Responsible Investment Policy
The mission of Sixth Street Partners, LLC (“Sixth Street”) is to deliver compelling risk-adjusted returns while managing risks and conducting our business with high standards of integrity. We believe that environmental, social and governance (“ESG”) factors also affect performance. As a result, we assess ESG matters together with financial criteria when making investments. Where possible we use our influence to promote sustainable business practices in the companies, platforms and other opportunities we invest in. We believe this has the potential to deliver value to our stakeholders that is consistent with our fiduciary obligations to act in the best interests of investors and to maximize returns.
Commitment to Responsible Investment
Sixth Street is a signatory to the United Nations-supported Principles for Responsible Investment (“PRI” or the “Principles”) and follows its six principles by (a) incorporating ESG issues into investment analysis and decision-making processes; (b) seeking appropriate disclosure on ESG issues by the entities in which we invest; (c) promoting acceptance and implementation of the PRI principles within the investment industry; (d) working together to enhance our effectiveness in implementing the Principles; (e) reporting on our activities and progress towards implementing the Principles; and (f) where acting as active owners of portfolio companies, by incorporating ESG issues into our ownership policies and procedures.
Our eight diversified, collaborative investment platforms and flexible, long-term capital base allow us to invest thematically and without constraints across sectors, geographies and asset classes. Our investment disciplines may however mean that Sixth Street has limited access to ESG-related information and limited ability to influence or control portfolio company activities.
For those investments in which we have ownership or control of a business or a substantial asset, we integrate ESG considerations into our investment and management decisions. We assess ESG risks as part of our due diligence process and factor potentially significant impacts into the credit risk analysis; and assess and monitor ESG considerations during the investment period.
For those investments where we have influence through ownership or governance rights, to the extent that ESG-related information is available, we factor potentially significant impacts into our credit risk analysis and re-evaluate investment decisions as part of our overall diligence process.
For those investments where we have no control and limited ability to assess or monitor ESG-related factors, we endeavor to identify and, where appropriate, elevate the consideration of ESG issues.
Deal Teams will present findings and the appropriate investment review body will assess any ESG issues and how to manage them during the deal underwriting process. Deal teams will monitor existing investments and report relevant ESG findings to the Chief Risk Officer on a quarterly basis or when material issues arise.
Monitoring of ESG activities will address the following areas:
How Sixth Street has incorporated ESG analysis into the due diligence process and investment decisions (including assessment of factors at the appropriate investment review body), and, where appropriate, how Sixth Street has engaged third-party advisors such as law firms and specialist ESG consultants;
When Sixth Street has engaged with businesses in which it invests to improve performance on ESG criteria; and
How Sixth Street is monitoring ESG issues for businesses and investments. ESG Oversight and Governance
ESG Oversight and Governance
To implement this policy, Sixth Street will:
Provide training and other tools to its employees, to ensure that they understand the Responsible Investment Policy, and can identify, assess and where appropriate, mitigate ESG risks when providing financing solutions to companies and monitoring portfolios;
Engage external advisers where appropriate to support the implementation of the Responsible Investment Policy and ensure the firm maintains best practices; and
Monitor the implementation of the Responsible Investment Policy and assess its effectiveness on a yearly basis.
Sixth Street will regularly update our Responsible Investment Policy to meet the needs of our platforms and the developing norms and expectations of our stakeholders.
All investment professionals are responsible for annually reviewing and acknowledging the Sixth Street Responsible Investment Policy.
Policy Sponsors: COO, CCO, CRO, GC, key stakeholders from investment review bodies
Policy Supervision: ESG Oversight Team