At BSP¹, responsible investment is central to how we manage risk, seek opportunity, and deliver sustainable, long-term value for our clients. As a credit-focused investment manager lending to sub-investment grade companies across US and European markets, we recognise that environmental, social, and governance (“ESG”) factors are material considerations in assessing the financial resilience and long-term performance of our investment portfolios.

We are signatories & supporters of:

1. The UN Principles for Responsible Investment (“PRI”) since 2018, achieving best-in-class scores
2. The Task Force on Climate-related Financial Disclosures (“TCFD”) since 2020, publishing our inaugural TCFD report in 2024
3. FRC UK Stewardship Code since 2022, highlighting our engagement ambition & activities

These affiliations and accreditations reflect our long-standing commitment to responsible investing and help inform our practices, disclosures, and industry collaboration.

Our responsible investment framework is built on four core pillars:

1. A firm-wide exclusions policy based on product and conduct criteria
2. In-depth ESG risk assessment and monitoring of investments
3. Active stewardship and engagement with borrowers and CLO managers
4. Collaboration with peers, regulators, and industry bodies to raise market standards

We are committed to integrating ESG risk analysis across our investment strategies – including liquid credit, special situations, direct lending, infrastructure and structured credit. We believe that responsible investment practices contribute to better credit outcomes, stronger borrower relationships, and improved market integrity. Our analysts assess ESG risks at issuer level, identify material exposures, and escalate high-risk cases to Investment Committees.

Beyond risk analysis, engagement and stewardship are central to our investment approach. We engage regularly with issuers, management teams, and sponsors on ESG performance, transparency, and transition planning, and track outcomes through an ESG engagement log.

Climate risk remains a strategic priority for BSP. In 2024, we published our first TCFD climate report with in-depth climate scenario analysis of all our investments. We have an enhanced climate risk tool to evaluate borrower exposure to physical and transition risks, emissions intensity, net zero alignment, and sector-level climate vulnerability. Our Carbon Action Plan targets portfolio net zero by 2050, with a 50% interim reduction target by 2030 across select strategies.

We are also increasing our focus on impact and outcomes-based investing, with our proprietary impact frameworks. These frameworks assess alignment with the UN Sustainable Development Goals (SDGs), track issuer-level impact KPIs, and help drive measurable real-world outcomes in parallel with attractive financial returns.

BSP maintains a dedicated Responsible Investment team that works closely with investment professionals across the firm to embed ESG considerations into the investment lifecycle. Our ESG integration process is supported by proprietary tools, including a sector materiality guide, ESG and climate checklists, and a bespoke ESG scoring system. Through our integration of ESG risk, active stewardship, data-led frameworks, and transparent reporting, BSP is committed to building a more sustainable and resilient future for our investors and the markets in which we operate.

¹BSP refers to BSP Ltd