This year’s sustainability report highlights Carlyle’s continued progress integrating sustainability as a tool to seek long-term value creation for our investors. We believe our impact as a firm is rooted in building better businesses and believe sustainability is a core lever in this work.

Amidst a backdrop of market and geopolitical volatility this past year, certain sustainability themes rose to the forefront: energy independence and security, supply chain resiliency, evolving customer expectations, and the increased energy demands of a world embracing artificial intelligence—all combined with the global drive toward decarbonization.

These themes are evolving rapidly and are deeply interconnected. This year’s report is titled “Sustainable Pathways,” given our belief that there is no one superhighway to navigating this complexity. As investors, we work to use investment insights, evolving data and analytics, the power of diverse perspectives, and cutting-edge science and technology to build the best pathway for each individual business. We believe prioritizing resilient investment outcomes grounded in sustainable business models can produce more durable cashflows over the long term.

With great complexity comes great investment opportunity, however, and nowhere is that more clear to us than the energy transition. At Carlyle, we have long maintained the view that we need to invest in the energy transition, not divest from it. We are committed to using our capital, expertise, and global resources to help companies across industries and generate long-term value during the energy transition. Importantly, this work spans the full spectrum of electrons and molecules across our energy system. We share more about our progress in this space in our fourth Task Force on Climate-related Financial Disclosures (TCFD) report, later in this document.

When used effectively, we believe that a focus on sustainability can be a means to honing an investment edge in a rapidly changing world and can make us better stewards of capital. We continue to hold that integrating sustainability into our investment processes provides an additive lens that we believe can provide opportunities for our portfolio companies to drive revenues, reduce costs, secure more efficient financing, and strengthen their competitive positioning.

As always, we understand there is still meaningful work ahead. Our team remains focused on driving forward long-term value for our investors.

Harvey M. Schwartz
June 26, 2024

1. Please see our TCFD Report, included as part of this document, for further information.