Future Standard retail responsible investment Policy

It is a natural extension of the Firm’s mission, vision and values to have a Responsible Investment policy and continuously integrate Responsible Investment concepts into our business. While many of our earliest practices already aligned with Responsible Investment principles, the purpose of this policy is to formally acknowledge our practices and outline how FS further applies Responsible Investment considerations to our decision-making in three specific areas of our business:

From FS’ earliest days, our leadership team implemented Responsible Investment practices in the Firm’s operations, long before adopting this formal policy. Over the years, we actively took steps to reduce our environmental impact, prioritize a diverse workplace and equitable access to opportunity, foster an inclusive environment in which all employees feel a sense of connection and belonging, and provide our colleagues with physical fitness, nutritional wellness and other health-related programs.

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In addition, the Firm has established a variety of employee resource groups (“ERGs”) (i.e., the FS Women’s Network, FS Heroes (veteran focused), FS Pride (LGBTQIA focused), FS In Color (people of color focused) and FS Family Network (working parent and family focused); these ERGs are integral parts of our employees’ work. This growing network of ERGs has spearheaded partnerships with affinity and charitable organizations, led to professional development opportunities for existing employees, and helped to recruit new colleagues.

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FS has engaged in leading diversity and inclusion initiatives with affinity organizations, particularly those within our industry, such as, participation in the Money Management Institute’s Diversity & Inclusion Committee and Gateway to Leadership program, diversity and inclusion initiatives of the Institute for Portfolio Alternatives, Morgan Stanley’s Equity Collective, and Nicsa’s Diversity Project, to name a few.

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The Firm continues to invest heavily in education for our clients, our colleagues and the community alike. In 2021, as an enhancement to the Firm’s training program, the Firm introduced firm-wide Foreign Corrupt Practices Act training for all employees to supplement the annual anti-money laundering training in which we engage.

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We have also always encouraged philanthropy, volunteerism and civic and community leadership. The Firm offers (i) unique, days-of-service programs, (ii) charitable matching and contributions to dozens of civic causes, in each case, through the FS Foundation, (iii) training colleagues for and matching them with non-profit board roles. Further, FS is the founding member of Philadelphia Financial Scholars, an innovative program that provides high school students and their families with financial literacy and entrepreneurship education. FS dedicates a significant amount of time to firm culture and developing programs that ensure FS continues to emphasize the individual and corporate attributes that the Firm values – agility, grit, collaboration, execution, health and high performance, intellectual growth, creativity, diversity, inclusion and belonging.

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And perhaps most importantly, the Firm continues to lead the industry with best practices. With respect to governance, the Firm works closely with the Funds’ boards of directors to ensure that governance matters are carefully reviewed. Nonetheless, we remain committed to doing all we can to improve our Responsible Investment practices in an ever-changing world by building upon existing practices and programs and looking for new opportunities to be an even more responsible corporate citizen and upholding our fiduciary responsibility to our investors and shareholders.

For the purposes of this policy, the following are the types of Responsible Investment factors that may be considered by an Investment Committee and are for illustrative purposes only:

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Environmental Factors: carbon emissions, greenhouse gas emissions, climate and ecosystem change, renewable energy, natural resource depletion, pollution.

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Social Factors: workplace policies and conditions, workers’ rights, child and slave labor, product safety, community health and safety, discrimination based on race, sex, gender, gender identity, sexual orientation, disability, language, religion or social status, ethical supply chain sourcing, privacy and data security, diversity, respect for human rights and civil liberties, war, acts of terrorism.

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Governance Factors: executive compensation, shareholder rights, business ethics, anti-bribery, anti-corruption and anti-money laundering and compliance with accounting and auditing standards.

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There may be instances where a material Responsible Investment risk is identified but the Investment Committee determines, based on the overall assessment of the investment opportunity, to proceed with the investment. In these circumstances, depending on the structure of the investment, FS investment professionals may seek to engage with portfolio company management teams to encourage positive change and advance Responsible Investment practices, particularly where they believe such engagement could mitigate such risk or enhance the investment performance of the portfolio company.