RESPONSIBLE BUSINESS AND INVESTING - CarVal Investors
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doing well by doing good RESPONSIBLE BUSINESS AND INVESTING ®
E S G
ENVIRONMENTAL
Climate change and greenhouse gas
emissions; resource depletion; water
quality; waste and pollution; deforestation.
SOCIAL
Working conditions and child labor;
local communities including indigenous
communities; conflict; health and safety;
employee relations and diversity.
GOVERNANCE
Executive pay; bribery and corruption;
political lobbying and donations; board
structure and diversity; tax strategy.
At CarVal Investors, we strive to uphold standards of responsibil- 3. Ensure that appropriate personnel have the necessary tools
ity, integrity and discipline in everything we do. From charitable to incorporate ESG factors into investment decision making,
giving to environmental considerations to corporate governance, where such factors are relevant
these principles are at the heart of how we operate our business 4. Provide a governance framework (i.e., the establishment of
and how we carry out our role as a global corporate citizen. On the a Responsible Investing Committee) within which CarVal may
investment side, ESG factors are integrated into our decision-mak- monitor and review the effectiveness and operation of its
ing process. While this document features many of our ESG ini- Responsible Investing Policy
tiatives, below we’ve highlighted three areas we are particularly
focused on today. 5. Implement procedures for the monitoring and reporting of
responsible investment practices at an investment, fund and
Clean Energy and Responsible Investing firm level
Clean energy is the fastest-growing source of new energy in the Inclusion and Diversity
U.S. today, yet the market is nascent and fragmented, making
it an attractive investment opportunity. CarVal has an extensive At CarVal Investors, we believe peak effectiveness comes from an
team focused on five strategies within clean energy investments engaged, talented and diverse workforce. Our approach to inclu-
today that draw upon CarVal’s 34 years of experience investing in sion and diversity takes numerous forms. Our CarVal ’25 Strategy
loan portfolios, corporate securities, structured credit and com- incorporates goals, ongoing action plans, and initiatives which
mercial real estate. These five strategies include: Secured Debt, strive to build and reinforce our inclusion and diversity objectives,
Solar Asset-Backed Securities, C-PACE/Efficiency, Commercial and ensuring we have the right skills, attitudes and behaviors. CarVal is
Industrial Solar and Storage, and Residential Solar Loans. committed to inclusion and diversity, valuing the full range of life
experiences, skills and qualities of our employees. CarVal contin-
CarVal is also very focused on responsible investing and we ues to regularly review inclusion and diversity initiatives through-
have adopted policies based on the United Nations Principles out the organization.
for Responsible Investment, to which CarVal is a signatory. The
Responsible Investing Policy is consistent with CarVal’s fiduciary CarVal Investors Foundation
responsibility to maximize returns for our investors. The CarVal Investors Foundation was founded in 2017 and
The specific goals of this policy are: acknowledges its objective as a global corporate citizen and
strives to support organizations that help the most vulnerable of
1. Implement procedures that can be reasonably expected to the world’s people in the communities where we live and work.
identify those investments or transactions in which ESG factors The Foundation is dedicated to continue increasing charitable
may be material efforts and employee involvement across the globe.
2. Implement procedures to ensure that investment profession-
als are knowledgeable regarding Responsible Investing, pro- Sincere thanks for your support of CarVal Investors,
viding ongoing training where required Lucas Detor, James Ganley and Jody Gunderson
CarVal Investors Executive Team
TABLE OF CONTENTS
CarVal as a Global Corporate Citizen
Environmental Initiatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Social Initiatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
CarVal as a Business
Governance Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
CarVal as an Investor
Responsible Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CARVALINVESTORS.COM | 2
INITIATIVES
ENVIRONMENTAL
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ENVIRONMENTAL
ENVIRONMENTAL SUSTAINABILITY
OUR ACTIONS TOWARD HONORING THE PLANET
At CarVal, we are committed to environmental responsibility. To that end,
each of CarVal’s physical offices reflect and support a commitment to
CarVal’s environmental, social and governance (ESG) strategy. The scope GOALS:
of this work focuses on three areas:
1. Ensure consistent office ESG protocols across all
CarVal offices (where possible based on cultural
Office Protocols and/or geographic limitations)
Office activities that are managed by the CarVal administration team 2. Implement new or enhanced office ESG
and influence employee and guest behaviors protocols globally
Building Management 3. Measure and track office ESG activities
Physical building activities that were chosen by and/or can be 4. Develop and execute communications ensuring
influenced by CarVal per location awareness of office ESG activities
Vendors and Supplies 5. Ensure awareness for both internal employees
and visiting guests
Utilizing third-party vendors and supplies that align with ESG
objectives (e.g., eco-friendly, minority and women-owned businesses)
IMPACTS THAT MATTER: GLOBAL EFFORTS
Eliminating Separating Reducing
single-use recycling, trash, indoor waste
plastics and composting and water use
Using recycled paper and Moving from hard copy to
reducing paper printing digital publications
ADDITIONAL OFFICE INITIATIVES:
• Recycling toner containers • Switching to compostable or reusable dishes and cutlery
• Recycling coffee pods and grounds for employees and visitors
• Moving to refillable bathroom soap dispensers • Utilizing reusable coffee mugs
• Ordering highly used items in bulk to reduce deliveries • Donating retired computers/technology to local schools
CarVal Investors has offset all air travel for 2019 and 2020 by
827 TONNES of CO2 EMISSIONS
from being released into the atmosphere via the Gold Standard
CarVal believes it is important to invest in a safer climate and a more sustainable world and to offset our carbon footprint
Source: https://marketplace.goldstandard.org/products/climate-portfolio-variety-projects
CARVALINVESTORS.COM | 4
ENVIRONMENTAL
GLOBAL FOOTPRINT
CarVal is mindful of the office spaces our employees work in every day. Focused on environmental stewardship, we look to operate in best-in-
class spaces that complement our vision of greener and healthier communities. Highlights of ESG initiatives in place at each of CarVal’s offices
are below.
Minnesota New York London Singapore
• Silver LEED certification • Gold LEED certification • Covid-19 cleaning • Covid-19 cleaning
• Covid-19 cleaning • Covid-19 cleaning procedures implemented procedures implemented
procedures implemented procedures implemented • Motion sensors to turn on/ • Motion sensors to turn on/
• MERV 13 air filters • MERV 13 air filters off lighting off lighting
• Bi-ionization system in air • Motion sensors to turn on/ • Bicycle storage • MERV 13 air filters
ducts off lighting • Electric car charging stations • Bicycle storage
• Motion sensors to turn on/ • Water bottle refill stations • AED and first aid kit available • Electric car charging stations
off lighting • AED and first air kit available • Biodiversity roof • AED and first aid kit available
• Bicycle storage • Wellness room − Bird boxes and a bug hotel • Low-e glass on building
• Electric car charging stations • Inclusive restroom signage installed to encourage facade which reduces solar
• Water bottle refill stations wildlife heat gain
• SL Green (office landlord)
• AED and first aid kit available prioritizes ESG initiatives, • Located in a walkable, high • Highly efficient chillers and
receiving industry awards density neighborhood zoning to reduce energy
• Wellness room consumption
from S&P, Bloomberg, • Reduced water consumption
• Inclusive restroom signage Refinitiv, GRESB, Energy Star, by changing tap fittings • Extensive vertical greenery
• Biophilia MSCI to reduce urban heat gain
• Located in a walkable, high − Disclosure of • Photosensors for offices and
density neighborhood environmental sun lights in restaurants and
performance data gym
• Connected to Twin Cities
Regional Bikeways trail − Carbon reduction targets • Recovery of demolition
system materials for recycling
• Incorporation of sustainable
construction features
CARVALINVESTORS.COM | 5
SOCIAL
INITIATIVES
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CARVALINVESTORS.COM | 6
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SOCIAL
The CarVal Investors Foundation was founded in 2017 and acknowledges its objective as a global corporate citizen and strives to support
organizations that help the most vulnerable of the world’s people in the communities where we live and work. The Foundation was created to
formalize a long-standing commitment to charitable giving and is dedicated to continue increasing charitable efforts and employee involvement
across the globe. The Foundation has donated over $1 million to its community partners since it was founded.
MISSION
The CarVal Investors Foundation focuses its financial
support on non-profit organizations that primarily address
poverty relief, health and research, and education and
leadership. Priority is given to organizations that demon-
strate success in helping individuals and communities
overcome significant challenges and adversity.
PRIMARY STRATEGIC OBJECTIVES
2020 AREAS OF SUPPORT DIVISION
• Housing
Poverty • Nutrition
Relief 46% • Micro-finance
• Disaster recovery
CarVal employees across the globe volunteer their time on many
• Medical research community projects including Habitat for Humanity, Urban
• Treatment centers Ventures, Children’s Minnesota, Loring School, Loaves and Fishes
Health &
Research 28% • Support for patients & families
and Greenhouse Sports.
impacted by life-threatening
health issues
• Primary education In 2020, CarVal Investors donated more than
Education & • Skill-building
26% • Mentorship $20,000 IN UNUSED DELTA TRAVEL TICKETS
Leadership
• Business skill development to Habitat for Humanity
In 2020, the CarVal Investors Foundation was proud to partner with organizations in the communities we live and work to help provide
$115,000 in rapid funding to COVID-19 relief efforts across the globe. Several community partners include:
SOCIAL
GLOBAL CITIZENSHIP
Recognizing its role as a global corporate citizen, CarVal Investors strives to support organizations that help the most vulnerable of the
world’s people. CarVal focuses its financial support on non-profit organizations that primarily address poverty relief, health and research,
and education and leadership. Priority is given to organizations that demonstrate success in helping individuals and communities overcome
significant challenges and adversity.
The CarVal Investors Foundation supports organizations in the communities we live and work across the globe including:
100 Women in Finance First Book Muscular Dystrophy Association SOAR
Academy of Whole Learning Fraser My Breast Cancer Support Special Olympics
Accessible Space, Inc. Friends of the St. Paul Public Library NAIOP MN St. David’s Center
Access Sport Fund for Public Schools National Alliance on Mental Illness St. John Ambulance
Acorn Scout Headquarters GivePower National Breast Cancer Coalition St. Jude Children’s Research
Admission Possible Glam4Good National MS Society Hospital
Adopt A Classroom Global Empowerment Mission Northside Achievement Zone Straight Ahead
All Stars Project Great Ormond Street Hospital Northside Boxing The Akshaya Patra Foundation
Allegra’s Ambition Greater Minneapolis Crisis Nursery Opportunity International The Cute Syndrome
Alzheimer’s Association Greg Jennings Foundation Padraig’s Place Tourette Syndrome Association
American Cancer Society Greenhouse Sports Pancreatic Cancer Action Network Toys for Tots
American Red Cross Habitat for Humanity Partners HealthCare at Home TreeHouse
Angel Foundation Help for Children Pedal Power Twin Cities Habitat for Humanity
Arc Greater Twin Cities Homestart People Incorporated Twin Cities Rise
Autism Speaks Hope in Grace Perspectives UNICEF
Baby’s Space Hope Inc. Project 52 United Through Sport
Back on My Feet InnerCity Tennis Foundation Project Echelon United Way
Big Brothers Big Sisters Innocence Project Project for Pride in Living University of Minnesota Masonic
Bolder Options Jeremiah Program Reach Out and Read Children’s Hospital
Boys and Girls Clubs Junior Achievement Relentless Families UNCF
Bridging Just for Kids Foundation Reserve Aid UNIDOS
BuildON KIPP Minnesota RFK - Children’s Action Corps UPS for Down Syndrome
Camp Fire MN Lake Street Council Rock the Street, Wall Street Urban Homeworks
Cancer Research UK Lillehei Heart Institute Ronald McDonald House Charities Urban Ventures
Cardiac Risk in the Young Loaves & Fishes Rural Renewable Energy Alliance Veterans on Wall Street
Centrepoint Loring Community School Safe Horizon West Seventh Community Center
CG Women’s Empowerment Los Cabos Children’s Foundation Safe Passage for Children of Wheels for Wendell
Children’s Hospital Association Leukemia Research Minnesota Wilderness Inquiry
Children’s Theatre Company Macro Minds Foundation SATRO William’s Wings Foundation
Children’s Tumor Foundation Marie Curie Second Harvest Heartland Women for Women International
College Possible Mayo Clinic Research Seeing is Believing YWCA of Minneapolis
Crisis UK Memorial Sloan-Kettering Cancer Shanghai Charity Foundation Youth Frontiers
CycleHealth Center Sheridan Story
Disabled Sports USA Men Against The Trafficking Of SHINE
EMpower Others Side by Side
Epilepsy Foundation Minnesota Independence College Simpson Housing
and Community Singapore Children’s Society
Equal Justice Initiative
Minnesota Medical Foundation Skidmore Palamountain Scholarship
Fairview Foundation
MN Ovarian Cancer Alliance Foundation
Fareshare UK
Movember Foundation SkillForce
Feeding Britain
CARVALINVESTORS.COM | 8
SOCIAL
At CarVal Investors, we believe peak effectiveness comes from an engaged, talented and diverse workforce. Our approach to inclusion and
diversity takes numerous forms. Our CarVal ’25 Strategy demonstrates market leadership on inclusion and diversity because it incorporates
goals, ongoing action plans, and initiatives which strive to build and reinforce our objectives, ensuring we have the right skills, attitudes and
behaviors. CarVal is committed to inclusion and diversity, valuing the full range of life experiences, skills and qualities of our employees. CarVal
continues to regularly review inclusion and diversity initiatives throughout the organization.
INCLUSION AND DIVERSITY DEFINED
INCLUSION DIVERSITY
CarVal strives to hear, respect and recognize the individuality
Diversity is an expansive concept. It encompasses gender,
of every employee as we contribute to CarVal’s success. Our
ethnicity, race, sexual orientation, age, physical abilities,
efforts toward inclusion aim to leverage our diversity and
religious beliefs and numerous other characteristics that may
harness the broad variety of experiences and perspectives
or may not be readily apparent.
amongst us.
INCLUSION & DIVERSITY STRATEGIC OBJECTIVE
Increase CarVal’s long-term engagement of inclusion and diversity globally, cultivating a culture where employees feel empowered to share
different experiences, backgrounds, and ideas.
AREAS OF ACTION
STRATEGIC EDUCATION INTENTIONAL
PARTNERSHIPS & TRAINING FOUNDATIONS
Engage in long-term, diversity-focused Increase internal and external awareness Beyond fundamental compliance, ensure
partnerships creating substantial organizational of a broad spectrum of I&D-related topics, our organization has the appropriate and
involvement that is reflected both inside and encouraging candid conversations and active intentional infrastructure, policies, processes,
outside of CarVal, as well as building a future employee involvement and advocacy. procedures, and industry benchmarks to
talent pipeline. enable I&D strategy success.
Diversity Project
Established May 2015
- EDUCATION SERIES - I&D COMMITTEE
Girls Who Invest Established June 2019
(GWI)
National Association
of Black Accountants
(NABA)
Rock The Street,
Wall Street
27%
5
female
Launched
investment
professionals INCLUSION employee
AND
& DIVERSITY conversation
25% back office employees
ethnically
diverse
COMMITTEE ands h a re d
experience
HIRED SINCE ESTABLISHING launched in 2019 GROUPS IN 2020
THREE YEAR GOALS*
GLOBAL TALENT AND FOOTPRINT
As a global organization with a strong international footprint, and many different and dynamic backgrounds, having an inclusive environment is
part of the everyday interactions of our business. Below is a snapshot of a few elements ofETHNICITY
our diverse profile.
GENDER
GENDER BREAKDOWN
BREAKDOWN PROFESSIONAL BREAKDOWN ETHNICITY METRICS
PROFESSIONAL BREAKDOWN
Female Male Investment Professionals Operations/Functions
Nationalities: 28
White, 60% Languages: 35
34%
37%
181 5
* Degrees: 34
Majors: 74
employees Offices
66% 63% 2020
4%
Turnover
Unidentified, 24%
Asian, 4%
Black or African American, 3%
As of January 2021 Hispanic or Latino, 3%
*Denotes advertised office locations. Individuals may be employed and/or located in additional locations globally. White- Northern Irish, 1%
White - British, 2%
White - Other, 1%
Two or More Races, 2%
Asian/Asian British - Chinese, 1%
White - Scottish, 1%
Asian/Asian British - Indian, 2%
CARVAL THREE-YEAR GOALS
*
These goals were created to specifically target progress within the areas where gender and ethnic representation is the weakest within the firm.
1 2 3
CarVal will be at or better Hire 25% females in Hire 25% ethnically
than the market on gender open investment diverse individuals in open
and ethnic diversity metrics professional roles operations/function roles
CARVALINVESTORS.COM | 10PROGRAM
GOVERNANCE
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CARVALINVESTORS.COM | 11
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n y od o hGOVERNANCE
CARVAL INVESTORS COMMITTEE STRUCTURE
CarVal has a robust committee oversight structure to help aid in the overall governance of CarVal.
EXECUTIVE COMMITTEE
Audit and Compliance Committee HR and Compensation Committee
Portfolio Investment Committee Valuation Committee
Conflicts Committee Technology Steering Committee
Counterparty Credit Risk Committee Retirement Committee
Responsible Investing Committee Inclusion and Diversity Committee
Responsible Investing Policy
POLICY OBJECTIVES
The aim of CarVal’s Responsible
Investing Policy is to establish
a framework for the inclusion
of environmental, social and
governance factors into invest-
ment decision-making, and to
describe the means by which
this policy will be reviewed and
by which the outcomes will be
reported.
CARVAL’S GUIDING PRINCIPLES
CarVal Investors expects its employees to follow its key guiding principles. The Guiding Principles, set out below, do not impinge on
our Responsible Investing Policy but may provide additional context for those wishing to understand the ethical framework in which
CarVal operates:
1. We will comply with the laws of all countries to which CarVal is subject.
2. We will not knowingly assist any third party to violate any law of any country, by creating false documents or any other means.
3. We will not pay or receive bribes or participate in any other unethical, fraudulent or corrupt practice.
4. We will always honor all business obligations that CarVal undertakes with absolute integrity.
5. We will keep CarVal’s business records in a manner that accurately reflects the true nature of CarVal’s business practice.
6. Managers and supervisors will be responsible to ensure that employees under their supervision are familiar with applicable
laws and company policies and comply with them. Further, they will be responsible for preventing, detecting and reporting any
violations of law or CarVal policies.
7. Employees will not become involved in situations that create a conflict of interest
between CarVal and the employee. ®
CARVALINVESTORS.COM | 12GOVERNANCE
RESPONSIBLE INVESTING COMMITTEE
CarVal formed a Responsible Investing Committee in 2017 reporting to the executive team, in conjunction with establishing our Responsible
Investing Policy. The Responsible Investing Committee’s primary responsibilities are to monitor the effectiveness and implementation of the
Responsible Investing Policy and to make recommendations for amendments to the policy, should these be required.
COMMITTEE CO-CHAIRS
Lucas Detor Chris Hedberg
Managing Principal Chief Financial Officer
INVESTMENT PROFESSIONALS
Greg Belonogoff M’hamed Chahir Jess Dvorak Neil Hepworth
Principal, Managing Director, Managing Director, Managing Director,
Shipping/Workout Corporate Securities Loan Portfolios Loan Portfolios
Jonathan Hunt Jeff Lee, Carlo Portes Sandeep Saboo
Managing Director, Director, Director, Director,
Clean Energy CLO Corporate Securities Emerging Markets
Esteban Torres Xiaoyu Gu Robert Simmer Emily Wilson
Director, Vice President, Vice President, Vice President,
Emerging Markets Clean Energy Loan Portfolios Hard Assets
OPERATION AND FUNCTION PROFESSIONALS
Gareth Edwards Ann Folkman Christie Oberg
Kevin Bloss
Managing Director, Managing Director, Managing Director,
Associate General Counsel
Capital Formation Marketing & Communications Deputy CCO
Matthew Remfert Heather Schnell Kyle Schafer Kim Ferrell
Managing Director, Director, Senior Associate Vice President,
Risk Investor Relations Data Technology Senior Paralegal
COMMITMENT TO ACTION, COMMITMENT TO CHANGE
CarVal has a strong corporate culture that has been developed, nurtured and refined over the Firm’s 34-year history. The culture is centered
on collaboration and discipline, also placing great emphasis on certain values that we believe are critical to achieving the highest levels of
engagement and strong performance. Milestones of our ESG efforts are highlighted below – though we are steadfast in our commitment to
expanding and improving our ESG strategy in the years to come.
JUN 2019 FEB 2021
JUN 2017 ESG training program for Became UNPRI signatory
Formed Responsible investment professionals
OCT 2018
Investing Committee
MAY 2015 Launched the first MN Launched summer internship DEC 2020
Formed CarVal Issued Responsible chapter of Rock the program with Girls Who Invest Established internal
Women’s Forum Investing Policy Street Wall Street Formed I&D Committee ESG training program
2015 2017 2019 2021
2016 2018 2020
APR 2017 MAY 2019 APR 2020
Formed partnership Became SASB Formed partnership with
with NABA member The Diversity Project
SEP 2017 DEC 2019
Formed CarVal Launched CVI Clean Energy Fund
Investors Foundation Issued first ESG report to our investors
CARVALINVESTORS.COM | 13INVESTMENTS
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CARVALINVESTORS.COM | 14
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P
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RESPONSIBLE INVESTING
CarVal Investors believes that environmental, social and governance (ESG) factors have the potential to influence investment outcomes and
has committed to incorporate them into the firm’s investment decision making. CarVal is also committed to adhering to the United Nations
Principles for Responsible Investment where they are consistent with CarVal’s broader fiduciary responsibilities.
CARVAL INVESTORS RESPONSIBLE INVESTING POLICY
CarVal implemented a Responsible Investing Policy in mid-2017 that This Policy applies to all investments made within commingled and
draws on the United Nations Principles for Responsible Investment, single-investor funds where the investment guidelines of such funds
an organization to which CarVal is now a signatory. The Responsible specifically identify that a policy of Responsible Investing should
Investing Policy is consistent with CarVal’s fiduciary responsibility to be pursued. In general, commingled funds will make limited use of
maximize returns for its investors. The specific goals of this policy are: thematic exclusions but such policies may be tailored to investor’s
requirements in the case of single-investor funds.
1. Implement procedures that can be reasonably expected
to identify those investments or transactions in which ESG
factors may be material
2. Implement procedures to ensure that investment
professionals are knowledgeable regarding Responsible
Investing, providing ongoing training where required
3. Ensure that appropriate personnel have the necessary tools
to incorporate ESG factors into investment decision making,
where such factors are relevant
4. Provide a governance framework (i.e., the establishment of
a Responsible Investing Committee) within which CarVal may
monitor and review the effectiveness and operation of its
Responsible Investing Policy
5. Implement procedures for the monitoring and reporting of
responsible investment practices at an investment, fund and
firm level
Scope of Policy
CARVALINVESTORS.COM | 15INVESTMENT
CARVAL’S RESPONSIBLE INVESTING POLICY IN BRIEF: to achieve a deeper understanding of relevant exposures and to
promote ESG reporting.
EXCLUSION SCREENING
As a debt investor, CarVal tends to have few opportunities to
CarVal does not typically apply investment exclusion screens based participate in proxy voting but to the extent that such opportunities
on ESG criteria to its commingled funds as a whole, although do arise, CarVal will use its voting rights in respect of matters of
investors in separately managed accounts or single investor funds corporate responsibility and governance.
may direct that agreed exclusion policies should be implemented in
respect of their capital. RESPONSIBILITY OF INVESTMENT TEAMS
As well as following any local laws or regulations that may apply, Each member of an investment team who participates in the
CarVal does not invest in companies involved in the production of evaluation and/or approval of potential investments for the
cluster munitions or anti-personnel mines. This policy is consistent funds will participate in mandatory training to support effective
with the United Nations Convention on Cluster Munitions. implementation of the policy at the investment level, when and as
determined by the Responsible Investing Committee. Each of these
ENGAGEMENT individuals will be required to attest that he or she has read the
CarVal, through the funds it manages, typically owns debt rather policy and understands his or her role and obligations with respect
than equity and as such is a contractual counterparty to, rather to the policy.
than an owner of, a business. Such a situation will generally place
constraints on the ability to influence company management but as TRANSPARENCY
CarVal believes non-financial factors (i.e., ESG factors) may have a CarVal will report annually to relevant stakeholders on the
material impact on a borrower’s long-term financial performance, implementation of its Responsible Investing Policy. A component
it remains committed to exercising influence and promoting its ESG of this commitment to transparency is the obligation to produce
values where possible. an annual update that will be made available to investors. As a
Where it determines it appropriate, CarVal will engage directly with signatory to the UNPRI, CarVal has committed to reporting under
companies to encourage best practice in respect of ESG factors, the UNPRI framework.
CARVAL INVESTORS’ ESG PARTNERSHIPS
Member since 2019
CarVal Investors is proud to be a member
of the SASB Alliance whose goal is to
develop and explore best practices to
integrate material sustainability infor-
Signatory since 2021 mation into existing processes. CarVal
shares SASB’s belief that today’s capital
The PRI, a UN-supported network of investors, works to markets need standardized sustainability
promote sustainable investment through the incorporation of disclosure and effective ESG integration
environmental, social and governance factors into investment into investment practices.
decision-making. CarVal Investors has recently become a
signatory of this distinguished network.
CARVALINVESTORS.COM | 16INVESTMENT
CLEAN ENERGY INVESTMENT ACTIVITY
CARVAL HAS INVESTED OVER $2 BILLION IN CLEAN ENERGY
Clean Energy Investments by Asset Type
CLEAN ENERGY IMPACT OPPORTUNITIES As of March 31, 2021 (estimate)
Clean energy is a fast-growing source of new energy, yet the Residential
Solar Loans
market is nascent and fragmented, making it an attractive
investment opportunity. CarVal has an extensive team focused on
five strategies within clean energy investments today that draw Solar Asset-Backed
upon CarVal’s 34 years of experience investing in loan portfolios, Secured Securities (ABS)
Debt
corporate securities, structured credit and commercial real estate.
These primary strategies include: Secured Debt, Solar Asset-Backed C-Pace/Efficiency
Securities, C-PACE/Efficiency, Commercial and Industrial Solar and
Storage, and Residential Solar Loans. Commercial & Industrial
(C&I) Solar Storage
Renewable Energy and Sustainability Projects
Secured Debt Solar ABS C-PACE / Efficiency C&I Solar & Storage Residential Solar Loans
Asset–backed securities Financing energy efficiency
Project finance bonds or Acquisition of mid-scale Newly originated loans to
where underlying assets improvements, including
loans secured on solar facilities with long homeowners installing
are residential solar loans Commercial Property
renewables assets term contractual cashflows residential solar
or other renewables Assessed Clean Energy loans
CARVAL INVESTORS CLEAN ENERGY INVESTMENT MAP
As of February 28, 2021
CARVALINVESTORS.COM | 17CARVAL INVESTORS
CLEAN ENERGY FUND
®
CARBON OFFSET EQUIVALENTS
In 2021, CarVal closed on its first fund dedicated to clean energy investing. This fund raised $490 million in commitments that will be invested alongside
capital from CarVal’s multi-strategy funds. The fund invests in assets that generate clean energy, as well as in assets that save and store energy, which
reduces the demand for carbon-generated power. Totaling the kilowatt hours of energy that CarVal estimates are generated or saved by these investments
over the course of a year, below are various alternative metrics that show the carbon offset benefits of the fund’s investments, as estimated by the EPA’s
Greenhouse Gas Equivalencies Calculator, located at epa.gov. The output below includes only those investments in the dedicated clean energy fund that
both (a) involve active production or storage of energy and (b) represent assets directly owned or financed by CarVal funds.
Carbon Offset*
(based on holdings as of December 31, 2020)
Carbon Dioxide Equivalent = 97,024 metric tons
CO2 Emissions from: Carbon Sequestered by:
Homes’ Electricity Acres of U.S.
Use for One Year Forest in One Year
17,624 118,871
Greenhouse Gas Emission from: Greenhouse Gas Emissions avoided by:
Passenger Vehicles Trash bags of Waste
Driven for One Year Recycled instead
of Landfilled
21,101 4,128,307
*
The Carbon Offset is an estimated figure based solely on approximate energy generated/saved annually by investments held in the dedicated clean energy fund
Carbon Included in Offset Investment kWh included
Description Investment Type
Offset Tiers Calculation Amount in Offset
Tier 1 YES CarVal-owned or solely financed clean energy assets. Only $68,675,403 65,091,494 C&I Projects, C-PACE and
the dedicated clean energy fund’s pro rata share of assets is residential whole loans
included in offset.
Tier 2 YES CarVal funds own a portion of the assets or have provided a $22,963,024 71,815,609 Efficiency, private loans and
portion of private debt financing. Only the dedicated clean originated ABS equity
energy fund’s pro rata share of assets is included in offset.
Tier 3 NO Publicly traded securities (including interest rate hedges), $45,124,127 0 Bonds, purchased ABS,
development investments in renewable projects, and renewable equipment, and
renewable equipment financings made by the dedicated clean development loans
energy fund.
CarVal’s dedicated clean energy fund carbon offset report is informed by broad reporting principles from the following organiza- $136,762,554 136,907,103
tions: Task Force on Climate-related Financial Disclosures (TCFD), Climate Disclosure Standards Board (CDSB), and United Nations
Principles for Responsible Investment (UNPRI)
The Carbon Offset is calculated by inputting CarVal estimates into the EPA’s Greenhouse Gas Equivalencies Calculator (epa.gov calculator). This figure is based on renewable energy
generated in connection with the Fund’s holdings as of December 31, 2020. The calculation includes only those investments in the Fund for which CarVal believes it has a
reasonable basis for attributing an approximate measure of energy produced or saved per year. It reflects only the Fund’s pro rata share of kWh produced by
the respective investments. The calculation does not incorporate carbon emissions generated by the management company or other operations.
Certain data have been provided by third-party sources and have not been independently verified and cannot be guaranteed. Different
methodologies or assumptions will product different results.
CARVALINVESTORS.COM | S 18
C A R VA L I N V E S T O R .CO MDISCLAIMER
The information in this document is intended for informational purposes only and reflects the views of CarVal Investors, LP (“CarVal”) as of the date herein.
All time-sensitive analysis and representations in this document are made as of March 31, 2021, unless stated otherwise.
CarVal makes no representation that the information herein is accurate, updated or complete. CarVal does not undertake to advise you of changes to the views
expressed here, changes to circumstances that may affect these views, or the occurrence of future events.
This document does not constitute an investment recommendation, investment advice, or an offer to sell or a solicitation of an offer to buy any securities. Moreover,
investment concepts described in this paper may be unsuitable for investors in light of their specific investment objectives and financial situation. You may not rely on
these materials as the basis upon which to make an investment decision. To the extent that you rely on these materials in connection with any investment decision, you
do so at your own risk.
CARVALINVESTORS.COM | S 19
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