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 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.