EU Sustainable Finance Disclosure Regulation

Information required under the EU Sustainable Finance Disclosure Regulation (the “SFDR”)

Integration of sustainability risks

KKR Alternative Investment Management Unlimited Company’s and KKR Credit Advisors (Ireland) Unlimited Company’s policy on the integration of sustainability risks in its investment decision making process can be found at kkresg.com (including KKR’s Responsible Investment Policy).

No consideration of sustainability adverse impacts

KKR Alternative Investment Management Unlimited Company (“KKR AIFM”) and KKR Credit Advisors (Ireland) Unlimited Company (“KKR CAI”) are required to publish information on whether they consider the “adverse impacts of investment decisions on sustainability factors” (the “Principal Adverse Impacts”) under the SFDR. KKR AIFM and KKR CAI do not currently consider the Principal Adverse Impacts of investment decisions on sustainability factors in connection with all their products and services, as defined under and in accordance with the SFDR. This is because KKR AIFM and KKR CAI are not, in their view, currently in a position to obtain and/or measure all the data which they would be required by the SFDR to report, or to do so systematically, consistently and at a reasonable cost with respect to all their investment strategies to clients and investors. Underlying investments are not widely required to, and may not currently, report by reference to the same data, which creates a challenge. KKR AIFM and KKR CAI will keep this decision under review as market practice and data availability continue to evolve and may consider Principle Adverse Impacts of investment decisions on sustainability factors at the firm level.

Date of publication: 23 September 2024.

Information on how remuneration policies are consistent with the integration of sustainability risks

KKR AIFM’s and KKR CAI’s remuneration practices are designed to promote sound and effective risk management and not to encourage risk-taking which is inconsistent with their risk appetites or the risk profiles of the portfolios which they manage. KKR’s Responsible Investment Policy sets out how its investment process incorporates consideration of ESG risks. Such risks form part of KKR AIFM’s and KKR CAI’s assessment of risk for the purposes of its remuneration policy. KKR AIFM’s and KKR CAI’s approach to remuneration enables variable remuneration for employees to be adjusted for performance. This adjustment is not based solely on financial metrics. Qualitative non-financial performance metrics form a significant part of the assessment process. These metrics may include, for example, an employee’s failure to adhere to effective risk-management, to comply with applicable regulatory rules, unethical behaviour or other behaviour that is contrary to KKR’s Culture and Values. Consideration of these factors (including where relevant an individual’s contribution to ESG-related efforts) may form part of the employee’s performance assessment process. In addition, a proportion of the variable remuneration for employees may be deferred. This allows ex-post performance adjustments to be applied to deferred remuneration where risks, including sustainability risks, materialise in the future.