Responsible Investment Sixth Street Responsible Investment Sixth Street

About

Responsible Investment Policy

Overview

Sixth Street seeks to deliver compelling risk-adjusted returns while conducting our business with high standards of integrity. We believe that sustainability and governance factors can affect the risk profile, profitability, and general performance of investments.Considering the impact and potential impact of these factors allows us to spot risks, anticipate trends, and inform investment decisions.

For the purposes of this policy, Sixth Street considers sustainability factors to be those related to natural, human, or social capital, that the manager determines have – or have the potential – to create, preserve, or diminish financial value. Sixth Street considers governance factors as those relating to the quality and ethics of a business and its leadership.

Philosophy

Sixth Street’s responsible investment philosophy is guided by the firm’s core values and investment approach.

  • Values: Responsibility is a core Sixth Street value. We are accountable for our business, our team, and our communities.
  • Investment Approach: The firm views the consideration of sustainability and governance factors as a way to understand the durability of an investment theme or an individual business – namely its ability to survive and grow. An investment that, for example, relies in part on regulatory inattention, environmental externalities, or undermining its customers’ wellbeing, is ultimately at risk. With that lens, the firm evaluates these factors to better understand how an investment’s durability matches its expected time horizon, efficacy of downside protection, and the ability to bring creative solutions to bear.

We believe that the evaluation of sustainability and governance factors, considered within the context of our obligations to our clients and our objective of maximizing risk-adjusted returns, helps us deliver value to our investors.

Commitment to
Responsible
Investment

In 2020, Sixth Street became a signatory to the United Nations-supported Principles for Responsible Investment (“PRI”). Sixth Street’s approach to responsible investment is informed by six principles set forth by the PRI.

Our diversified, collaborative investment platforms and flexible, long-term capital base allow us to invest thematically and across sectors, geographies, and asset classes. Sixth Street may face constraints in certain of its strategies (e.g., credit focused) around access to information or influence. We do not currently employ impact strategies.

The firm aims to follow the guidelines below to distinguish the responsible investment approach by asset class, strategy, and its respective level of control:

  • For those potential investments in which we will have a controlling position, we integrate responsible investment considerations into investment decisions where appropriate. We assess sustainability and governance risks and opportunities as part of our due diligence process and factor potentially significant impacts into our underwriting;
  • For those potential investments where we will have influence such as through certain governance rights, to the extent that sustainability or governance information is available to us, we assess those risks and opportunities as part of our overall due diligence process and factor potentially significant impacts into our underwriting, where appropriate; and,
  • For certain investments where we will not exercise control or have limited ability to assess or monitor sustainability or governance factors, we endeavor to identify and, where appropriate, elevate the consideration of responsible investment issues within diligence processes.

Oversight and
Scope

As part of its commitment to responsible investment, Sixth Street:

  • Provides training and other tools to its investment professionals, to ensure they understand the Responsible Investment Policy, and can identify, assess, and where appropriate, raise relevant issues;
  • Where appropriate, investment professionals raise sustainability and governance issues to the Responsible Investment Committee; and
  • The Responsible Investment Committee monitors the implementation of the Responsible Investment Policy.

Sixth Street will review our Responsible Investment Policy and as needed revise the policy to meet the needs of our platforms and the developing norms and expectations of investors and other relevant stakeholders.

Policy Sponsors: Chief Risk Officer, Chief Compliance Officer, General Counsel, key representatives from Investment Committees
Policy Supervision: Responsible Investment Committee