Responsibility

KSL Capital Partners Responsible Investment Policy

Introduction

The purpose of this Responsible Investment (“RI”) Policy is to define KSL’s approach to integrating environmental, social and governance (“ESG”) risks and opportunities into investments made through its private equity funds. We are committed to exhibiting leadership in corporate citizenship throughout our business operations. Throughout our history of investing exclusively in travel and leisure businesses, we have considered ESG issues that may affect our prospective investments and the surrounding communities. We believe that effective management of ESG issues is critical to preserving and creating long-term value for investors, operators, employees, guests and communities. We continually seek opportunities to improve our ESG approach and policies.

Responsible Investment Policy

We will consider and manage material ESG risks, opportunities and impacts within our firm and throughout the diligence, stewardship and exit of our investments. We strive to operate in accordance with industry standards such as the United Nations Principles for Responsible Investment and American Investment Council Guidelines for Responsible Investment while complying with all applicable laws and regulations. This policy will apply to all private equity investments made by KSL, and it will be interpreted in accordance with local laws and regulations. In accordance with our fiduciary duties to our clients, this investment policy provides that we:

• Maintain the highest standards of ethical conduct to ensure excellence in KSL’s daily operations. This includes ensuring that all employees receive this policy and related ESG information, providing opportunities for employees to engage in ESG training and education, and encouraging all employees to be good citizens in their communities by supporting their charitable efforts.
• Identify material ESG issues using internal and external resources throughout the due diligence process to avoid or mitigate substantial risk, as well as to capitalize on opportunities that also further our ESG goals.
• Work with our portfolio companies during our ownership period to identify and support improvements in ESG issues during the life of our investments and beyond.
• Maintain and enhance resources to support our ESG commitments. This includes developing internal resources and collaborating with leaders in sustainable business, investments, and the travel and leisure industries.
• Encourage dialogue with our limited partners and other stakeholders regarding how we can better address ESG issues in accordance with their core values and investment initiatives.
• Promote transparency and accountability. Include ESG matters at least annually in  reports to limited partners.

RI Governance and Management

KSL’s Chief Operating Officer and Management Committee have ultimate responsibility for all ESG matters. They are supported in ESG oversight by KSL’s General Counsel, Chief Compliance Officer, and ESG Manager. In order to support the implementation of this RI policy, we have internal resources that will enhance the efficacy and overall incorporation of ESG issues into our investments and business practices. We seek to foster a corporate culture that engages employees in our ESG goals by doing the following:
 

ESG Considerations in Investment Analysis and Due Diligence

ESG issues present regulatory, market, reputational and operational risks and opportunities that should be considered when analyzing a prospective investment. Our process for identifying ESG risks and opportunities prior to committing to a potential investment is as follows:

We will screen all investments for alignment with our investment theses within travel and leisure.

We will use the following as a non-exhaustive guide for relevant considerations of a target investment’s ESG risks and opportunities:

• Environmental:  Pre-existing environmental conditions, physical and transition risks from climate change, greenhouse gas emissions, pollution generation, energy sources and efficiency, water sources and efficiency, waste generation and management, recycling programs, resource conservation, biodiversity, chemical safety, and potential impact of natural disasters.
• Social:  Equal employment, diversity equity and inclusion, labor laws, building safety, political risks and involvement, fair compensation, worker and customer health and safety, human rights abuses, charitable contributions and community relations and engagement.
• Governance:  Transparency, accountability, internal controls, risk management, executive and management compensation, organization structure, diversity of workforce, data security, conflicts of interest, and legal and regulatory compliance.

ESG Considerations for Portfolio Companies

Our consideration of ESG risks and opportunities continues through the life of an investment as necessary. In accordance with the onboarding plan established during the investment analysis process, our asset managers will work with each portfolio company’s management team to increase awareness, mitigate ESG risks and create value through ESG opportunities. This will be done by:

• Encouraging and empowering portfolio company management teams to advance their own independent, robust approaches to ESG and sustainability management.
• Providing ESG policies and other ESG information to portfolio companies’ management teams when relevant.
• Ensuring that the risks and opportunities are properly documented throughout the investment and mitigated or capitalized to the fullest extent possible.
• Supporting and monitoring each portfolio company’s management team to identify any new ESG risks and opportunities as they may arise with changing circumstances in the community, environment, and nature of the company.