Introduction

DSC Meridian Capital LP (“DSC Meridian” or “Firm”) is an event-driven corporate credit investment firm focused on generating superior risk-adjusted returns across the credit cycle. Since early 2021, we have integrated material sustainability factors into our investment process at the analyst level from screening to exit. We constructively engage with management teams where we believe we can add value. Our objective is to generate attractive returns, and we believe that helping companies with their sustainability issues, strategy, and disclosure can be additive to their enterprise value and potentially lower their cost of capital over time. Certain funds and products we manage, such as our Climate Action Fund, may have specific sustainability-related goals as part of their investment mandate.

Approach

DSC Meridian’s Director of ESG Research and Engagement works closely with the CIO, COO, and the investment team to ensure that all investment professionals are trained to assess risks associated with material Environmental, Social and Governance issues. Our sustainable investment practices and policies are fully aligned with the Principles for Responsible Investment (PRI), to which we became a signatory in April 2021. In April 2023, our Climate Action Fund was registered in Europe under Article 8 of the Sustainable Finance Disclosure Regulation (SFDR).

The practice of responsible investing is fully integrated throughout the investment process across the entire portfolio.  We view this practice as a strategic lens in sourcing, underwriting, and engaging with companies.  Our approach gives us unique insight into management and board quality, corporate culture, long-term strategy execution, value creation, and risk management. However, sustainability factors are just one of many inputs we use into our investment decision making process. We draw on internal and external expertise and data throughout the investment lifecycle. We have developed a proprietary integration framework to support our investment decision-making and engagement efforts. In part, we assess companies based on material business alignment with the UN Sustainability Goals (SDGs). Our Climate Action Fund is focused on advancing the objectives of SDG #13, Climate Action.

When engaging with portfolio companies, we seek to identify a handful of sustainability risks and opportunities that can most impact the cost of capital and valuation, and then work with management teams to improve.  We are active investors who provide hands-on technical assistance to management teams to set targets, improve disclosure and integrate sustainability into operations. Where we own equity in a publicly traded company, we vote proxies in line with our Proxy Voting Policy and our Governance and Engagement Principles. We engage constructively with management as appropriate and encourage issuers to disclose non-financial performance and to view material sustainability risks as an opportunity to enhance operational effectiveness and generate value over the long term.

We are committed to transparent communication with our investors and report our progress quarterly.  We also issue an annual Impact Report. We actively participate in several responsible investing, multistakeholder organizations including Ceres, UN Principles of Responsible Investing (UNPRI) the IFRS Sustainability Alliance (formerly the SASB Alliance), CDP, the Net Zero Asset Managers Initiative, the Council of Institutional Investors, and the Aspen Institute. We also publish and contribute thought leadership within the space.

Sustainability at the Management Company

DSC Meridian seeks to incorporate sustainability practices into our operations. Our goal is to operate the firm to the highest ethical standards while utilizing robust risk management practices. We have robust systems and safeguards to protect client and employee data. Our Information and Cybersecurity Policy clearly articulates the role our employees must play in mitigating the risk of cyber-attack. The firm conducts mandatory annual training for all employees. Business ethics are also of paramount importance to our firm. We conduct mandatory annual compliance training for all employees.

The firm is committed to fostering an inclusive culture and values diversity in all its forms. We believe a diverse and inclusive workforce strengthens the firm and our investment process. Diversity, Equity, Inclusion, and Belonging are important components of our talent recruitment and management processes. Our Diversity, Equity, Inclusion, and Belonging Policy, and Policy Against Discrimination, Harassment & Workplace Behavior underpin this commitment.

As a firm, we seek to minimize our carbon footprint through our personal and business practices. Our office is in a LEED Gold-certified building in Manhattan, and most of our team commutes on foot or via public transportation. We leverage virtual technologies where possible to minimize business travel. We avoid single-use plastics and participate in our building’s recycling and composting programs. We purchase high-quality carbon credits to offset our annual firm footprint.

For copies of our sustainability-related policies, please email info@dscmeridian.com. This policy is reviewed annually and updated as necessary.

June 2023