop project sites, existing worker welfare facilities within the client’s industrial premises such as rest rooms, drinking water, first aid/medical facility and canteen facilities are provided by the CM Thailand’s client upon prior permission. The construction contractor arranges transport, offsite worker accommodation (for skilled workers from outstation, if required), onsite office space and PPEs. Offsite worker accommodation is arranged in rented accommodation/houses in the local community that are leased for short term (3-5 months). These accommodation meets CMES worker camp specifications that are formulated in line with IFC worker accommodation guidelines.
Grievance Mechanism: CMES has established grievance redressal mechanism to address concerns from all stakeholders, including employees and contract workers, the local community, and clients. This mechanism covers a range of issues such as community health and safety, environmental impacts, unethical conduct, cultural conflicts, and compensation related matters. CMES has established separate grievance redressal mechanisms for workers and the community respectively as part of its Health, Safety, Environment, and Social Management System. CMES has established a website for its employees to report grievances (including anonymous) which is managed by an independent third-party service provider.
CMES has formulated a corporate policy on Prevention of Sexual harassment at workplace since 2019 and the same is applicable to CM Thailand operations. CMES has also instituted a framework or process for handling sexual harassment related complaints. CMES has constituted an internal complaint committee (ICC) for each branch/office which has 10 or more employees. Staff and workers are trained on POSH policies and ICC mechanism. As per the sustainability report for FY24, about 7% of training manhours were spent on POSH/ICC related training. There were no POSH cases reported in the last financial year nor any complaint remains outstanding for redressal as of 31st March 2024.
Occupational Health and Safety (OHS): CMES has implemented a documented occupational health and safety (OHS) management systems certified to international OHS management system standard, ISO 45001:2018, and instituted appropriate safety organization across all its operations and business divisions. Additionally, CMES carries out regular internal safety audits, safety observations and monitors & reports on various safety performance aspects. Based on the safety monitoring documents, CMES reports that CM Thailand operations in last three years had zero first aid cases, lost time injuries, fatalities, medical treatment cases, restricted work cases and road traffic collision cases and have reported 0.3 million safe manhours since FY22. At the CMES (Sponsor) level operations that includes Thailand operations, the sponsor has reported zero Lost Time Injury Frequency Rate (LTIFR) and zero fatalities. Sponsor has reported 4.6 million safe manhours in FY24 including its on-roll employees and contractor workers.
Considering that fall from height is the significant OHS risk in rooftop solar projects, CMES provides state of the art worker safety infrastructure comprising of handrails, stairs/steps and walkways on industrial roofs, barricaded skylight roofs, full body harness and fall arrest system, horizontal and vertical lifelines, monkey ladders with fall protection systems, and safety line (along with a lifeline system, a lanyard, a harness line, a fall arrest system, or a fall restraint system).
Workers Engaged by Third Parties: CMES applies its HR principles and practices to its suppliers, vendors and contractors through its “Supplier Code of Conduct”, that is included in the enforceable legal agreements. CMES through its site management team, enforces supplier code provisions such as legal compliance, health and safety of workers, human rights, prohibition of child/forced/bonded labor practices, non-discrimination, prevention of sexual harassment, wages and working hours which are in line with IFC PS2 requirements.
Supply Chain: CMES is committed to creation of a responsible supply chain ecosystem and has instituted supply chain management systems comprising of supplier screening using ESG criteria before selection and evaluates suppliers' performance in relation to social, environmental, health, and safety standards. The supply chain ecosystem is governed by the requirements of supplier code of conduct (COC) that is well aligned to IFC PS 2 requirements on supply chain.
With regards to solar PV panel suppliers, Company/Sponsor procures from Tier 1 suppliers that have established sub-supplier traceability systems embedded in their own supply chain management systems in line with the requirements of development finance institutions including the World Bank Group. However, as part of the IFC investment conditions under the current project and as per agreed environmental and social action plan (ESAP), Sponsor agrees to strengthen its existing solar PV panel procurement system by establishing and implementing a solar PV panel supply chain management system that is aligned to the requirements of WBG Roadmap on solar panel supply chain. The aim for setting up such a system is to provide CMES with higher visibility, leverage, and systems in place to trace its suppliers to the sources of polysilicon, and to the extent possible, to the metal grade silicon (MGS) or quartz, where the potential contextual risks in terms of forced labour are deemed highest.
PS3: Resource Efficiency and Pollution Prevention
Resource Efficiency: As per CMES estimates, project water demand for each cleaning cycle during O&M phase will be about 1.5-1.8 Liters per module (of 350Wp capacity) which when extrapolated indicates 4.29 to 5.14 cubic meters of water per MW of the project per cleaning cycle. There is no water demand during construction phase except for construction worker’s domestic needs like drinking, washing and sanitary needs. Through the project lifecycle, water is supplied by the customer. In Thailand, solar rooftop projects typically require cleaning once a quarter or 4 cleaning cycles per year and is done manually. Company is exploring various semi-robotic technological options for module cleaning to mitigate the safety risks on high rise and slanting rooftops.
GHG Emissions: IFC funded portfolio of rooftop solar projects cumulatively producing 72 MWp of electricity is expected to generate approximately 105.12 gigawatt hours (GWh) of electricity per year which is estimated to off-set CO2-equivalent emissions of 48,039 tons/year. As the project progresses based on actual power generation figures, the company will estimate the GHG emissions reduction and report to IFC as part of its annual E&S performance monitoring report.
GHG emissions arising out of CMES business operations (including CM Thailand operations) have been reported in the Sustainability Report published on its website (Refer: https://www.cleanmax.com/pdf/esg-fy-23-24.pdf). In FY24, CMES reports that it has achieved zero GHG emissions under Scope 1 and 1620 tCO2e/year of GHG emissions under Scope 2.
Wastes: As per ESMS of the Sponsor, each site has documented waste management procedures to be formulated and implemented as per Site HSE Management Plan during construction and O&M phases of the project. As per the waste management procedures, typical waste streams identified include hazardous and non-hazardous wastes such as damaged solar panel wastes, e-waste, battery waste, hazardous wastes, domestic solid waste, recyclable wastes, scrap metal wastes, timber & general packaging wastes, waste cables (electrical installation), and burnt/used transformer oil/sludge. The wastes are managed as per local regulations such as Thailand Waste Disposal Act, 2021. CM Thailand reports that there has been no generation of damaged solar panels or other hazardous waste streams as rooftop projects in Thailand were commissioned only 2-3 years back. As per procedure, damaged panels and used transformer oil will be given back to original equipment manufacturer/supplier for processing.
PS4: Community Health, Safety and Security
Infrastructure and Equipment Design and Safety: In the current project under consideration, about 20% of roof is expected to be of concrete/RCC roofs and the balance 80% will be of industrial metal roof type with different slopes. As per local factory regulations and permitting requirements, an independent third party competent engineer is required to certify the roof structural stability for withstanding different kind of structural loads acting on the PV array and roof (including wind, snow, and seismic loads) before the construction permit is to be issued. The independent engineer verifies and assesses the roof strength based on applicable Thailand Industrial Standards and regulations and relevant specifications of American Institute of Steel Construction. CMES also uses state of the art solar PV array installation systems and fixings for solar panels to withstand any kind of natural calamities (such as heavy rain, thunderstorm, cyclones).
Traffic Impacts and Transportation Safety: The C&I client sites of CM Thailand are in well-established Industrial Estates with good road network connectivity or along major roadways in Thailand. The traffic volumes expected during project construction phase is minor and for limited periods. However, as per ESMS, each site develops and implements a site-specific, traffic management procedures as per Site HSE Management Plan requirements. The traffic management plan covers aspects such as safe traffic route planning, speed restrictions, vehicle fitness, safe driver, and heavy vehicles such as lift trucks and those with tail lifts are to be thoroughly examined by a competent person.
