ESG Policy

Malk Partners (“The Company”, “we”) forges ESG best practices and leading-edge ESG programs for alternative asset managers by serving as their trusted, commercially oriented advisor to raise the bar on ESG and impact and chart positive change in our shared global community. Since incorporating as a Public Benefit Corporation (PBC) in 2021, Malk’s stated purpose is to steer the flow of capital to responsible investors and investments. We seek to live out this mission while prioritizing our six values of Inclusive, Mission Driven, Passionate, Authentic, Collaborative, and Trailblazing (IMPACT).

As an ESG advisor for private market clients, Malk must also be mindful of our own ESG practices and internal operations. Since becoming a signatory to the UN Principles for Responsible Investment in 2021, we have aligned our ESG practices to the six core principles. We make sure to accomplish our mission with our internal ESG management and our vetting, onboarding, and engagement of clients.

Internal ESG Management

Ethics and Compliance Matters: Given our involvement in the investment ecosystem, it is crucial we have controls in place to prevent incidents of noncompliance or conflicts of interest. Our Ethics and Compliance program includes a detailed Conflict of Interest Policy, Insider Trading Policy, and Code of Conduct. Malk tracks employee investments to prevent conflicts of interest and outlines reporting procedures for any real or suspected incidents of unethical conduct.

Data Privacy and Security: We handle sensitive information from clients and portfolio companies and must act as good custodians of this data. We continue to enhance our program as we scale and have annual data privacy and security training to align employees on company expectations for safeguarding data. We leverage two factor authentication to prevent unauthorized access to sensitive data, and we conduct ad hoc phishing tests to ensure employees understand how to avoid social engineering.

Diversity, Equity, and Inclusion: Malk values our differences and wants to ensure all individuals have equal opportunities and feel a sense of belonging within our organization. We codify our commitments to equal employment opportunity and preventing discrimination and harassment through employee handbook policies, and anti-bias and inclusivity topics are consistently integrated into workforce and manager trainings. Malk strives to diversify our candidate pipeline through a diverse internship program and targets high diversity index universities to reach candidates from diverse backgrounds during campus recruitment. All job descriptions are reviewed for inclusive language before being posted. Employee resource groups are in place for BIPOC, LGBTQ+, and female-identifying employees. Malk also promotion DEI through equitable promotion and compensation practices.

Social and Labor Conditions: Malk understands the important of an engaged workforce and a strong culture to prevent employee attrition and drive innovation. Malk offers employees flexibility with a hybrid office schedule, remote flexibility, and different time-off categories to meet employee needs. We monitor employee engagement through weekly pulse surveys and biannual engagement surveys and share results and action plans for improvement with the workforce. Managers support their team members during weekly one-on-one meetings, regular project feedback, and bi-annual performance reviews.

Climate Change: As a hybrid-remote professional services company, Malk has relatively low emissions, but we work to implement best practices in reducing our carbon footprint to align with the recommendations we create for other businesses. We track our GHG emissions annually and have historically worked with well-vetted third parties to offset these emissions.

Positive Impact: Malk is intentional in our positive impact objective to steer the flow of capital to responsible investors by ensuring we vet our clients for alignment with our values, engage our clients on a consistent basis, and push for best practice with GPs and portfolio companies. Malk conducts stewardship reviews on all potential clients before onboarding to vet for any ethical misalignment and monitors our clients quarterly through ESG Management Scores.

Stewardship: Malk is aware of the potential adverse impacts that could come with our work, such as greenwashing. Malk vets each of our clients in depth to ensure clients align with our values and that their actions follow their policies, mission, and publicized statements. Account leads monitor their clients and are responsible for preventing greenwashing.

Client Management

Malk reviews all potential and existing clients to prevent greenwashing or association with unethical companies.

Vetting and Onboarding

Malk maintains a Stewardship Committee that researches potential clients to ensure the firms we do business with align with our mission and values. Screens of clients include:

• A review of the firm’s website and a news search to understand any conflicts with Malk values, including firm diversity and potential discrimination/harassment cases
• A review of the firm’s current and historical portfolio companies to understand if the firm has invested in companies whose core products/services are detrimental to stakeholders or conflict with our public benefit corporation mandate
• Questionnaires for each reviewed prospective client to document findings and identify any necessary follow-up questions

ESG Maturity Score

When a client is onboarded, the client lead will assign them an ESG Maturity Score (EMS). Clients will be scored 0-3 across 20 criteria assessing ESG Policies and Commitments, ESG Governance, ESG Communications and Reporting, ESG in the Investment Process, Diversity, Equity, and Inclusion, and Climate Risks and Opportunities for a total possible score of 60 points. Malk will assess the EMS every quarter to understand how clients have improved or where there is area for further growth to measure Malk’s impact on client programs.

Impact KPIs

Part of the requirements placed on Malk as a PBC is to collect key metrics to display the business’s public benefit, which are included in Malk’s annual Benefit Report to stakeholders. In addition to tracking clients’ EMS, Malk measures key performance indicators to understand our impact and our benefit. These KPIs are Total Client AUM, Clients Using GP Advisory, Number of Portfolio Companies Monitored, and Number of Due Diligence Reviews Conducted. Malk assesses trends in these KPIs quarter-over-quarter and year-over-year to understand our progress and areas where we can improve in realizing our impact.

Malk understands the importance of living our values and leading by example on ESG performance. We embrace the spirit of continuous improvement and will consistently investigate ESG best practices and update this policy accordingly.