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
Environmental and Social Policies and Management Systems: Sun King has a draft corporate EESMS aligned with IFC PS1 and include the following elements (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 community grievance mechanism; and (vii) monitoring and review. The company is developing E&S management procedures, reporting, and review requirements as part of the ESMS implementation. These include community grievance mechanism, and a community health and safety procedure, including road safety and use of security.
Identification of E&S Risks and Impacts. Sun King has developed and is implementing a Risk Assessment & Management Procedure. The company has a risk register from all segments of its operations including warehouse, Sun King shops, contact centers, and Sun King offices.
EHS organizational structure and competency. At the corporate level, the Vice President Corporate Affairs, reporting to the CEO, oversees overall management of the environment, health, safety, and security (EHSS) strategies, policies, and procedures. In Nigeria, these functions are supervised by the Health, Safety & Wellbeing Lead. At the warehouse, stores and shops, the company has formed health and safety committees, who are trained regularly. Sun King offers an annual training program that guides both internal and external EHS training to staff and sales agents. Training offered last year include, fire safety, first aid, emergency response, road safety, health and safety onboarding for staff, sales agents, and prevention of sexual harassment.
Emergency Preparedness and Response. Sun King has a documented business continuity and emergency preparedness and response plan (EPRP) that is being implemented. The roles and responsibilities for various teams responsible for evacuation, rescue, firefighting etc. are defined. The emergency response plan has an internal audits team to verify its implementation and will be reviewed bi-annually. The EPRP include Life and Fire safety (L&FS). Sun King facilitates annual fire drills in all its facilities including offices, stores, and warehouses, conducts life and fire safety training and has placed fire suppression equipment at strategic locations.
E&S Monitoring and Review: The Health, Safety and Wellbeing Lead, jointly with the health & safety committee members, facilitates regular audits to identify gaps and opportunities for improvement of EHSS procedures. Some of the key performance indicators being monitored by the company include medically treated incidents, lost time incidents, fatality incidents, occupation illness cases, restricted work incidents, road traffic accidents. The EHSS performance is documented and reported in the company’s “Global HSE monitoring tracker.”
PS2: Labor and Working Conditions
Sun King Nigeria has a workforce of 700 direct workers (42% female),7000 + sales agents and 90 solar installation technicians working on commission basis. The project will double the current workforce and sales agents.
Human Resources Policies and Procedures: Sun King has prepared and implement country level HR policies and procedures compiled in an HR manual. The manual includes policies and procedures on working conditions, workers code of conduct, inclusivity, acceptance and anti-discrimination, sexual harassment, whistleblowing, employee grievance, performance management policy, labor and human rights, health and safety, remuneration policy, freedom of association & collective bargaining, prevention of bonded & forced labor, and non-discrimination policy.
Working Conditions and Terms of Employment: Working conditions and terms of employment are stipulated in HR manual and include recruitment, employee selection, compensation and benefits, labor relation, and managerial relations. Each worker receives an open term contract describing working conditions and terms of employment including working hours and annual leave. The company has a large component of women owned MSMEs within the company’s distribution network in addition to sales agents and workers. As part of the ESAP #1, Sun King Nigeria will, undertake a gender-based violence (GBV) assessment to define strategies to manage GBV risks including relevant policies, procedures, and an effective means of communicating the strategy to facilitate implementation.
Workers Organizations. The Nigeria labor law provides for freedom of workers to join workers’ associations, and the company has a policy in support of such and does not discourage workers to form such organizations. The company has a clear freedom of association policy and procedure aligned to IFC PS2 and communicate it to the workers.
Workers Grievance Mechanism. Employee grievances are managed through the direct supervisor who addresses the concern and may escalate the grievance to the HR Director as described in the Employee Grievance Procedure (EGP). The EGP allows for anonymous grievances through an email, or a hotline managed internally by the HR Manager or the company’s ombudspersons. The EGP allows for classification of grievances, specify a timeline for investigations and communication plan including during induction and other sensitization activities. The EGP is not accessible to third-party contractors, as such Sung King will ensure the EGP is available to all third-party agents including sales agents, security guards, cleaners, solar panel installation technicians and forklift operators and trained on this procedure through induction and other regular training (ESAP # 2).
Occupational Health and Safety (OHS). Sun King has a Health and safety policy that commits the company to support the health and safety of its staff, contracted agents, customers, and visitors to workplaces, including warehouses and premises. The policy is operationalized through OHS standards operating procedures like general health and safety guidelines, travel and road safety guidelines, emergency preparedness and response plan including fire safety guidelines. Key OHS leading and lagging KPIs (e.g., recording and investigation of incidents, provision trainings, enforcement of use of PPEs) are monitored and reported. There are no significant OHS events or fatalities since inception of the company. The company has a documented OHS training plan, that is being implemented. As part of this project, Sun King Nigeria will develop a SOP for installation of solar panels and AC invertors including working at heights and train relevant staff and third part contractors (ESAP#3).
Contractor Management: Sun King uses contractors for installation of PVC solar panels and invertors. Other workers engaged by third party contractors include security guards, cleaners, and forklift operators at the warehouses. With the project sales increase on AC invertors and as part of this project, Sun King Nigeria will develop and implement a contractor management plan aligned with PS2 and the Good Practice Note for Contractor Management and contractually require its contractors to align their labor policies with the company’s policies and PS2 (ESAP #4).
Supply Chain: Sun King manages supply chain risks through its Global Sourcing and Procurement Policy and Supplier Code of Conduct that addresses child and forced labor and aligned with the WBG solar equipment and batteries sourcing roadmap. The Company has an office in China to manage supply chain risks through audits for compliance with E&S policies and procedures. Primary suppliers are evaluated during the sourcing process and, agree to Sun King’s Supplier code of conduct, that has requirements on labor and working conditions, OHS, prevention of child and forced labor, and fair and equal treatment of workers. Sun King conducts quarterly audits on contract manufacturers and warehouse partners to ensure compliance with these requirements. Sun King does not have any direct or indirect supply chain exposure to Western China, and all the existing vendors are in South and East China.
PS3: Resource Efficiency and Pollution Prevention
The company’s operations primarily involve sale of solar home systems and would not result in significant quantities of wastes, emissions and water and electricity is only used in the main office, sales stores and warehouses. Electricity for its operations is sourced from the national grid. The diesel standby generators are used rarely, and they are less than 3 MWh. Water for the office is obtained from the local utility supply company.
Green House Gases: Sun King has a documented procedure for tracking Green House Gases (GHG) emissions and uses a third-party carbon accounting service provider to calculate annual greenhouse gas emissions for its global operations. The 2023, GHG emissions were estimated to be 984.5 tons carbon dioxide (CO2) equivalent per year (tCO2e) for scope 1, 258.5 tCO2e for scope 2 and 63,259.5 tCO2e for scope 3. The company has commenced the development of a Climate Change Policy to guide on adoption and resilience strategies for the company.
Solid waste: The main solid waste emanates from the warehouse includes cardboard, which are stored in a designated area and sold to a vendor. Office waste that includes wastepaper and food waste is stored and collected by an authorized waste management contractor and disposed in an authorized landfill.
Electronic waste management: Sun King sales a wide range of electronic products that result in e-waste. The company has developed an e-waste management policy that commits the company to minimize e-waste generation and sensitize all stakeholders on the proper management and handling of e-waste on a sustainable basis including recycling. Guided by the product and end of life, and Sun King’s e-waste management and recycling policies, the operations department implements e-waste management guidelines and ensure quantities of e-waste are identified, collected every month, and stored in safe and appropriate storage and ensure all e-waste disposal is executed in line with all relevant regulatory guidelines. A disposal report is prepared and shared with a disposal committee.
PS4: Community Health, Safety and Security
Infrastructure and Equipment Design and Safety: Sun King’s product line is used and installed in residential premises. Sun King has a research and development unit that ensure all products adhere to safety standards. The company uses third-party electrical technicians for installation of AC invertors. All electrical technicians are vetted and trained on selection of safe area of mounting and proper installation of AC invertors.
Consumer Protection: Sun King adheres to the PAYG industry’s Consumer Protection Principles (CPP), as defined, and maintained by GOGLA (Global association for the off-grid solar energy industry). The company has developed policies and procedures including sales agent consumer protection code, data protection policy and fraud policy. Sun King employees and sales agents are trained on these policies.
Traffic Management: Sun King use third party contractors for distribution of products from the current three warehouses to the 90+ shops in Nigeria. The company ensures the trucks are licensed, roadworthy serviced regularly and driven by competent licensed drivers. Company employees and sales agents are required to travel and cover large areas. The company has developed training modules on travel, work and security for sales agents and field employees and solar panel installation agents. With the proposed expansion, Sung King will develop and maintain a road traffic management plan as part of its ESMS. (ESAP#5)
Security: Sun King does not employ security guards. Security of premises is part of the lease and include unarmed security guards, installation of CCTV cameras, and a secure perimeter wall reinforced with an electric fence. All warehouses are equipped with intrusion alarm systems. Sun King has installed biometric access at the offices. The proposed expansion includes areas in Northwest Nigeria and may require the use of armed police. The company will assess risks posed by its security arrangements to those within and outside the project site and develop a complete Security Management Plan (SMP) as part of the ESMS, including a training module for management and security personnel. This SMP shall be aligned with the Voluntary Principles on Security and Human Rights and with the requirements of Performance Standard 4 (paragraphs 12, 13 & 14) (ESAP#6).
