Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental, Social, and Governance (ESG)

Governance Achievements

• Developed a proprietary ESG due diligence tool drawing on SASB standards to identify material ESG factors and integrate them throughout the investment cycle.

Climate Goals & Targets

Environmental Challenges

• Determining which ESG factors are material for each investment and effectively integrating their assessment into the overall investment analysis.
• Many businesses do not fit neatly into SASB's industry and sector categories.
• Varying levels of influence across different investment types and asset classes.

Mitigation Strategies

• Developed a proprietary ESG due diligence tool informed by SASB standards, consolidating sector-specific sustainability topics and accounting metrics.
• Amended its database of ESG factors to reflect topics that reach across industry boundaries and customized the set of sustainability factors analyzed based on the unique profile of the business.
• Modified its ESG due diligence tool to reflect varying levels of influence across different investment types and asset classes, prioritizing ESG factors that pose investment or reputational risk for debt investments.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNPRI, SASB

Environmental Metrics

ESG Focus Areas

• Responsible Investment
• Corporate Governance & Risk Management
• Financial Performance
• Human Capital Development
• Business Ethics
• Environment

Environmental Achievements

• Reduced energy consumption by more than 10% in centers with EMS and up to 60% in centers with upgraded LED lighting at KinderCare, saving over USD 1.5 million in EBITDA from 2018-2020.
• Avoided 1.5 million metric tons CO2e emissions across the portfolio.
• Diverted 29.9 thousand tons of waste across the portfolio.

Social Achievements

• Launched a Portfolio Employee Support Fund (USD 10 million) supporting over 12,000 portfolio company employees.
• Launched PG Academy, a platform delivering flexible and scalable learning opportunities, expanding leadership development programs.
• Advanced Stakeholder Benefits Program with pilot programs at three assets.
• Improved Lost Time Injury Frequency Rate (LTIFR) at Ammega from 3.21 in 2018 to 1.20 in 2020.

Governance Achievements

• Launched Climate Change Strategy aligned with TCFD guidelines.
• Integrated ESG considerations into portfolio company board maturity assessment.
• Replaced (restricted) options with (restricted) shares for compensating independent Board members.
• Improved ESG compliance maturity scores across portfolio companies (environmental management, responsible supply chain, anti-bribery/anti-corruption, cybersecurity).

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting portfolio companies' operations and ESG performance.
• Challenges in measuring and managing water usage in infrastructure assets.
• Increased community complaints at one infrastructure asset due to intensified construction.
• Limited governance rights in direct debt investments making ESG engagement challenging.

Mitigation Strategies

• Launched Portfolio Employee Support Fund.
• Implemented standardized approaches for assessing ESG risks in supply chains and climate change (Portfolio Sweeps).
• Developed ESG Roadmap framework for improving portfolio companies' ESG performance.
• Improved approach to understanding resource management and data collection in real estate.
• Leveraged loan refinancings and changes to contractual obligations to engage with borrowers on ESG topics.

Supply Chain Management

Responsible Procurement

• Responsible sourcing guidelines for portfolio companies.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes

Opportunities

• Low-carbon investments

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNPRI

Third-party Assurance: KPMG

UN Sustainable Development Goals

• SDG 2
• SDG 7
• SDG 9
• SDG 13

PG LIFE investments directly contribute to these goals.

Environmental Metrics

ESG Focus Areas

• Tackling climate change
• Realizing employees’ potential
• Achieving ownership excellence and sustainability at scale

Environmental Achievements

• Published first Task Force on Climate-Related Financial Disclosures (TCFD) report
• Developed a 13-year Direct Air Capture (DAC) agreement with Climeworks to remove over 7’000 metric tons of CO2 from the atmosphere
• Continued contribution to nature-based solutions, such as reforestation

Social Achievements

• Expanded employee networks to more than 1’800 employees and 600+ members (50% increase since 2021)
• Established an internal taskforce to coordinate donations to Ukraine via PG Impact, with firm matching all funds received
• Launched Stakeholder Benefits Program in portfolio companies to improve employee well-being and retention

Governance Achievements

• Inclusion in the S&P Global Sustainability Yearbook 2023 and Dow Jones Sustainability Indices (DJSI) for a second year running
• Linked part of executive compensation to select ESG focus areas and goals

Climate Goals & Targets

Environmental Challenges

• Challenging macro environment including the invasion of Ukraine, inflation, higher interest rates, and energy and supply chain constraints
• Difficulty in gathering and assuring ESG data, particularly from mid-market companies
• Challenges associated with investing in countries with limited commitment to GHG emission reduction (e.g., Poland)

Mitigation Strategies

• Partners Group partnered with EY to support portfolio companies in carbon accounting efforts
• Developed a carbon accounting playbook
• Collaborated with external service providers (e.g., BlackRock) to streamline ESG data collection for non-controlled investments
• Established an internal carbon price of USD 50/tCO2e to incentivize emission reduction and fund carbon removal
• Partnered with T echem to identify partners for implementing green features in Warsaw Green project

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Prioritizing procurement from businesses owned by indigenous people (CWP Renewables)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events, natural disasters

Transition Risks

• Increasing costs of decarbonization, implementation of carbon tax

Opportunities

• Investing in the low-carbon economy

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards, TCFD, UN PRI

Certifications: ISO 14001 (CWP Renewables), ISO 45001 (CWP Renewables)

Third-party Assurance: KPMG

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 3 (Good Health and Well-being)
• Other SDGs through PG LIFE investments

Investments and initiatives contribute to various SDGs through core business activities and PG LIFE strategy

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Gallup Exceptional Workplace Award (KinderCare Education)
• WELL Health-Safety Rating (KinderCare Education)
• ISO 14001 and ISO 45001 certifications (CWP Renewables)

Environmental Metrics

ESG Focus Areas

• Climate change
• Human rights and labor practices
• Working conditions
• Health and safety
• Talent attraction and retention
• Diversity, equity and inclusion
• Good governance
• Risk management
• Corruption and bribery
• Legal and regulatory environment
• Responsible investment
• Data and cybersecurity

Environmental Achievements

• Achieved net zero emissions by 2030 in all corporate activities
• Denver office powered by renewable energy
• Expanded Sustainability Strategy to include full investment portfolio (100% of AuM)
• More than 60 portfolio companies with active carbon-reduction initiatives aligned with the Paris Agreement
• 7.5bn USD committed to investing in renewables
• 28.8% GHG emissions reduction (baseline: 2019, Scope 1, 2, 3)
• 13,579 tons of CO2e removed and stored (9,829 nature-based, 3,750 technology-based)

Social Achievements

• Launched Sustainability Office
• Hosted Entrepreneurial Ownership Summits in North America, Europe, and Asia
• Improved data collection processes, achieving 100% sustainability data collection from controlled Private Equity and Infrastructure assets
• More than 50% of employees in the portfolio companies are women
• Increased average mandatory training hours per employee
• Confluent Health achieved an ‘Excellence in Wellness’ Award
• Pharmathen joined the UN Global Compact and achieved EcoVadis Bronze
• Ammega earned a GOLD sustainability rating for 2023 from EcoVadis
• Version 1 was given a ‘Best Workplace for Women in 2023’ Award in the UK and Ireland
• PG Gives Back supported Chosen Children Village
• PG Impact provided humanitarian aid after the Türkiye/Syria earthquake

Governance Achievements

• Formal alignment with the Net Zero Investment Framework (NZIF)
• Conducted a double materiality assessment (DMA)
• Enhanced governance routines and data management
• Executive compensation linked to sustainability targets (20% of qualitative assessment)
• Improved tracking of strategic sustainability initiatives through PG Alpha
• Introduced sustainability-linked loans (SLLs) in the majority of new direct-lending investments in Europe
• Developed a comprehensive Supplier Code of Conduct
• Zero confirmed incidents of corruption in 2023

Climate Goals & Targets

Environmental Challenges

• Scarcity of sustainability data in private markets (less than 30% of regulatory data received for over 1,300 investments)
• Climate-related physical risks (extreme weather events) and transition risks (regulatory changes, market shifts) affecting portfolio performance
• Data security and privacy risks
• Diversity and inclusion challenges in the technology industry

Mitigation Strategies

• Improved data collection and validation processes
• Systematic assessment of climate-related risks and opportunities in the portfolio
• Comprehensive cyber-baselining exercises across the direct lead Private Equity and Infrastructure portfolio
• Enhanced cybersecurity systems
• Tailored employee-engagement strategies and employee-incentive initiatives
• Diversity and inclusion training

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Heatwaves
• Rising sea levels

Transition Risks

• Regulatory changes
• Market shifts
• Changes in customer expectations
• Carbon-focused policy making

Opportunities

• Investments in renewable energy
• Energy efficiency improvements
• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, Swiss Code of Obligations (Article 964a-c)

Third-party Assurance: KPMG

UN Sustainable Development Goals

• SDG 3 (Good Health and Well-being)
• SDG 7 (Affordable and Clean Energy)
• Other SDGs

PG LIFE strategy focuses on investments contributing to UN SDGs through core business activities

Awards & Recognition

• Inclusion in the S&P Global Sustainability Yearbook
• Inclusion in the Dow Jones Sustainability Index
• Top-quartile UN PRI ratings