Climate Change Data

Environmental Metrics

ESG Focus Areas

• Ethics and Integrity
• Compliance
• Investing in the Energy Transition
• Transparency and Public Disclosure
• Cybersecurity
• ESG Integration in Investments
• Conflict of Interest
• Talent Attraction, Development and Retention
• Diversity, Equity & Inclusion

Environmental Achievements

• Became a carbon neutral company and committed to maintaining this status.
• Offset 6,838 tCO2e of total emissions in 2021 through funding sustainable development projects.

Social Achievements

• Racially or ethnically diverse partners increased to 15% from 9% in 2019.
• Racially or ethnically diverse senior-level employees increased to 18% from 13% in 2019.
• 37% of new hires in 2021 were women and 34% were racially or ethnically diverse.
• 36% of employees promoted in 2022 were women and 30% were racially or ethnically diverse.
• Launched inaugural employee resource groups (ERGs).

Governance Achievements

• 100% of investments went through ESG due diligence.
• Increased focus on integrating climate considerations throughout the investment process.
• Dedicated AUM/AUA to energy transition and natural capital.
• Established a structured approach to investigating potential critical ESG incidents.

Climate Goals & Targets

Environmental Challenges

• Reducing carbon emissions from air travel and professional services.
• Improving ESG performance among General Partners (GPs).
• Increasing diversity and inclusion across all levels of the organization.

Mitigation Strategies

• Implementing emissions reduction initiatives across global offices.
• Adding climate-related queries to vendor due diligence.
• Engaging with 64 GPs on ESG policy adoption and improvements.
• Developing a detailed guidance module for GPs on ESG issues.
• Partnering with organizations to increase participation and inclusion of underrepresented groups.
• Implementing various diversity, equity, and inclusion (DEI) initiatives.

Supply Chain Management

Responsible Procurement

• Vendor due diligence process, including evaluation of compliance with modern slavery and human rights laws.

Climate-Related Risks & Opportunities

Opportunities

• Investing in climate solutions.

Reporting Standards

Frameworks Used: GRI Standards: Core Option, SASB Asset Management & Custody Activities Standard, TCFD, UN PRI

Certifications: LEED (Toronto, Beijing, Cleveland, La Jolla, San Francisco, Seoul, New York offices), BREEAM (London office), ISO 14001 (Tokyo office), Carbon neutral certified (Sydney office)

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 7: Affordable and clean energy
• Goal 8: Decent work and economic growth
• Goal 10: Reduced inequalities
• Goal 11: Sustainable cities and communities
• Goal 13: Climate action

Investments and initiatives contributing to these goals are detailed throughout the report.

Environmental Metrics

ESG Focus Areas

• Responsible Investment
• Environmental, Social, and Governance (ESG)
• Climate Change
• Diversity, Equity, and Inclusion (DEI)
• Human Rights
• Sustainable Development Goals (SDGs)

Environmental Achievements

• StepStone has been a verified Carbon Neutral company in its own operations since 2019.

Social Achievements

• Supports diversity initiatives internally and externally, including facilitating employee community engagement.
• Offers employees support and training on DEI issues and partners with external expert organizations to promote diversity within the industry.

Governance Achievements

• Adopted a Responsible Investment Policy (updated September 2023), became a signatory to the UN Principles for Responsible Investment (PRI) in 2013, and created a StepStone Responsible Investment Committee in 2017.
• Supports the Task Force on Climate-Related Financial Disclosures (TCFD), is a member of the Global Real Estate Sustainability Benchmark (GRESB), and an alliance member of the International Financial Reporting Standards (IFRS).

Climate Goals & Targets

Environmental Challenges

• Integrating ESG factors across diverse asset classes and investment strategies.
• Ensuring consistent implementation of RI policies across different jurisdictions and cultures.
• Gathering and analyzing ESG data from various sources.

Mitigation Strategies

• Tailored implementation of RI policies to each asset class and investment strategy.
• Utilizing proprietary ESG Scorecard and Impact Scorecard for assessment.
• Leveraging data science and engineering tools for ESG data management.
• Annual review and update of the Responsible Investment Policy.

Supply Chain Management

Responsible Procurement

• Assessment of modern slavery and human trafficking risks

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: PRI, TCFD, SASB, GRESB, IFRS, SDGs, Operating Principles for Impact Management, Impact Management Project, IRIS+, European Taxonomy, IIGCC

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity and Inclusion (DEI)
• Human Rights
• Responsible Supply Chains

Environmental Achievements

• Reached carbon neutrality in operations for the fifth consecutive year.
• Launched initiative to support GPs in estimating financed emissions using Pathzero Navigator, engaging over 650 GPs.

Social Achievements

• Named one of the Best Places to Work in Money Management by Pensions & Investments in 2023.
• Launched Women in StepStone (WINS) ERG.

Governance Achievements

• First accepted as a signatory to the UK Stewardship Code.
• Added three observers to the RI Committee, bringing the total number of members to 14 and observers to four.

Climate Goals & Targets

Environmental Challenges

• Data challenges inherent to the Private Debt asset class in measuring emissions.
• ESG backlash and greenwashing allegations leading to increased scrutiny of ESG practices.

Mitigation Strategies

• Developed specialized RI dashboards for clients, providing over 1 million ESG data points.
• Continued to enhance processes for integrating material ESG factors throughout decision-making.
• Invested in monitoring and reporting systems.

Supply Chain Management

Supplier Audits: Periodic due diligence on key vendors.

Responsible Procurement

• Due diligence on supply chain; work with suppliers to promote ethical practices; vendor DDQ with questions on human rights and ethical business relations.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Policy and legal changes
• Technological advancements
• Market shifts
• Reputational risks

Opportunities

• Resource efficiency
• Lower-emission energy sources
• Development of lower-emissions products and services
• Access to new markets

Reporting Standards

Frameworks Used: FRC UK Stewardship Code, GRI Standards, SASB Asset Management and Custody Activities Standard, TCFD framework

Certifications: LEED (multiple offices), BREEAM (London office), ISO 14001 (Tokyo office), Carbon-neutral certification (Sydney office)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Impact investing aligned with UN SDGs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Best Places to Work in Money Management (Pensions & Investments)
• Investment Consultancy of the Year (IPE Real Estate Global Awards)