Overview

New Mountain Capital is committed to “building great businesses” and responsibly investing in companies that contribute positively to society and simultaneously generate strong financial risk adjusted returns. This strategy of business building leads to job creation and a strong commitment to improving the quality of each portfolio company. It’s our view that the integration of ESG factors helps minimize risks, improve operational efficiencies and enhance financial returns. We partner with management teams to identify and capitalize on value creation opportunities with the aim of building stronger, more sustainable companies over the long-term.

NMC has ESG programs across all strategies including Private Equity, Credit, Net Lease and Strategic Equity – each to a varying degree depending on strategy in accordance with NMC’s ESG Policy and subject to NMC’s fiduciary duties and applicable contractual and legal obligations.

01

Social Responsibility History

Since inception, NMC has emphasized social responsibility, through business building and improving the quality of our portfolio companies which themselves provide valuable and positive products and services to society. Over the years, NMC has formalized its commitment to ESG and Social Responsibility. The following timeline shows the continuous improvements to NMC’s ESG program.

2000

Firm founded with the “Building Great Businesses” mission statement and the idea of creating sustainable businesses for the long-term

2008

First Social Dashboard Published

2009

Annual Social Dashboard released

2014

Annual Social Dashboard released

2015

NMC’s first ESG report releases which included the Social Dashboard

2016

Created Diversity Committee

2017

Created ESG Committee

2018

Became a UNPRI Signatory

2019

  • Conducted first Annual ESG Survey among our portfolio companies
  • Onboarding of RepRisk
  • Expanded ESG framework to Credit strategy

2020

Hired ESG Consultant who later became full-time dedicated ESG resource

2021

  • Licensed Apex
  • Licensed SASB
  • Expanded ESG framework to Net Lease strategy

2022

  • Carbon Footprint Initiative
  • Board Diversity Initiative
  • 2000
  • 2008
  • 2009
  • 2014
  • 2015
  • 2016
  • 2017
  • 2018
  • 2019
  • 2020
  • 2021
  • 2022

Private Equity Framework:
A Focus from Acquisition to Exit

ESG Review

Due Diligence

  • Screen all prospective companies for material risks through RepRisk.
  • Analyze company on NMC’s 24 Key ESG Metrics
  • Leveraging 3rd party due diligence consulting reports that include ESG topics

ESG Plan

Post Investment

  • Collect ESG metrics through NMC’s Annual ESG Survey
  • Collect carbon footprint data on newer portfolio companies since 2022
  • Incorporate Industry Frameworks Analysis (SASB) on newer portfolio companies since 2020

Ongoing ESG
Monitoring

Life of Investment

  • Conduct annual KPI data collection
  • Annual ESG Report sent to investors

Continuous Improvement & Evolution of Processes

02

03

NMC’s Private Equity Sustainability Metrics


Universal KPIs

NMC’s Annual ESG Survey assesses all portfolio companies across standard ESG metrics.


Customized KPIs

NMC licenses SASB which provides industry specific metrics; used since 2020 for newer portfolio companies to assess and determine relevant custom KPIs.


24 Key ESG Metrics

Deal teams assess all prospective investments on NMC’s 24 Key ESG Metrics during due diligence.

Environmental

01

Air & Water Pollution

02

Deforestation

03

Energy Efficiency

04

Hazardous Materials

05

Land Degradation

06

Resource Depletion

07

Waste Management

08

Water Scarcity

Environmental

01

Air & Water Pollution

02

Deforestation

03

Energy Efficiency

04

Hazardous Materials

05

Land Degradation

06

Resource Depletion

07

Waste Management

08

Water Scarcity

Social

01

Job Creation

02

Customer Satisfaction

03

Data Protection & Privacy

04

Diversity & Equal Opportunities

05

Employee Attraction & Retention

06

Labor Standards

07

Product Safety & Liability

08

Supply Chain Management

Social

01

Job Creation

02

Customer Satisfaction

03

Data Protection & Privacy

04

Diversity & Equal Opportunities

05

Employee Attraction & Retention

06

Labor Standards

07

Product Safety & Liability

08

Supply Chain Management

Governance

01

Accounting Standards

02

Anti-Competitive Behavior

03

Board Composition

04

Bribery & Corruption

05

Business Ethics

06

Compliance

07

Executive Remuneration

08

Risk Management

Governance

01

Accounting Standards

02

Anti-Competitive Behavior

03

Board Composition

04

Bribery & Corruption

05

Business Ethics

06

Compliance

07

Executive Remuneration

08

Risk Management

Job Creation & New Mountain’s “Social Dashboard”

Since 2008, New Mountain Capital has proactively published an annual Social Dashboard, which reports on key metrics within our private equity portfolio companies, including net job creation, total investment in R&D, capital expenditures, and employee salaries in comparison to U.S. median income.

Private Equity Portfolio Companies Under NMC’s Ownership as of 2022:

~72,100

Jobs added or created, net of any job losses1:

Median Income ~76%

above national individual median income2

$8.3B+

of R&D, software development, and capital expenditures

$87B+

enterprise value gains3

Never a bankruptcy or missed interest payment

Please see the Disclosures for source data.

04

05

Partnerships

SASB Standards

SASB Standards guide the disclosure of financially material sustainability information by companies to their investors. Available for 77 industries, the Standards identify the subset of environmental, social, and governance issues most relevant to financial performance in each industry. The SASB Standards became a resource of the IFRS Foundation as of August 1, 2022 upon the consolidation of the Value Reporting Foundation (which housed the SASB Standards and the Integrated Reporting Framework) into the IFRS Foundation.

United Nations Principles of Responsible Investing

The PRI is the world’s leading proponent of responsible investment. It works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole.

RepRisk

RepRisk is a pioneer in ESG data science that leverages the combination of AI and machine learning with human intelligence to systematically analyze public information and identify material ESG risks. RepRisk’s mission is to provide transparency on business conduct risks to help drive accountability and responsible behavior of companies, thus creating positive change.

American Investment Council

The American Investment Council (AIC) is an advocacy and resource organization established to develop and provide information about the private investment industry and its contributions to the long-term growth of the U.S. economy and retirement security of American workers. Member firms of the AIC consist of the country’s leading private equity and growth capital firms united by their successful partnerships with limited partners and American businesses.

Apex

Our Apex’s ESG Ratings and Advisory service helps investors unlock real value and drive transformational change by offering a high quality, global, independent, end-to-end service for the private markets. By deploying intelligent ESG data and insights we Apex aims to drive capital towards ESG performance while influencing significant behavioral change.

Diversity

“New Mountain is built on the concept of respect: respect for our people, our companies, our investors, our communities – based on human creativity and merit.”

Steven Klinsky, Founder & CEO

“Since we created the Diversity Committee in 2016, we’ve established several internal initiatives and partnered with numerous organizations to help open up the funnel and see a wider, more diverse group of candidates in our recruiting efforts. We are continually striving to create a culture that enables all our employees to succeed – ensuring that programs are in place to support our people in all phases of their professional development. We believe in an inclusive culture that allows for all employees to participate and voice their opinions at all phases of their career and where they can bring their true, authentic self to work.”

Adam Weinstein, COO / CFO

06

Diversity Initiatives

Diversity Committee

Small group focused on unifying firm goals and commitment to diversity initiatives at NMC and portfolio companies

Network Build Out

Actively curating / tracking network of diverse сandidates, including boards and Executive Advisory Council members

Community Involvement

Partnering with
organizations focused on
diversity in financial services

Data Collection

Building out processes to
track diversity at NMC and
portfolio companies

Internal Policies

Develop / improve diversity & inclusion policies at NMC and portfolio companies

Organizational Partnerships

The ILPA Diversity in Action initiative brings together limited partners and general partners who share a commitment to advancing diversity, equity and inclusion in the private equity industry. The goal of the initiative is to motivate market participants to engage in the journey towards becoming more diverse and inclusive and to build momentum around the adoption of specific actions that advance DEI over time.

SEO Career: our premier program for recruiting, coaching, and training high-achieving undergraduates for summer internships that lead to coveted, full-time jobs at 190+ partner companies nationwide. We provide access to internships, training, and coaching, for students in industries across Wall Street and Corporate America, which historically has resulted in 80% full-time offer rates. SEO Career trains 2,000+ college students each year, with ~800 securing internships.

INROADS has been a leader in advancing diverse youth in corporate America. We offer talented, underrepresented youth a pathway from high school to college and throughout their career that breaks through the glass ceiling and closes the opportunity and wealth gaps. INROADS career development pathway extends a support system that can last a lifetime.

Please see the Disclosures for more information.