Climate Change Data

Riverstone Holdings LLC

Climate Impact & Sustainability Data (2019, 2020, 2021, 2022, 2023)

Reporting Period: 2019

Environmental Metrics

ESG Focus Areas

  • Natural resource management
  • Health and safety
  • Community and stakeholder impact
  • Climate change
  • Greenhouse gas emissions
  • Governance

Environmental Achievements

  • Riverstone’s total investments in low carbon energy since 2005 have avoided the emission of nearly 100 million cumulative CO2e metric tons.

Social Achievements

  • Established anonymous compliance hotline at the firm and confirmed hotlines in place at all portfolio companies engaged in international business
  • Increased the scope of ESG factors included in the annual portfolio company ESG questionnaire and depth of qualitative and quantitative information collected
  • Enhanced internal ESG initiatives across Riverstone’s offices globally

Governance Achievements

  • Established an ESG committee to serve as a centralized ESG resource for Riverstone personnel
  • First formal review completed of responses to our annual portfolio company ESG questionnaire
  • Conducted materiality assessments to establish standard risk criteria (and potential mitigants) tailored to each investment sector
  • Commenced policy of commissioning compliance audits undertaken for certain high risk portfolio companies each year
  • Established formalized anti-corruption oversight program and related portfolio company questionnaire
  • Adopted a written ESG Policy
  • Designed formal annual portfolio company questionnaire to track ESG performance and help portfolio companies to identify areas for improvement
  • Reviewed and updated ESG Policy with third-party advisors
  • Anti-corruption program reviewed by the former Compliance Counsel Expert to the U.S. Department of Justice

Climate Goals & Targets

Long-term Goals:
  • Develop a strategy to evaluate potential risks that climate change may pose to our current portfolio, assess how our portfolio companies can seek to reduce their impact on climate change and identify opportunities for Riverstone to capitalize on the energy transition to generate strong financial returns for investors
  • Create an internal working group responsible for identifying and increasing our efforts to further the adoption of additional firmwide ESG initiatives and practices
  • Evaluate our firm’s carbon footprint and potential offsets
Medium-term Goals:
  • Develop key performance indicators that can be measured consistently across all portfolio companies
  • Work towards becoming a UN-supported PRI signatory
Short-term Goals:
  • Augment ESG evaluation in our Investment Committee process
  • Achieve greater depth and consistency of responses to ESG portfolio questionnaires by evaluating results of the 2019 portfolio review and engaging with portfolio companies where additional support is needed
  • Ensure the risk evaluation scorecards discussed during our Investment Committee process are carried through into ESG portfolio company monitoring scorecards
  • Incorporate ESG management as a criteria in performance reviews of responsible Riverstone professionals

Environmental Challenges

  • Managing ESG requires continuous focus in a dynamic and ever-changing world.
Mitigation Strategies
  • Continuously adapting and evolving ESG practices.

Supply Chain Management

Responsible Procurement
  • Responsible Sourcing Policy for wood sourcing (Enviva example)

Climate-Related Risks & Opportunities

Reporting Period: 2020

Environmental Metrics

Total Carbon Emissions:4,380 tCO2e (2019, Scope 2 & 3)
Scope 1 Emissions:0 tCO2e

ESG Focus Areas

  • Climate Change
  • Renewable Energy & Decarbonization
  • Governance and Compliance
  • Diversity and Inclusion

Environmental Achievements

  • Raised over $1.9 billion in commitments for renewable energy and decarbonization platform.
  • Developed a climate strategy informed by TCFD recommendations.
  • Assessed climate change risks and opportunities for portfolio companies.
  • Implemented GHG emission monitoring for portfolio companies.
  • Offset Riverstone's own Scope 2 and 3 GHG emissions.

Social Achievements

  • Published commitment to diversity and inclusion (D&I) and created a roadmap for executing D&I initiatives.
  • Established ESG Minimum Expectations (ESG-MEs) for portfolio companies, including D&I metrics.
  • Improved portfolio company performance against ESG-MEs in 2020 compared to 2019.
  • Implemented COVID-19 response prioritizing employee and community safety and welfare.
  • Portfolio company Enviva contributed approximately $75,000 to COVID-19 related activities.

Governance Achievements

  • Became a signatory to the Principles for Responsible Investment (PRI).
  • Established an internal ESG working group.
  • Formalized ESG management as a criterion in annual performance reviews.
  • Enhanced due diligence processes with a proprietary ESG due diligence toolkit.
  • Implemented formalized ESG monitoring scorecards for portfolio companies.

Climate Goals & Targets

Long-term Goals:
  • Develop and implement a GHG mitigation strategy to reduce Riverstone’s operational emissions.
Medium-term Goals:
  • Develop an action plan based on PRI voluntary reporting feedback.
  • Drive ESG performance improvement across the portfolio through increased adherence to ESG-MEs.
Short-term Goals:
  • Increase the number of portfolio companies calculating their GHG footprint.
  • Assess and identify climate change impacts, risks, and opportunities for portfolio companies.
  • Prepare and submit voluntary reporting to PRI in 2021.

Environmental Challenges

  • Addressing climate change impacts and facilitating energy transition across portfolio companies.
  • Improving ESG performance across portfolio companies, particularly regarding GHG emissions and senior leadership responsibility for ESG matters.
  • Ensuring consistent and comprehensive ESG reporting from portfolio companies.
Mitigation Strategies
  • Developed ESG Minimum Expectations (ESG-MEs) and monitoring scorecards.
  • Increased engagement with portfolio companies on ESG matters through designated ESG deal leads.
  • Provided guidance and support to portfolio companies on climate risk management and opportunity capture.
  • Implemented a GHG baseline calculation and annual monitoring requirement for portfolio companies.
  • Developed an offset strategy for Riverstone's own emissions.

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities
  • Investment in renewable energy and decarbonization technologies.

Reporting Standards

Frameworks Used: TCFD, PRI

Reporting Period: 2021

Environmental Metrics

ESG Focus Areas

  • Environmental
  • Social
  • Governance
  • Climate Change

Climate Goals & Targets

Environmental Challenges

  • Climate change poses a significant challenge to business and society.
Mitigation Strategies
  • Supporting the Paris Agreement
  • Implementing TCFD recommendations
  • Developing a strategy to address climate change in the investment process
  • Defining climate risk oversight and management responsibilities
  • Integrating consideration of climate risk and opportunities through the investment lifecycle
  • Actively engaging with portfolio company management to reduce greenhouse gas emissions

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Principles for Responsible Investment, American Investment Council Guidelines for Responsible Investing, TCFD

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:413 metric tons of CO2e (2022, Riverstone operational emissions)
Scope 1 Emissions:7.3 metric tons of CO2e (2022, Riverstone operational emissions)
Scope 2 Emissions:212 metric tons of CO2e (2022, Riverstone operational emissions)
Scope 3 Emissions:193 metric tons of CO2e (2022, Riverstone operational emissions, air travel)

ESG Focus Areas

  • Climate Change
  • Decarbonization
  • Governance
  • Diversity & Inclusion

Environmental Achievements

  • Completed actions to further develop Riverstone’s ESG reporting, resulting in further alignment with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)
  • Engaged Persefoni to collaborate with portfolio companies to track their emissions, yielding disclosure of financed emissions for the first time, including Scope 1 and 2 emissions and significant sources of Scope 3 emissions
  • Performed climate risk assessments to identify physical and transition risks for the majority of the portfolio
  • Renewable power companies within Riverstone’s portfolio abated approximately 120 million metric tons of carbon dioxide since 2005

Social Achievements

  • Strengthened partnership with Howard University by providing summer internships, participating in their career fair and leading on-campus seminars
  • Built ESG capacity at all levels in Riverstone by facilitating training on ESG topics, including unconscious bias and anti-harassment, and providing guidance on effectively utilizing the ESG toolkit
  • Participated in the ESG Data Convergence Initiative (EDCI) to contribute comparable data
  • Two portfolio companies donated resources to support victims of the Ukraine War

Governance Achievements

  • Maintained portfolio company performance against ESG Minimum Expectations (ESG-MEs) and continued to strengthen criteria to drive further improvements in performance
  • Developed an ESG onboarding pack for new portfolio companies
  • Continued to expand Green and Sustainability-Linked Loan investments across credit funds
  • Implemented a formal risk mapping and compliance oversight program

Climate Goals & Targets

Long-term Goals:
  • Net zero emissions by 2050 (for some portfolio companies)
Medium-term Goals:
  • Using the findings from climate risk assessment, enhance engagement with portfolio companies to mitigate climate-related risks, capitalize on opportunities to enhance resilience and assess opportunities to build on risk assessment further by evaluating additional companies and considering sensitivity analysis
Short-term Goals:
  • Continue to further align reporting with the TCFD recommendations and evaluate opportunities to advance risk management and estimate the financial implications of risks
  • Refine GHG accounting across portfolio companies and include any new investments in GHG inventory
  • Consider development of potential targets for emission reductions and support portfolio companies in understanding their emissions and pursuing their own reduction goals

Environmental Challenges

  • Increasing GHG emissions data quality with more of our portfolio companies reporting more granular, “bottom-up” data
  • Working with portfolio companies on GHG emissions reduction initiatives and technologies
  • Managing climate-related risks and opportunities within the portfolio
  • Meeting ESG Minimum Expectations (ESG-MEs) across the portfolio, particularly for smaller companies
Mitigation Strategies
  • Investing in climate solutions and data analytics to decrease the emissions of portfolio companies
  • Leveraging a Screen — Assess — Adapt strategic approach for reviewing portfolio company data and using innovative tools to generate insights into key risks and opportunities
  • Developing an ESG onboarding pack for new portfolio companies
  • Strengthening criteria for ESG-MEs and engaging with portfolio companies to improve performance

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks
  • Extreme weather events (cyclones, wildfires, flooding)
  • Water stress and extreme heat
  • Damage to infrastructure, buildings, equipment, vehicles
  • Supply chain disruptions
Transition Risks
  • Increased carbon taxes and pricing
  • Regulatory changes to oil and gas operations
  • Pressure to reduce emissions throughout the supply chain
  • Decreased fossil fuel demand
  • Market share loss and revenue reduction for some portfolio companies
Opportunities
  • Market growth opportunities for low- or zero-emitting power sources
  • Expansion opportunities for natural gas-fired power generation (short-term)
  • Growth opportunities for renewable energy and electric vehicle charging infrastructure

Reporting Standards

Frameworks Used: TCFD, PCAF, GHG Protocol, EDCI

Sustainable Products & Innovation

  • Green Loans and Sustainability-Linked Loans

Reporting Period: 2023

Environmental Metrics

Scope 3 Emissions:5.1 million metric tons of CO2e in 2022 (financed emissions, 89% of portfolio)

ESG Focus Areas

  • Climate Change
  • Decarbonization
  • Diversity & Inclusion
  • Ethics & Compliance
  • Governance

Environmental Achievements

  • 75% of portfolio collects Scope 1 and 2 GHG emissions data, with 67% collecting Scope 1, 2, and 3 data
  • 40% of portfolio have some form of net-zero initiative
  • IMTT doubled its renewables and vegetable oils/animal fats share of the business since implementing its Greener and Cleaner strategy.
  • IMTT's recent projects created over 800,000 barrels of renewable diesel storage and 450,000 barrels of feedstock storage.
  • Energia Real generated 46,377 MWh of renewable energy and offset 20,174 tCO2e in 2023.
  • VEMO avoided 10,776 tCO2e in GHG emissions in 2023.

Social Achievements

  • Portfolio companies created over 1,800 new jobs in 2023
  • 18% injury rate reduction across the portfolio in 2023
  • Energia Real's social responsibility program included installing solar panels at an autism school and a cerebral palsy-focused NGO.
  • VEMO created 2,201 active jobs and provided 1,306 active leases to underbanked ride-hailing drivers in 2023.

Governance Achievements

  • 89% of portfolio companies have ESG as a standing board agenda item
  • All non-U.S. portfolio companies have internal compliance reporting mechanisms and anti-retaliation policies in place.
  • Riverstone appointed its Assistant General Counsel as Head of ESG.

Climate Goals & Targets

Short-term Goals:
  • Invest in businesses that support the low-carbon transition

Environmental Challenges

  • Data scarcity in private markets
  • Unclear pathways to net zero
  • Increasing polarization on decarbonization
  • Supply chain issues
  • Geopolitics
  • Changing consumer demands
  • Ever-tightening regulations
Mitigation Strategies
  • Revised ESG policy and annual ESG questionnaire
  • Deeper engagement with portfolio companies using a technology platform
  • Ongoing training and accountability of investment professionals
  • Top-down review of third-party ESG consultants
  • Alignment with frameworks from the Sustainable Markets Initiative Private Equity Task Force and Initiative Climat International

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks
  • Water stress
  • Tropical cyclones
  • Wildfires
  • Flooding
  • Extreme heat
Transition Risks
  • Increased carbon taxes
  • Regulatory changes
  • Decreased fossil fuel demand
  • Market shifts
  • Reputation risks
Opportunities
  • Growth in renewable energy and electric vehicle charging

Reporting Standards

Frameworks Used: TCFD, GRI, PCAF, UN Global Compact, Science Based Targets initiative