TPG Capital Advisors, LLC. An investor initiative in partnership with UNEP Finance Initiative and UN Global Compact

Transcription

1 RI TRANSPARENCY REPOR T TPG Capital Advisors, LLC An investor initiative in partnership with UNEP Finance Initiative and UN Global Compact

2 About this report The PRI Reporting Framework is a key step in the journey towards building a common language and industry standard for reporting responsible investment (RI) activities. This RI Transparency Report is one of the key outputs of this Framework. Its primary objective is to enable signatory transparency on RI activities and facilitate dialogue between investors and their clients, beneficiaries and other stakeholders. A copy of this report will be publicly disclosed for all reporting signatories on the PRI website, ensuring accountability of the PRI Initiative and its signatories. This report is an export of the individual Signatory organisation s response to the PRI during the 2017 reporting cycle. It includes their responses to mandatory indicators, as well as responses to voluntary indicators the signatory has agreed to make public. The information is presented exactly as it was reported. Where an indicator offers a response option that is multiple-choice, all options that were available to the signatory to select are presented in this report. Presenting the information exactly as reported is a result of signatory feedback which suggested the PRI not summarise the information. As a result, the reports can be extensive. However, to help easily locate information, there is a Principles index which highlights where the information can be found and summarises the indicators that signatories complete and disclose. Understanding the Principles Index The Principles Index summarises the response status for the individual indicators and modules and shows how these relate to the six Principles for Responsible Investment. It can be used by stakeholders as an at-a-glance summary of reported information and to identify particular themes or areas of interest. Indicators can refer to one or more Principles. Some indicators are not specific to any Principle. These are highlighted in the General column. When multiple Principles are covered across numerous indicators, in order to avoid repetition, only the main Principle covered is highlighted. All indicators within a module are presented below. The status of indicators is shown with the following symbols: Symbol Status The signatory has completed all mandatory parts of this indicator The signatory has completed some parts of this indicator This indicator was not relevant for this signatory - The signatory did not complete any part of this indicator The signatory has flagged this indicator for internal review Within the table, indicators marked in blue are mandatory to complete. Indicators marked in grey are voluntary to complete. 1

3 Principles Index Organisational Overview Principle General Indicator Short description Status Disclosure OO 01 Signatory category and services Public OO 02 Headquarters and operational countries Public OO 03 Subsidiaries that are separate PRI signatories Public OO 04 Reporting year and AUM Public OO 05 Breakdown of AUM by asset class OO 06 How would you like to disclose your asset class mix Asset mix disclosed in OO 06 Public OO 07 Fixed income AUM breakdown n/a OO 08 Segregated mandates or pooled funds n/a OO 09 Breakdown of AUM by market Private OO 10 RI activities for listed equities n/a OO 11 RI activities in other asset classes Public OO 12 Modules and sections required to complete OO End Module confirmation page - n/a 2

4 Strategy and Governance Principle General Indicator Short description Status Disclosure SG 01 RI policy and coverage Public SG 02 Publicly available RI policy or guidance documents Public SG 03 Conflicts of interest Public SG 04 Private SG 05 RI goals and objectives Public SG 06 Main goals/objectives this year Private SG 07 RI roles and responsibilities Public SG 08 RI in performance management, reward and/or personal development Private SG 09 Collaborative organisations / initiatives Public SG 10 Promoting RI independently Public Dialogue with public policy makers or SG 11 Private standard setters SG 12 ESG issues in strategic asset allocation Public SG 13 SG 14 SG 15 SG 16 Long term investment risks and opportunity Allocation of assets to environmental and social themed areas ESG issues for internally managed assets not reported in framework ESG issues for externally managed assets not reported in framework Private Private n/a n/a SG 17 Innovative features of approach to RI Private SG End Module confirmation page - 3

5 Direct Private Equity Principle General Indicator Short description Status Disclosure PE 01 Breakdown of investments by strategy Private PE 02 Typical level of ownership Private PE 03 Description of approach to RI Private PE 04 Investment guidelines and RI Public PE 05 Fund placement documents and RI Public PE 06 Formal commitments to RI Private PE 07 Incorporating ESG issues when selecting investments Public PE 08 Types of ESG information considered in investment selection Public PE 09 Encouraging improvements in investees Private PE 10 ESG issues impact in selection process Private PE 11 Proportion of companies monitored on their ESG performance Public PE 12 Proportion of portfolio companies with sustainability policy Public PE 13 Actions taken by portfolio companies to incorporate ESG issues into operations Private PE 14 Type and frequency of reports received from portfolio companies Private PE 15 Disclosure of ESG issues in pre-exit Private PE 16 PE 17 PE 18 ESG issues affected financial/esg performance Examples of ESG issues that affected your PE investments Disclosure of ESG information to public and clients/beneficiaries Private Private Public PE 19 Approach to disclosing ESG incidents Private PE End Module confirmation page - 4

6 TPG Capital Advisors, LLC Reported Information Public version Organisational Overview PRI disclaimer This document presents information reported directly by signatories. This information has not been audited by the PRI Secretariat or any other party acting on their behalf. While this information is believed to be reliable, no representations or warranties are made as to the accuracy of the information presented, and no responsibility or liability can be accepted for any error or omission. 5

7 Basic Information OO 01 Mandatory Public Gateway/Peering General OO 01.1 Select the services you offer. Fund management % of assets under management (AUM) in ranges <10% 10-50% >50% Fund of funds, manager of managers, sub-advised products Other, specify Advisory services as defined by PRI % of assets under management (AUM) in ranges <10% 10-50% >50% Execution and advisory services OO 02 Mandatory Public Peering General OO 02.1 Select the location of your organisation s headquarters. United States OO 02.2 Indicate the number of countries in which you have offices (including your headquarters) >10 OO 02.3 Indicate the approximate number of staff in your organisation in full-time equivalents (FTE). FTE 900 6

8 OO 02.4 Additional information. [Optional] TPG has an international staff of approximately 900 employees, operating professionals, senior advisors, and field ops advisors. The number of investment professionals globally is approximately 475, that includes operating professionals, fundraising, Central team, public relations and excludes interns, as of 12/31/16. Field ops advisors are primarily non-employee advisors fully dedicated to TPG and senior advisors are primarily non-employee advisors with varying time commitments. Our back and middle office professionals include, among other things, finance, HR, legal and compliance, IT/business solutions, office administration and support. TPG is very focused on strengthening the firm given the diversification of our business and growing success and momentum in our investment strategy and fundraising. In 2016, one notable addition to the firm leadership was the elevation of Joann Harris to TPG Chief Compliance Officer. In addition, TPG launched three new businesses including PACE Holdings, Arrow Ridge Capital, and The Rise Fund. OO 03 Mandatory Public Descriptive General OO 03.1 Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right. Yes No OO 04 Mandatory Public Gateway/Peering General OO 04.1 Indicate the year end date for your reporting year. 31/12/2016 OO 04.2 Indicate your total AUM at the end of your reporting year, excluding subsidiaries you have chosen not to report on. trillions billions millions thousands hundreds Total AUM Currency USD Assets in USD OO 06 Mandatory Public Descriptive General New selection options have been added to this indicator. Please review your prefilled responses carefully. OO 06.1 How you would like to disclose your asset class mix. as percentage breakdown Internally managed (%) Externally managed (%) Listed equity 0 0 7

9 Fixed income 0 0 Private equity Property 0 0 Infrastructure 0 0 Commodities 0 0 Hedge funds 0 0 Forestry 0 0 Farmland 0 0 Inclusive finance 0 0 Cash 0 0 Other (1), specify 0 0 Other (2), specify 0 0 as broad ranges OO 06.2 Publish our asset class mix as per attached image [Optional]. OO 06.3 Provide contextual information on your AUM asset class split. [Optional] Our private equity funds include publicly listed equity. Gateway asset class implementation indicators OO 11 Mandatory Public Gateway General OO 11.1 Select the internally managed asset classes in which you addressed ESG incorporation into your investment decisions and/or your active ownership practices (during the reporting year). Private equity None of the above 8

10 OO 11.3 Additional information. [Optional] ESG factors are incorporated into the due diligence process, which is embedded in the Investment Review Committee and evaluates ESG issues as part of TPG's due diligence process. When reviewing investments we conduct a systematic review and risk assessment for the particular sector and industry. The ESG team initiates review at the early stages of the investment review process based on TPG ESG principles: o Essential to identify issues with the sustainability team at an early stage, before it goes to early warning o Diagnostics and tool kits to identify risk and value o Internal guidelines, training and case studies on TPG internal web site (i.e., TPGNet) for all deal and ops professionals to access and learn from as well as annual ESG training for all new hires o Deal team support o Topic/domain/policy specific consultants o 100 day planning o Flow through to operational norms/practices Investment Committee materials have information included on ESG, where relevant. Moreover, TPG's Responsible Investment ("RI")/ESG policy is communicated in a variety of ways to the firm's employees. Such communications include, but are not limited to, firm updates, new hire training, TPG's internal website, newsletters, individual meetings, sustainability conferences and events. Additionally, TPG provides internal ESG guidelines, training and case studies for all deal and operations professionals. Beyond using TPGNet as a tool to share and educate our professionals on TPG's policy and program, we also provide RI/ESG-focused training for all new hires. During the new hire training sessions, the ESG team will provide a detailed session on TPG's Global ESG & Sustainability program, giving training on a wide range of topics including, but not limited to, our Global ESG & Sustainability Policy, ESG program methodology, TPG's approach and our ESG Program key themes and strategies. We also provide example due diligence case studies, as well as, highlight portfolio value creation stories (through videos/case studies/portfolio company guest speakers) during these annual training sessions. In addition to the fore-mentioned, we also provide ESG due diligence focused training sessions for all deal professionals. We invite all TPG colleagues to the annual Sustainability Leadership Council (SLC) summit, where we share best practices, tackle challenges and identify cross-portfolio opportunities. We host regular SLC educational webinar sessions and have external speakers present on various ESG matters or discuss best practices based on their experience or observations. And finally, we periodically invite Sustainability leaders from our portfolio companies to speak and highlight their ESG work at our global firm update meetings. 9

11 TPG Capital Advisors, LLC Reported Information Public version Strategy and Governance PRI disclaimer This document presents information reported directly by signatories. This information has not been audited by the PRI Secretariat or any other party acting on their behalf. While this information is believed to be reliable, no representations or warranties are made as to the accuracy of the information presented, and no responsibility or liability can be accepted for any error or omission. 10

12 Investment policy SG 01 Mandatory Public Core Assessed General New selection options have been added to this indicator. Please review your prefilled responses carefully. SG 01.1 Indicate if you have an investment policy that covers your responsible investment approach. Yes SG 01.2 Indicate the components/types and coverage of your policy. Select all that apply Policy components/types Policy setting out your overall approach Formalised guidelines on environmental factors Formalised guidelines on social factors Formalised guidelines on corporate governance factors Asset class-specific RI guidelines Sector specific RI guidelines Screening / exclusions policy Other, specify (1) Other, specify(2) Coverage by AUM Applicable policies cover all AUM Applicable policies cover a majority of AUM Applicable policies cover a minority of AUM SG 01.4 Indicate what norms you have used to develop your investment policy that covers your responsible investment approach. UN Global Compact Principles UN Guiding Principles on Business and Human Rights Universal Declaration of Human Rights International Bill of Human Rights International Labour Organization Conventions United Nations Convention Against Corruption OECD Guidelines for Multinational Enterprises Other, specify (1) other (1) description the Guidelines for Responsible Investment by the American Investment Council - Other, specify (2) 11

13 other (2) description the Guidelines for Disclosure and Transparency in Private Equity - Other, specify (3) other (3) description the Invest Europe Code of Conduct - None of the above No SG 01.6 Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional] TPG's Sustainability and ESG Program supports the firm's long standing consideration of environmental, health, and safety practices in due diligence, investment decisions, and operations. The broad set of sustainability issues (including social and governance issues) have a material influence on assessments of risk, valuation, profitability, and opportunity across our portfolio. Our focus on sustainability and ESG issues enables: Better investment decisions Enhanced results for investors, portfolio companies, stakeholders and TPG TPG companies to be better global citizens TPG's commitment is to: Incorporate sustainability and ESG considerations into our investment diligence and decisions Ensure that sustainability and ESG practices are implemented and that measurable results are achieved in our companies and our operations Strive for greater transparency from our companies SG 02 Mandatory Public Core Assessed PRI 6 New selection options have been added to this indicator. Please review your prefilled responses carefully. SG 02.1 Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document. Policy setting out your overall approach URL URL/Attachment 12

14 URL Attachment (will be made public) Formalised guidelines on environmental factors Formalised guidelines on social factors Formalised guidelines on corporate governance factors We do not publicly disclose our investment policy documents SG 02.4 Additional information [Optional]. We make general guidelines publicly available and in 2016, TPG also made its annual 'GES' report publically available. Our GES report not only includes our overall ESG strategy, but also details our Sustainability and ESG Global Policy; our systematic approach to ESG through the stages of pre-investment, ownership and exit; as well as including case studies and our goals. Please refer back to responses for previous questions for the link. SG 03 Mandatory Public Core Assessed General SG 03.1 Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process. Yes SG 03.2 Describe your policy on managing potential conflicts of interest in the investment process. TPG may, from time to time, be presented with investment opportunities that fall within the investment objectives of affiliated TPG funds and other investment vehicles (each, a "TPG Fund" and, collectively, "TPG Funds"). In such circumstances, TPG will generally have significant latitude in determining the allocation of such opportunities among such affiliated TPG Funds, and will make such determinations in its sole discretion, in accordance with the obligation to offer provision in the applicable partnership agreements, constitutive documents, and any other applicable contractual obligations binding on TPG, the general partner or TPG Fund. In the event that such contractual obligations are not determinative, which may be the case frequently; TPG will allocate such investment opportunity according to TPG's allocation principles and policies. These principles and policies are based on factors that TPG reasonably determines in good faith to be fair and reasonable and are described in the applicable private placement memorandum ("PPM"). Generally, the advisory committee for the applicable TPG Fund will advise the general partner on certain potential conflicts of interest and such other items as are contemplated in the applicable partnership agreement. (Continue to SG 3.3, below) No SG 03.3 Additional information. [Optional] (Continued from SG 3.2, above) In addition, a conflicts of interest review is conducted at least annually as part of the Form ADV update process to ensure that the Adviser is properly disclosing any actual or potential conflicts of interest. The Adviser personnel are aware of the need to consider any potential new conflicts that arise during the course of the year and whether such potential conflicts require further escalation to the General Counsel, Chief Compliance Officer or a Fund's Advisory Committee, pursuant to the Firm's policies and procedures or applicable fund documents. Some of the ongoing assessments of conflicts of interest include reviews of investment allocations when a potential investment is permissible for more than one fund, when one TPG-sponsored fund sells a portfolio 13

15 company to another TPG-sponsored fund, as well as when the adviser to one fund is seeking to enter into a NDA with a new potential target. Finally, on an annual basis and ongoing as updated by the respective individuals, TPG personnel complete a conflicts of interest questionnaire in which a series of personal questions are asked regarding, for example, family member positions on public boards. This is the same questionnaire that new hires are asked to complete as part of their onboarding process. This information is then used to ensure that any potential personal items that could conflict with fund or firm activity are addressed as needed. For example, membership on a public board by a new hire would either be approved or denied for continuation or if approved, the issuer name added to the Firm's Monitoring List. Additionally, the Firm's outside counsel is engaged periodically to conduct an search containing search terms related to any disclosed personal conflicts of interest, as may be appropriate. TPG generally provides a more detailed description of these and other potential conflicts of interest to our investors in the "Conflicts of Interest" (or substantially similar) subsection of the "Certain Investment Considerations" section of the PPM for the applicable TPG Fund. Additionally, information regarding conflicts of interest is publicly available in the Form ADV for our SEC-registered investment advisers. For example, please refer to Item 11 in the Form ADV Part 2A for TPG Capital Advisors, LLC, which is publicly available at: Objectives and strategies SG 05 Mandatory Public Gateway/Core Assessed General SG 05.1 Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities. Quarterly or more frequently Biannually Annually Less frequently than annually Ad-hoc basis It is not reviewed SG 05.2 Additional information. [Optional] The Sustainability and ESG team sets annual priorities that are reviewed with TPG's Chief Operating Officer. They guide the direction of the Sustainability and ESG Program. The objectives are reviewed mid-year as part of the TPG performance review process. In addition, we provide updates at the TPG firm forum meeting to highlight Sustainability and ESG work throughout the year. For example, we have provided updates on ESG due diligence, annual sustainability and ESG performance self-assessment and specific portfolio company progress. Governance and human resources SG 07 Mandatory Public Core Assessed General SG 07.1 Indicate the roles present in your organisation and for each, indicate whether they have oversight and/or implementation responsibilities for responsible investment. 14

16 Roles present in your organisation Board members or trustees Chief Executive Officer (CEO), Chief Investment Officer (CIO), Investment Committee Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Other Chief-level staff or head of department, specify Chief Operating Officer (COO) Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Portfolio managers Investment analysts Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Dedicated responsible investment staff Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment External managers or service providers Oversight/accountability for responsible investment Implementation of responsible investment No oversight/accountability or implementation responsibility for responsible investment Investor relations Other role, specify (1) Other role, specify (2) SG 07.2 For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities. Since its founding, TPG has focused on responsible investing through the life-cycle of our private equity investments. TPG has dedicated full-time resources to support its long-standing commitment to the Sustainability and ESG Program. We have a Sustainability and ESG team of experts working with the deal team members on investment due diligence, as well as, our portfolio companies in order to help manage ESG issues, as appropriate for the industry, sector and geography. Sustainability and ESG is an important aspect of our business, and our strong core principles and practices enable us to address these issues in an integrated way across the Firm. Such decisions are incorporated into our investment decisions through rigorous due diligence, governance, management and operation of our portfolio companies. We strive to be systematic to measure our results and to be transparent. We engage in active discussions with our investors and limited partners to align with their interests in, and perspectives on, Sustainability and ESG. We have a dedicated team of professionals who have the responsibility to advance these principles and practices within the firm and our portfolio companies. We recognize the value of the embedded wisdom and experience on Sustainability and ESG and we share that knowledge and best practices with all our portfolio companies, with whom we are partners on this initiative. TPG leadership are deeply committed to the view that investment capital and our ability to deploy it has a critical role to play in addressing challenges, needs and human aspirations in vital areas such as education, healthcare, access 15

17 to capital and economic opportunities, transportation and communications, energy, adequate and clean water, clean air, and waste disposal. We see a positive opportunity for TPG and our focus on Sustainability and ESG to have an impact on these issues, and, as we address these dynamic challenges, we will continue to dedicate and leverage our global expertise and network. ESG challenges faced by the firm and its portfolio companies vary depending on a number of factors, each with different degrees of importance or relevance. There are various ways TPG monitors these challenges, as well as identifying opportunities for ESG enhancement, both during the pre-investment phase and ownership. One way is through our ESG due diligence process, which is embedded in the Investment Review Committee and evaluates ESG issues as part of TPG's due diligence process. We have diagnostics and tool kits to identify risk and value, internal guidelines and training for deal and operational professionals, deal team support and external network and resources. We also manage risk and opportunity through our annual portfolio company Sustainability and ESG Performance Self-Assessment, which we request our portfolio companies to complete. TPG board members are able and encouraged to communicate to the portfolio company executives any appropriate ESG guidelines and expectations, under the direction of the TPG Sustainability and ESG team. Additionally, TPG's Sustainability and ESG team works directly with and leverages the expertise of the TPG operations professionals to drive portfolio company improvements. See additional information in SG 07.4 SG 07.3 Indicate the number of dedicated responsible investment staff your organisation has. Number 5 SG 07.4 Additional information. [Optional] TPG has dedicated considerable resources to support its long-standing commitment to the Sustainability and ESG Program. We have a Sustainability and ESG team of experts working with our global portfolio companies to help manage ESG issues in a variety of ways, for example, helping to facilitate NGO partnerships, policy and goal setting, striving for greater transparency from our companies or on-boarding into the TPG Sustainability Leadership Council. In order to integrate the Sustainability and ESG Program across the firm, and as mentioned above, the Sustainability and ESG team reports directly to TPG's Chief Operating Officer, Jerome Vascellaro. TPG has a dedicated team comprising of: Elizabeth Lowery - Senior Director, 'Leads Sustainability Program and Strategy', working with Edward Norton - Senior Advisor, 'Deal Diligence, Policy & NGO Stakeholders', Emily Croft- Baker - Manager, 'Communications, Reporting & Disclosure', Kirk Hourdajian - Advisor, 'Operations within Portfolio Companies', William Reilly - TPG's 2016 Senior Advisor and former U.S. EPA Administrator, 'Public Policy and Regulatory'. While the team may have certain focus areas, each individual also works in various capacities across the entire program as needed. Additionally, the TPG External Affairs team works directly with the Sustainability and ESG team to help broaden the message of our program and share it with industry media and external stakeholders. And the team also engages additional external resources, as needed, for due diligence and portfolio company initiatives. External experts that have been engaged in the past include ERM, Environ and PwC. Promoting responsible investment SG 09 Mandatory Public Core Assessed PRI 4,5 New selection options have been added to this indicator. Please review your prefilled responses carefully. 16

18 SG 09.1 Select the collaborative organisation and/or initiatives of which your organisation is a member or in which it participated during the reporting year, and the role you played. Select all that apply Principles for Responsible Investment Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] TPG actively promotes and supports the PRI when discussing our ESG approach and involvement with external stakeholders, such as, LPs, industry groups, NGO's and our portfolio companies. In addition to ad-hoc in-person PRI meetings and regular dialogue with GPs and LPs regarding PRI and benefits of becoming a PRI signatory, some of the ways in which we've participated include: Part of outreach sub-committee for the PRI PEAC; keynote address at PEI RIF in 2013, 2014 & 2016; PRI inperson signatory meetings And involvement during the 2016 reporting year as follows: March - TPG Capital submits PRI Framework report 2015/16 April - Beth Lowery participates in PRI Shaping the future of RI New York May - TPG sponsors and participates as panel members; TPG's 2016 Senior Advisor and former U.S. EPA Administrator William Reilly - keynote speaker, at the PRI sponsored, PEI RIF 2016 June - TPG produces its second annual 'GES' Sustainability report with a section detailing TPG alignment of the six PRI principles making it publically available June - Emily Croft-Baker and TPG ESG intern participate in PRI shaping the future of RI London August - Response to PRI consultation September - PRI Signatory meeting in Singapore AFIC La Commission ESG Asian Corporate Governance Association Australian Council of Superannuation Investors BVCA Responsible Investment Advisory Board Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced 17

19 TPG shared a case study Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] CDP Climate Change Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] TPG helps support the portfolio companies that report under CDP CDP Forests CDP Water Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] TPG helps support the portfolio companies that report under CDP water CFA Institute Centre for Financial Market Integrity Code for Responsible Investment in SA (CRISA) Code for Responsible Finance in the 21st Century Council of Institutional Investors (CII) ESG Research Australia Eumedion EVCA Responsible Investment Roundtable 18

20 Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Extractive Industries Transparency Initiative (EITI) Global Investors Governance Network (GIGN) Global Impact Investing Network (GIIN) Global Real Estate Sustainability Benchmark (GRESB) Green Bond Principles Institutional Investors Group on Climate Change (IIGCC) Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Interfaith Center on Corporate Responsibility (ICCR) International Corporate Governance Network (ICGN) Investor Group on Climate Change, Australia/New Zealand (IGCC) International Integrated Reporting Council (IIRC) Investor Network on Climate Risk (INCR)/CERES Local Authority Pension Fund Forum Principles for Sustainable Insurance Regional or National Social Investment Forums (e.g. UKSIF, Eurosif, ASRIA, RIAA), specify Responsible Finance Principles in Inclusive Finance Shareholder Association for Research and Education (Share) United Nations Environmental Program Finance Initiative (UNEP FI) United Nations Global Compact Your organisation s role in the initiative during the reporting period (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] We refer to the United Nations Global Compact for guidance Other collaborative organisation/initiative, specify the Guidelines for Responsible Investment by the American Investment Council

21 Your organisation s role in the initiative during the reporting year (see definitions) Basic Moderate Advanced Provide a brief commentary on the level of your organisation s involvement in the initiative. [Optional] TPG continues to work with other industry bodies to enhance effectiveness in implementing the principles such as the Guidelines for Responsible Investment by the American Investment Council (previously, the Private Equity Growth Capital Council or 'PEGCC'). Following on from 2015, where by TPG participated in PEGCC's July 2015 general ESG Seminar as an attendee and in the November 2015 ESG seminar covering, 'The UN PRI Explained', TPG in 2016 and in collaboration with American Investment Council participated in the May PEGCC ESG seminar in San Francisco. Other collaborative organisation/initiative, specify The Guidelines for Disclosure and Transparency in Private Equity - Your organisation s role in the initiative during the reporting year (see definitions) Basic Moderate Advanced Other collaborative organisation/initiative, specify The Invest Europe Code of Conduct - Your organisation s role in the initiative during the reporting year (see definitions) Basic Moderate Advanced Other collaborative organisation/initiative, specify SG 10 Mandatory Public Core Assessed PRI 4 SG 10.1 Indicate if your organisation promotes responsible investment, independently of collaborative initiatives. Yes 20

22 SG 10.2 Indicate which of the following actions your organisation has taken to promote responsible investment, independently of collaborative initiatives. Provided or supported education or training programmes for clients, investment managers, broker/dealers, investment consultants, legal advisers or other investment organisations Provided financial support for academic or industry research on responsible investment Encouraged better transparency and disclosure of responsible investment practices across the investment industry Spoke publicly at events and conferences to promote responsible investment Wrote and published in-house research papers on responsible investment Encouraged the adoption of the PRI Wrote articles on responsible investment in the media. Other, specify specify description TPG promotes 'RI' through internal education, firm meetings, new hire training as well as, independently collaborating externally with LPs, peer firms and RI industry groups No SG 10.3 Describe any additional actions and initiatives that your organisation has taken part in during the reporting year to promote responsible investment [Optional] TPG engagement examples whereby we have promoted RI initiatives: ESG seminar with PEGCC in San Francisco in May 2016 Dialogue with limited partners on climate change and to educate on TPG's portfolio company annual selfassessment process ESG-specific presentation made to the attending limited partners, as well as side-bar meetings, during the 2016 annual investors conference event for global fund investors One-on-one discussions and calls with limited partners TPG participation in surveys and industry reports on trends and best practices. For example, PRI consultation papers and 2016 ERM ESG survey, which TPG interviewed for as part of the study Regular participants in U.S. and U.K. based P.E. peer ESG working groups to discuss responsible investment practices and policies examples include: TPG's Kirk Hourdajian created and co-hosted quarterly ESG Investors Group meetings (including 20+ leading investment management firms in the San Francisco-Bay area) and TPG's Emily Croft-Baker, regularly attended U.K. GP gatherings, led by James Stacey, ERM. Most recent discussion example was with Russell Picot, G20 Financial Stability Board Task Force on Climate related Financial Disclosures (including 15+ leading investment management firms in London and Europe) Attended various ESG and RI industry conferences, as well as being on panels or keynotes, all with the objective of working as an active participant from a global alternative investment firm. Corporate Eco Forum, SuperReturns - Berlin (panel speaker on ESG value creation) Greenbiz, UN Investor Summit, Ceres, PEI RIF (panel and keynote), SuperInvestor US 2016 (ESG in Private Equity panel), AVCJ - Singapore (ESG Panel) and member of ILPA GP panel, along with David Blood and Ramez Sousou Produced TPG's second 'GES' Sustainability report which was made public on TPG website Hosted the eighth annual Sustainability Leadership Council Summit Collaborated with 14 summer sustainability interns across 7 portfolio companies (including TPG itself) over the past three years 21

23 Hosted a TPG summer intern for 2 months out of the London office, training her in ESG/Responsible Investment. The TPG intern attended the PRI 'Shaping the Future of Responsible Investment' event with Emily Croft-Baker in June. Veterans Initiative Summit - TPG served as co-hosts and facilitators with The Blackstone Group, The Carlyle Group and KKR, at a summit in November 2016 to share best practices of veterans hiring programs including, TPG portfolios companies: CAA, Caesars Entertainment, Cushman& Wakefield, Enlivant, LifeTime Fitness, RentPath, Taylor Morrison, The Warranty Group, Uber and XOJET. The Summit convened representatives from the White House, U.S. Military, U.S. Departments of Labor and Veterans Affairs and private equity portfolio companies, to advocate and advance veteran hiring, retention, and career development. Additionally, Social Impact is a TPG global initiative focused on enabling TPG employees to make a tangible difference in their local communities while creating growth and leadership opportunities. At TPG we invest in building long-term value that benefits all stakeholders. Included in our values is a sense of shared responsibilities and commitment to the environment. As individuals, we serve on several governing and advisory boards of local, national and international non-profit organizations dedicated to environmental efforts, including: California Academy of Sciences, The Wilderness Society, The Nature Conservancy - CA Leadership Council, The Grand Canyon Trust, The Conservation Lands Foundation, and the Wyss Foundation. TPG also provides grant funding to local and national nonprofits supporting our employees active engagement. Examples of environmental and conservation organizations that have received grants, include: - The Nature Conservancy - Working to protect ecologically important lands and waters for nature and people in California and around the world. - California Academy of Sciences - Located in San Francisco, the CAS is a scientific and educational institution dedicated to exploring, explaining and sustaining life on Earth. Other local and international organizations receiving grants, include: - Grameen America - Providing microloans and training to women who live in poverty build small businesses to create better lives for their families. - Common Sense Media - Empowering parents and teachers by providing innovative tools and trusted advice to help them harness the power of media and technology as a positive force in all kids' lives. - Boys & Girls Clubs of San Francisco and Fort Worth - Providing after-school and services and inspiration to young people from disadvantageous backgrounds to realize their full potential as productive, responsible and caring citizens. Other examples of organizations that received grants and firm sponsored volunteer activities include: - Swords to Plowshares - Providing assistance, training, housing and legal assistance to veterans in the San Francisco Bay Area. TPG's San Francisco office participates in an annual backpack volunteer event providing backpacks stuffed with essentials to veterans served by Swords to Plowshares. - Meals on Wheels of San Francisco - TPG volunteers assembled and delivered grocery bags to homebound seniors. Boys & Girls Clubs of Fort Worth - Volunteers spent multiple afternoons playing and tutoring kids at a local branch of the FW Boys & Girls Club. In 2016, TPG provided disaster relief assistance related to flooding that impacted southern Louisiana through the Baton Rouge Area Foundation. For Asia - Examples of organizations that received grants and firm sponsored volunteer activities include: -World Food Program - TPG provided food and disaster relief assistance related to the clean-up efforts after Typhoon Haiyan hit the Philippines in November Half the Sky Foundation - Half the Sky is an organization that works in partnership with the Chinese Government to operate orphanages throughout China. TPG's Beijing office has engaged with the organization through volunteer opportunities including a day spent at the local orphanage (New Day) playing and reading to the children. TPG also provided funds and donated consumables and books to address specific needs at the facility. - Operation Smile - Volunteers from TPG's Hong Kong office along with executives from a TPG portfolio company, China Grand Auto worked with Operation Smile to sponsor and coordinate logistics for a mission to Kashgar (near the China-Tajikistan border). Operation Smile provides free surgeries to repair cleft palate and other facial deformities for children around the world. Implementation not in other modules SG 12 Mandatory Public Descriptive PRI 1 New selection options have been added to this indicator. Please review your prefilled responses carefully. 22

24 SG 12.1 Indicate if your organisation executes scenario analysis and/or modelling in which the risk profile of future ESG trends at portfolio level is calculated. We execute scenario analysis which includes factors representing the investment impacts of future environmental trends We execute scenario analysis which includes factors representing the investment impacts of future social trends We execute scenario analysis which includes factors representing the investment impacts of future governance trends We execute other scenario analysis, specify We do not execute such scenario analysis and/or modelling SG 12.2 Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets. We do the following We do not consider ESG issues in strategic asset allocation 23

25 TPG Capital Advisors, LLC Reported Information Public version Direct Private Equity PRI disclaimer This document presents information reported directly by signatories. This information has not been audited by the PRI Secretariat or any other party acting on their behalf. While this information is believed to be reliable, no representations or warranties are made as to the accuracy of the information presented, and no responsibility or liability can be accepted for any error or omission. 24

26 Overview PE 04 Mandatory Public Core Assessed PRI 2 PE 04.1 Indicate if your organisation s investment guidelines for private equity refer to responsible investment. Our investment guidelines do refer to responsible investment PE 04.2 Describe how your organisation s investment guidelines outline your expectations on staff and portfolio companies approach towards ESG issues [Optional]. TPG's Sustainability and ESG Program supports the firm's long standing consideration of environmental, health and safety practices in due diligence, investment decisions and operations. The broad set of sustainability issues (including social and governance issues) have material influence on assessments of risk, valuation, profitability and opportunity, across our portfolio. Our focus on sustainability and ESG issues enables: i) better investment decisions ii) enhanced results for investors, portfolio companies, stakeholders and TPG iii) TPG companies to be better global citizens. TPG's commitment is to: i) incorporate sustainability and ESG considerations into our investment diligence and decisions ii) ensure that sustainability and ESG practices are implemented and that measurable results are achieved in our companies and our operations iii) strive for greater transparency from our companies. Our investment guidelines do not refer to responsible investment We do not have investment guidelines Fundraising of private equity funds PE 05 Mandatory Public Core Assessed PRI 1,4,6 PE 05.1 Indicate if your most recent fund placement documents (private placement memorandums (PPMs) or similar) refer to responsible investment aspects of your organisation. Yes PE 05.2 Indicate how your fund placement documents (PPMs or similar) refer to the following responsible investment aspects of your organisation: Policy and commitment to responsible investment Approach to ESG issues in pre-investment processes Approach to ESG issues in post-investment processes 25

27 PE 05.3 Describe how your organisation refers to responsible investment in fund placement documents (PPMs or similar). [Optional] In our Private Placement Memorandum ("PPM"), due diligence questionnaire, investor inquiries and/or other fundraising documents, the Firm outlines:- Our Global Sustainability and Environmental, Social and Governance Policy That we are signatory to PRI and other industry bodies ESG due diligence as an integral part of the review process pre-investment Our approach post-investment e.g. participation in Annual Sustainability and ESG Performance Self- Assessment and that we have a Sustainability Leadership Council to allow active communication and guidance on ESG-related matters/topics/issues. No Not applicable as our organisation does not fundraise Pre-investment (selection) PE 07 Mandatory Public Gateway PRI 1 PE 07.1 During due-diligence indicate if your organisation typically incorporates ESG issues when selecting private equity investments. Yes PE 07.2 Describe your organisation's approach to incorporating ESG issues in private equity investment selection. Depending on the sector and the company, TPG generally conducts due diligence by reviewing: Compliance with all applicable national laws Adherence to any applicable international global standards and best practices Any outstanding ESG issues related to the involved counterparties Any physical assets to assess condition, community impacts, permitting requirements Operating performance risks, such as, product risks, input/material risks, macro risks Any land use issues, such as, conversion of high conservation forests, impact on protected areas or threatened or endangered species, displacement of indigenous peoples Public information on the investment and the counterparties, including social media Any outstanding stakeholder concerns that would impact the value of the investment, including reputational risk The following due diligence checklist depending on the nature of the investment: 1. What exposure to and existing, emerging and projected litigation or other costs are there for environmental remediation, regulatory compliance violations, operational safety/health/harm issues and emerging regulatory or locale specific mandates? 2. Does the company's operations negatively impact adjacent or downstream communities such as areas of high conservation value or the health of indigenous communities/species? 3. Do any elements of the deal require federal, national, state or local regulatory or other emerging environmental permitting? 4. Is the company currently operating or plan to be operating in any locations or jurisdictions where 'polluter pay' ordinances (such as bay or river fronts), resource scarcity or mandates are under consideration? 5. At the current level of social and environmental diligence, would the same deal be done in the United States at this time? If not, why and at what potential impact in terms of costs/valuation and brand? 26

28 No PE 07.3 Additional information. [Optional] In addition and not limited to, the above due diligence example questions and checklist, we also engage local counsel and/or external expertise/consultants, such as ERM, Environ, and PwC, to work with our deal teams as relevant to the deal, sector, geography and so forth. Areas of focus might include, but are not limited to, compliance, risk management, envrionmental, health and safety, impact assessment and planning, and climate change. PE 08 Mandatory Public Core Assessed PRI 1,3 PE 8.1 Indicate what type of ESG information your organisation typically considers during your private equity investment selection process. Raw data from target company Benchmarks against other companies Sector level data/benchmarks Country level data/benchmarks Reporting standards, industry codes and certifications International initiatives, declarations or standards Engagements with stakeholders (e.g. customers and suppliers) Advice from external resources Other, specify During the due diligence process for certain sectors, we will also review the investment opportunity with nongovernment organizations and conduct a media scan. We do not track this information PE 8.2 Describe how this information is reported to, considered and documented by the Investment Committee or similar. Our ESG due diligence process is embedded in the Investment Review Committee and evaluates ESG issues as part of TPG's due diligence process. We have diagnostics and tool kits to identify risk and value, internal guidelines and training for deal and operational professionals, deal team support and external network and resources. Post-investment (monitoring) PE 11 Mandatory Public Gateway/Core Assessed PRI 2 PE 11.1 Indicate whether your organisation incorporates ESG issues in investment monitoring of portfolio companies. Yes 27