Better Businesses Better Results

INSIDE THE IMPACT REVIEWINTRODUCTION
Letter from our CEO, Kewsong Lee
Impact Highlights

3
4

02

OUR APPROACH TO IMPACT

703

ESG INTEGRATION IN GLOBAL CREDIT

11

04

GLOBAL INVESTMENT RESOURCES

1405

PERSPECTIVES ON
ESG-LINKED FINANCING TOOLS

16

01

A Conversation with Megan Starrand Sam Lukaitis

06

07

08

OUR IMPACT AT CARLYLE

19

Addressing Cyber Threats
Impact at Carlyle
Carlyle’s Annual Sustainability Workshop

20

PORTFOLIO COMPANY CASE STUDIES

23

Amp Energy
Dept
Liberty Tire Recycling
Novolex
Pharmapacks
Pharmaceutical Product Development, Inc.

24
27
28
30
32
34

CORPORATE ESG DISCLOSURES

36

Click on section numbers and underlined hyperlinks
throughout the Impact Review to quickly explore newsections, pages, and additional content.

CARLYLE 2021 IMPACT REVIEW

21
22

LETTER FROM OUR CEO

Better Businesses,
Better Results
While 2020 was a challenging year, it
underscored that our focus on building betterbusinesses is more important than ever.

As I laid out in our strategic plan during
our 2021 Investor Day, Carlyle is focused on
accelerating growth for an acceleratingworld; nowhere is this more true thanin our approach to impact. In a rapidlychanging world, we believe impact
is a lens for finding efficiencies andcapitalizing on new growth, as we see themarket valuing a wider set of businessmodels and competencies. By helping ourportfolio companies improve across these
dimensions—from creating sustainabilitydriven growth strategies to building morediverse teams—we believe we will build
more valuable businesses and deliver
better results for all stakeholders.
Impact generation is value creation for the
21st century, and we clearly highlight thoseresults in our 2021 Impact Review. From
our sale of Liberty Tire Recycling, where
sustainability helped drive buyer demand,
to our investment in Amp Energy, whichis accelerating the low-carbon energy
transition, we see opportunities for better
results across industries and geographies.
As a firm, we also had several notable
milestones over the past year. We
published our first Taskforce on Climaterelated Financial Disclosures (TCFD) reporton climate-related financial risks andopportunities, became a founding member

CARLYLE 2021 IMPACT REVIEWof the One Planet Private Equity Funds
Initiative, initiated carbon footprinting
across several of our investment strategies,
and completed more than $6.5 billion in
ESG-linked financings. This included theformation of the largest ESG-linked private
equity credit facility in the U.S., a $4.1 billion
vehicle with the price of debt directly tied
to our goal of having 30% diverse directors
on the boards of Carlyle-controlled
companies within two years of ownership.
As I said last year, at Carlyle, impact isn’t aproduct; it is a process. This year, I add that
impact is also a mindset, as we continually
look to find ways to build better businesses
and ultimately, better results. While 2020
was a year of significant progress, our workand commitment to these efforts continue
in 2021 and beyond. We are grateful for thepartners we have in this important journey
and look forward to sharing more with youin the year to come.

KEWSONG LEE

Chief Executive Officer
June 30, 2021

3

IMPACT HIGHLIGHTS

2020 AND EARLY 2021
IMPACT HIGHLIGHTS

75%$6.5BNreached in ESG-linked financings

Fourthyear of corporate carbon neutralityof our employees workfrom offices withmajor green-building
certifications$382MNFive

in capital committed to renewable
and sustainable energy companies

80%of our employees
participated in
unconscious bias
training

100+
Partnered withorganizations to address theimpact of the COVID-19 pandemic onvulnerable communities

First
Published our100%

CARLYLE 2021 IMPACT REVIEW

score for the fourthyear in a row on
the HRC Corporate
Equality Index

Taskforce on Climate-related Financial
Disclosures report$4.1BNlargest ESG-linked U.S. private
equity line of credit

274
MWfull time ESG & Impact professionals

The only private
equity firm
included in the Bloomberg Gender-Equality Indexof new renewableenergy capacity
installed...
...these investments savethe equivalent of 32MN
gallons of gas annually

32MN
4IMPACT HIGHLIGHTSGLOBAL REACH OF RENEWABLE
ENERGY INVESTMENTS IN 2020

UnitedKingdom

UnitedStates

Spain

Japan

India

Six

countries reached by the acquisition,
financing, development, and constructionof renewable energy projects

Australia

284,521
MTCO2etotal CO2e avoided from the grid

CARLYLE 2021 IMPACT REVIEW5IMPACT HIGHLIGHTSDIVERSITY, EQUITY & INCLUSIONAt Carlyle, we know thatdiverse teams performbetter, so we seek to create
a community where we
continually exchange insights,
embrace different perspectives,and challenge the status quo.
We believe diverse teams ask
better questions and inclusive
teams find better answers.

GLOBAL DIVERSITYBOARD DIVERSITY

23%

of our current
senior leaders are
women

29%

of senior leader
new hires were
women

44%

of our current
employees are
women

56%
of new directors in our goaleligible controlled companies
globally were diverse1

>50%

46%

of our $260 billion
in AUM is managed
by womenof our new hires
were women58%

of our new hires in
Europe and 52% in
Asia were women

U.S. EMPLOYEE DIVERSITY

26%

37%

42%

54%

56%

63%

of our current U.S.
senior leaders are
womenof our U.S. investment
professionals new hires
women, Black, Latinx, or
Two or More Racesof our current
employees in the U.S.
are ethnic minorities 2of our 2021 U.S.
Corporate Private Equity
associate class are womenor ethnic minoritiesof our new hires in
the U.S. were ethnic
minoritiesof our new hires in
the U.S. were women or
ethnic minorities

1
Directors added to Corporate Private Equity-controlled portfolio companies that were held for two years as of Dec. 31, 2020. Diversity data by gender women(globally) and race/ethnicity data is represented in the U.S. and where local regulations allow.
2
U.S. ethnic minorities include American Indian/Alaskan Native, Asian, Black, Hispanic, Native Hawaiian, other and two or more races.
Representation data as of 1/1/21. Hire data as of 12/31/20.

CARLYLE 2021 IMPACT REVIEW

6

SECTION TWO

Our Approachto ImpactCARLYLE 2021 IMPACT REVIEW7

OUR APPROACH TO IMPACT

A

process is only as good as its results. Our 2020
Impact Review described how we embed impact
into our investment processes by reimagining ourcore Environmental, Social, and Governance (ESG)
integration, focusing on systemically important
issues—such as climate change, ESG data, anddiversity, equity, and inclusion—and using the levers ofprivate capital in new and innovative ways.

Last year’s report focused on how weembed impact; the 2021 Impact Review
focuses on what results that leads to.
The key dimensions of impact at Carlyle
are sustainable growth, climate resilience,strong stakeholder ties, engaged
employees, and diverse and inclusive
teams. We believe businesses that excel
along these dimensions increasingly
outperform their competitors. In addition,
we believe that as our firm excels along
these dimensions, we will consistently build
on our capabilities to deliver results forour stakeholders. Some highlights from ourwork this year include:

SUSTAINABLE GROWTH
We continued to strengthen the firm’s
governance on sustainability, with regular
updates to the Carlyle Board of Directors
on our strategy and oversight from Janet
Hill, Carlyle independent director andBoard lead on ESG and Impact.
We expanded our dedicated ESG

CARLYLE 2021 IMPACT REVIEW

and Impact team globally, adding newexpertise in EMEA and the U.S., along withhiring our first dedicated professional
focused solely on ESG in Global Credit.
We revised and refreshed our firmwide
ESG Policy and our Investment Exclusions
and Parameters policy, which provide
guiding frameworks to enable more
efficient and effective decision-making.
We reimagined our approach to core
ESG integration by building a new
ESG assessment for our private equity
investments, engaging in a host of value
creation activities across our portfolio
companies highlighted through casestudies in section 7 and designing aproprietary ESG materiality analysis tool
to support our Global Credit platform
highlighted in section 3.
THE RESULT: We developed
robust governance and effective ESG
integration, which we believe drive
better-informed investment decisions,more avenues for value creation, andstronger risk management at Carlyle.

CLIMATE RESILIENCE
We led our peers as one of the firstglobal investment firms to publish a
TCFD report on the climate-related risks
and opportunities we see across ourbusiness.
We participated as a founding
member of the One Planet Private Equity
Funds Initiative (OPPEF) with a groupof investors committed to integratingclimate change analysis across ourinvestment processes.
We closed several investments throughour Renewable and Sustainable Energy
platform, a dedicated team addressing
the energy transition by investing
globally in the renewable energy andsustainable resources sector, such as ourinvestment in Amp Energy profiled on
page 24.
We initiated bottom-up carbon
footprinting for our majority-owned
companies in the latest generation
funds in our three primary Corporate
Private Equity strategies: US Buyout,
Europe Buyout, and Asia Buyout. Carbon
footprints are used to inform work acrossportfolio companies, such as Novolex’s
carbon reduction targets highlighted on
page 30.
We hosted a climate scenario
workshop to model the potential impact
on Carlyle’s investment portfolio under
different climate scenarios.
We achieved our fourth year ofcarbon neutrality across our own
corporate activities.
THE RESULT: We positioned Carlyle
and our portfolio companies to better
mitigate the risks and capture theopportunities from climate change andthe energy transition.

8

OUR APPROACH TO IMPACT

At our Sustainability
Workshop, companies
learned about creatingclimate-resilient strategies,
how to build and retain
a diverse and inclusive
workforce, and best practices
in building board-level ESG
competencies.
STRONG STAKEHOLDER TIES
We published our second year of
Corporate ESG Disclosures in section 8 ofthis report, which draw from best practices
across the Global Reporting Initiative (GRI)and Sustainability Accounting Standards
Board (SASB) frameworks. For the first timein 2021, we incorporated guidance fromthe World Economic Forum’s International
Business Council’s work on common
standards for ESG.
We hosted several ESG and impact
events for our fund investors, including
thematic sessions, such as our “Not
Another ESG Data Call” in December
2020, geographic gatherings, such as aremote event for our Japanese investors,
and ESG presentations at several Investor
Advisory Committees (IACs) as well as atour 2021 Investor Day.
We published regular ESG reporting,including bespoke ESG reports for severalof our largest strategies, as well as
thought leadership such as a podcast
and white paper on integrating ESG in
Global Credit.
We participated in a variety of industry
conferences on ESG and impact, suchas Financial Times’ Investing For Good,
SuperInvestor, SuperReturn, Pension

CARLYLE 2021 IMPACT REVIEW

Bridge, Responsible Investment Forum,
Business for Social Responsibility,
Ceres, and more. We also are an active
member of the AIMA Global Responsible
Investment Committee, the Emerging
Markets Private Equity Association(EMPEA), the European Leveraged
Finance Association (ELFA) ESG Working
Group, the Private Equity GP ESG Working
Group, and became a formal supporterof the TCFD in 2020.
We hosted a Sustainability Workshop
with more than 60 attendees from ourportfolio companies to help inform andcreate connectivity across our platform.
Companies learned about creatingclimate-resilient strategies, how tobuild and retain a diverse and inclusive
workforce, and best practices in building
board-level ESG competencies.
THE RESULT: We clearly communicatedwith our key stakeholders andcontributed to significant developmentsin the ESG and impact sector.

ENGAGED EMPLOYEESWe provided resources to our portfolio
companies designed to benefit employees
and enhance their experiences. Our Talentand Organization Performance team works
with portfolio company management tomaximize organizational and leadershipeffectiveness, as profiled through ourwork with Pharmapacks on page 32. Our
Healthy Benefits Initiative helps drive better
healthcare outcomes for portfolio company
employees at lower costs, demonstrated
through our work with PPD on page 34.
We further strengthened Carlyle’s own
human capital best practices throughfacilitating an annual employee feedback
survey and providing significant remotewellness services to employees, such as

9

OUR APPROACH TO IMPACT

meditation and yoga classes throughout
the pandemic. Our fulsome approach tohuman capital is further detailed in our
Corporate ESG disclosures.
We hosted regular trainings for
employees on ESG integration andemerging thematic ESG issues. The ESG
and Impact team hosted trainings for new
employees, as well as ongoing education
for members of our workforce, several
internal events, such as remote lunches on
the topics of ESG and impact investing,climate change and renewable energy.
We organized an array of volunteering
activities across our global offices.
THE RESULT: We developed and launched
an evolving toolkit to help drive value
through better human capital practices at
Carlyle and across our portfolio companies.

DIVERSE AND INCLUSIVE TEAMS
More than 80% of our employees
participated in virtual Better Decisions:
Mitigating Unconscious Bias training
sessions facilitated by leaders fromacross the firm. The initiative seeks tobuild awareness of unconscious bias andprovides concrete tools and practices tomitigate the negative effects of bias.
More than 600 of our employees
globally participated in listening sessions
where employees shared their uniqueexperiences with multicultural differences.
This inspired our people to expand
beyond the lens of their own perspective
and build a deeper understanding to be
more effective allies.
We made inclusion a core management
and leadership competency central in
the development and assessment of our

CARLYLE 2021 IMPACT REVIEW

people. All nominees for promotion to
Managing Director in 2020 took partin a full-360 assessment that included
an evaluation of their skills in inclusive
leadership and management.
We made continued progress incultivating a diverse workforce at our firm.
63% of new hires in the U.S. were womenor ethnic minorities; 58% of new hires in
Europe and 52% in Asia were women.
We expanded our board diversity
goal to 30% of all directors in Corporate
Private Equity-controlled portfolio
companies by 2023. In 2020, 56% of new
directors in our goal-eligible controlled
companies globally were women, Asian,Black, or Hispanic.
We achieved a perfect score forthe fourth year in a row on the HRC
Corporate Equality Index.
Carlyle and AlpInvest became
signatories to the Institutional Limited
Partners Association Diversity in Action
initiative, representing our commitment
to advancing diversity, equity, andinclusion (DEI) in the workplace with
our investment partners andthe broader global investment
management industry.
We partnered with Ascend and100 other organizations to support
an action agenda to address theadverse impact of the pandemic onvulnerable communities.
THE RESULT: We achieved clear
progress toward increasing thediversity of our teams and portfolio
company boards. The data from ourown companies support the growing
consensus that diversity improves
decision making and financial outcomes.
2020 was a year of disruption in many63%of new hires in the U.S. were womenor ethnic minorities

58%

of new hires in Europe
were women

52%of new hires in Asia
were women

ways, but it also highlighted one of themost important components of our ESG
work—dynamic materiality. ESG issues
are always evolving and changing.
Carlyle and our portfolio companies
therefore must constantly look for new,emerging material issues to continue
to manage risks and opportunities.
Throughout the COVID-19 pandemic,
we saw business models rapidly andoften significantly shift to adapt to new
circumstances. Over the past year, weobserved that agile, forward-thinking,and focused management teams witha broad range of stakeholders betternavigated the significant disruption.
We believe these characteristics
are indicative of ESG competencies

and indeed indicative of overallmanagement excellence.
We like to say that we will neverreach “ESG nirvana” and conclude ourwork. We look forward to continued
collaboration with our portfolio
companies and partners in this ongoingquest to better understand and manage
the material ESG issues we face in a
rapidly accelerating world, as we believe
this will enable us to drive long-term,
sustainable value.

We build betterbusinesses because
we believe they deliver
better results.

10

SECTION THREE

ESG Integrationin Global Credit
CARLYLE 2021 IMPACT REVIEW

11

ESG INTEGRATION IN CREDITT

he field of ESG has long been a focus for equity markets,
but in the past few years we’ve seen its growing
importance for credit markets, alongside a heightened
focus on ESG from other credit market participants, such as
management teams and financial sponsors.

In our Global Credit business, we use
differentiated data sets that provide
us with the information needed to makebetter decisions—we have found that
ESG data are increasingly one of thosedifferentiated tools. However, credit
presents unique challenges for good
ESG integration. When compared to
private equity, credit frequently has
higher deal volume, shorter diligencewindows, less access to managementand data, and fewer high-quality ESG
tools to analyze investments. Basedon the foregoing, we knew we neededa systematic approach that could
integrate into our fundamental credit
investment processes, and which would
help us efficiently and effectively
identify and analyze material ESG issues
for a given investment.
Led by a cross-platform ESG working
group, we rigorously surveyed the fieldof available ESG resources for our Global
Credit platform, but couldn’t find existing
tools fit for our purposes. Over thecourse of 2020, we built a proprietary
ESG materiality analysis tool using the
Sustainability Accounting Standards
Board (SASB) standards, which helps us
focus in on an industry and sector’s mostmaterial ESG issues. Launched acrossmost of our Global Credit platform in
January 2021, the tool also integrates
1

CARLYLE 2021 IMPACT REVIEW

several country-level ESG risk data sets
for geographies where an asset has
major operations or supply chains. This
gives additional color on issues such as
corruption, anti-money laundering, andthe physical risks of climate change.
Credit research analysts use our tool
as an input to their fundamental
diligence to help efficiently understand acompany’s or asset’s exposure to material
ESG risks, as well as determine how
well risks are managed. Using the SASB
data and our own proprietary inputs,
the tool also guides credit researchanalysts through potential engagement
topics and questions and offers tailored
metrics tied to material ESG issues. As
of January 2021, this ESG materiality
analysis is performed for each newinvestment our Global Credit Investment
Committee considers, and a summaryof the ESG analysis is included in theInvestment Committee memorandums1. We
constantly refine our proprietary tool as
we gather feedback from our investment
professionals and incorporate new data
sets and emerging thought leadership.
While we have traditionally evaluatedmany of these risks during our diligenceprocess, this new proactive and systematic
approach helps pull to the forefront of
the investment process some of the lessThis does not include Carlyle’s Aviation and Structured Credit strategies. These teams have tailored ESG processes more relevant to their distinct strategies.

12

ESG INTEGRATION IN CREDIT

with third-parties, we discovered thatthe target company employed aggressive
lead generation and marketing practices
to secure new customers. Given thetarget demographic was both older andlower-income, and the aggressive sales
practices uncovered, our team declined
to pursue the transaction.
Lastly, one of our credit investments
in a shipping company was impacted
by significant travel restrictions during
the COVID-19 pandemic. This presented
difficulties in conducting timely crewchanges and led to extended crew
stays on board. The team monitored
the situation and helped to provide
additional mental health support tothe seafarers. While we frequently haveobvious, but potentially significant risk
factors for a new investment. Integrating
ESG data and analysis gives us the ability
to properly price deals and ensure weare compensated as investors for the
associated risks, and in certain cases
determine not to make an investment. We
believe this approach, paired with ourdedicated internal ESG expertise, provides
us with a consistent and advantaged
footing to assess, monitor, and manage
these highly relevant risks, and ultimately
make better investment decisions.
Integrating ESG represents an evolution in
our investment process. These factors do
not necessarily eliminate or prevent us fromconsidering certain investments, but instead
help us to increase the nuance with which
we can underwrite and price risk.

CARLYLE 2021 IMPACT REVIEWFor example, one of our Global Credit
teams analyzed an investment locatedon coastal real estate and identified
potential material downside physicalrisks from climate change, such as theimpact from sea level rise or an increasein extreme weather events. Thesematerial risks were one of the factorsthat led to us declining to pursue thatparticular investment.
Our access to better ESG data andinformation could lead us to develop
strategies to mitigate the associatedrisks, or ultimately lead our team to passon an investment if we do not believe weare appropriately compensated for thoserisks. ESG is a lens through which we canfocus on material information that when
considered and integrated with otherless control over our credit investments
than our equity investments, we seek tomonitor emerging ESG risks in our credit
investments over our investment period
and engage with equity sponsors andmanagement teams where appropriate.
A common misconception is that ESG isan “end state” or that there is a rulesbased implementation for sustainability.
At Carlyle, we focus on how to makebetter decisions over time in pursuit ofexceptional outcomes. As our Global
Credit platform continues to grow, wehave found that ESG integration continues
to be a valuable tool that can give us a
more fulsome set of data to make better
decisions and mitigate downside risks.

diligence information can promote better
investment decisions over time.
Our Direct Lending team evaluatedanother opportunity in 2020 alongside
several sponsors to provide financing
to a direct-to-consumer marketer
and installer of home repair andremodeling services. The company’s
target demographic was seniors; 81%of customers were older than age
55 with lower-than-average FICO
scores. Relative to the target customer
demographic, the cost of revenue fromthe company’s average job—$10,000—
was very expensive, representing morethan 10% of the average consumer’sannual income and 5 to 10% of theaverage overall home costs. Aftervarious channel checks and diligence

13

SECTION FOUR

GlobalInvestment
Resources
CARLYLE 2021 IMPACT REVIEW14GLOBAL INVESTMENTRESOURCESA NETWORK OF SUBJECT-MATTER EXPERTS

T

he ESG acronym spans so many topics, it would
be impossible for any one person or team to be
an expert in all of them–from energy management toenvironmental liabilities, diversity and inclusion, anticorruption and bribery, cybersecurity, and more.

At Carlyle, our dedicated ESG and Impact
team serves a connective function—
ensuring the most material ESG topics
are covered during diligence, engaging
with third-party specialized expertise
as appropriate, advising companies onsustainability strategies, and tracking andreporting on ESG data—but we also havespecialized teams of in-house experts forcritical functional areas.
While these areas are sometimes grouped
under the ESG “umbrella,” we believe
they are distinct fields which require
skilled specialists. To drive better results,
Carlyle has institutionalized a number ofthese important areas to enhance ourcompetitive “edge” in sourcing, diligence,and value creation at portfolio companies.
Our Global Investment Resources (GIR) teamis a group of more than 20 professionals
dedicated to strengthening operations
and creating growth with our portfolio
companies. Carlyle’s ESG and Impact
function sits within our GIR team, alongsideother areas of functional expertise.
The GIR team works collaboratively with
Carlyle investment professionals during
the deal lifecycle and focuses on creating
value during the transaction process andthrough our partnership. During diligence,
the GIR team seeks to understand the

CARLYLE 2021 IMPACT REVIEW

investment thesis and identify potential
opportunities to improve portfolio company
operations. Post-investment, the GIR teamalso seeks to support portfolio company
management teams to execute theseobjectives, which in some cases may mean
driving transformational change at a
portfolio company.
The GIR team has several critical functional
areas in addition to ESG and impact,
including talent and organizational
performance, digital transformation,
information technology, procurement,
transaction support, revenue growth, andgovernment affairs. In addition to our ESG
and Impact team, Carlyle has a dedicatedDiversity, Equity and Inclusion (DEI) team. We
believe ESG is a team sport, and Carlyle’s
Global Investment Resources capabilities work
to ensure that we have our bases covered.

20+

professionals make up our GIR team,dedicated to strengthening and growing
our portfolio companies

15

SECTION FIVE

Perspectives
on ESG-linked
Financing Tools
A CONVERSATION WITH MEGAN STARR,
GLOBAL HEAD OF IMPACT, AND SAM LUKAITIS,
DIRECTOR, CAPITAL MARKETS GROUPCARLYLE 2021 IMPACT REVIEW16PERSPECTIVES ON ESG-LINKED
FINANCING TOOLSE

SG-linked financing aligns investment and sustainability
outcomes in innovative ways. We’re proud to be an
early adopter of integrating environmental and social
considerations into financing arrangements. Megan Starr,
Carlyle’s Global Head of Impact, and Sam Lukaitis, a Director
in Carlyle’s Capital Markets Group, discuss our firm’s
evolution in the ESG space and the impact the firm has onelevating the ESG agenda across the private equity industry.

MEGAN STARR

Global Headof Impact at Carlyle

is Carlyle
Q: Whyinterested in integrating

ESG considerations into its
financing arrangements?

We increasingly see
ESG incorporated into
financings across the corporate investment
grade world demonstrated by the growing
number of green bonds, green loans,and other green “use of proceeds” deals.
But the leveraged debt issuance coming
out of the private equity ecosystem has
been historically slower to engage with
ESG themes in the same way. That haschanged over the last couple of years as
SAM LUKAITISCARLYLE 2021 IMPACT REVIEWQ

SAM LUKAITIS

Director, Carlyle
Capital Markets Group

ESG continues to grow in prominence acrossindustries, a trend that has accelerated
recently with the pandemic.
At the same time, we work alongside several
portfolio companies with sophisticatedsustainability strategies, such as Jeanologia,
a developer of eco-efficient technologies
for the denim industry, and Logoplaste, amanufacturer of rigid packaging solutions,and consistently consider how to drive
further progress. We therefore saw a realopportunity to take these strategies andformalize them into the portfolio companies’
capital structures for the first time, and thus
created new, financially accretive methods
to incentivize even stronger performanceon quantitative ESG metrics.

17

PERSPECTIVES ON ESG-LINKED
FINANCING TOOLSPORTFOLIO AND FUND-LEVEL
TRANSACTIONS SINCE 201820 1 82020

JEANOLOGIALOGOPLASTE

Margin ratchet linked towater savings.

Margin ratchet linked to
CO2 savings.

Represented the first European
sponsor-backed financing withdebt pricing directly linked to
ESG factors.

Represented the first
institutional term loan with
ESG metrics issued by a
private equity sponsor.

202 1
FLENDERACROTEC

Margin ratchet linked to theinstallation of new gearboxes
in wind turbines. Company
also plans to pass on a
portion of interest savings toenvironmental charities.

“Use of proceeds” margin
ratchet which can be accessed
for initiatives that improve
environmental performance.

Represented one of the largest
ESG-linked loans in the Term
Loan B market at the time.

ESG-LINKED CREDIT
FACILITY FOR CARLYLE’SAMERICAS CORPORATEPRIVATE EQUITY
PLATFORM

ESG-LINKED CREDIT
FACILITY FOR
ALPINVEST COINVESTMENT FUND VIII

Margin ratchet linked to board
diversity of portfolio companies.

Margin ratchet linked to ESG
metrics at both the Fund and
AlpInvest level.

Represented the largest ESGlinked private equity credit
facility in the U.S. ($4.1 billion).

Represented the first ESG-linked
credit facility for a private
equity fund-of-fund.

Portfolio TransactionCARLYLE 2021 IMPACT REVIEW

These financings areprime examples ofthree of our ESG priorities. First, ourfirmwide framework for identifying
material ESG issues in due diligenceis grounded in the Sustainability
Accounting Standards Board (SASB)
standards. This framework provides
our investment professionals with astructured guide for focusing on themost material ESG issues during theinvestment process. These issues, in turn,have formed the basis for many of the
ESG-linked financings we’ve structured.
MEGAN STARR

Fund Level Transaction

Second, Carlyle is focused on driving
positive ESG change over time at our
portfolio companies and we believe
ESG-linked financings provide aneffective tool to further structure thatchange thesis into our deals. This is how
we incentivize additional progress onmaterial ESG issues that are important
across our portfolio, from climate change
and the energy transition to diversity
and inclusion, and resource efficiency.
And finally, we continuously assess
what is next in the ESG space. As
previously mentioned, there is aconcept of dynamic materiality in thefield of ESG as new, important issues
constantly emerge for companies to
notice and manage. We’re eager toinnovate by using the traditional
tools of private equity and thesefinancings are a great example of how
we take a creative lens to advancethe intersection between profitability,
environmental, and social outcomes.

long has Carlyle
Q: How
focused on ESG

integration and what are themilestones achieved so far?

In the last few years,
we believe Carlyle
has really pioneered integrating
environmental and social considerations
into financing arrangements of portfolio
companies in Europe. Examples include
Jeanologia (2018), Logoplaste (2020),
Flender (2021), and Acrotec (2021)
highlighted on to the left.
SAM LUKAITISThere has been a unique angle to eachof these transactions. We secured pricing
on the company’s debt tied directly tomaterial environmental ESG factors,
such as water (Jeanologia) and CO2(Logoplaste) savings. On the Flendertransaction, we incentivized management
to accelerate a business line that helps
to deploy wind power, while at Acrotec
a “green use of proceeds” was structured
into its revolving credit facility to help
incentivize capital expenditure projects
with a significant environmental benefit.
While each financing was structured
differently, these loans all seek to alignincentives and reward management teams
for positive environmental progress.
More recently, we havelooked at ESG-linked
financings at the fund level. In February
2021, we secured the largest ESG-linked
private equity credit facility in the U.S.—a$4.1 billion facility for our Americas
Corporate Private Equity platform. In thisfacility, the price of debt is directly tied toour goal of having 30% diverse directors
on the boards of Carlyle-controlled
companies within two years of ownership.
We believe this is the first facility of its
kind to focus exclusively on advancing
MEGAN STARR

board diversity and we believe it is a
critical issue for us to prioritize.
AlpInvest has also secured an ESG-linked
credit facility for its Co-Investment Fund
VIII. The results are tied to objectives
at both the fund and AlpInvest level,
providing an effective incentive to further
ESG integration across AlpInvest’s businessand through its wider spheres of influence.

are the benefits
Q: Whatof these transactions forthe different stakeholders?

On a macro level,
ESG-linked financings
further incentivize strong progress onmaterial ESG issues and drive better
financial outcomes for our portfolio
companies and our key stakeholders.
Our portfolio companies are excited bythese structures. Management teams
are increasingly focused on sustainability
and recognize its importance in creating
business value. These transactions
create tangible examples of aligningbusiness priorities with quantitative ESG
metrics. We believe that progress onenvironmental and social targets clearlyleads to costs savings. We’re excited by
the broad uptake and to see companies
using these transactions to further theirsustainability strategies. Anecdotally,
we’ve also seen increased demandfor debt issuances that have this ESG
linkage, which is another helpful outcome.
MEGAN STARRManagement teams
across our portfolio arekeen to strengthen and highlight theirimpressive sustainability credentials. Now,
we can provide them with an effective
tool to formalize these concepts into
capital structures and the increased
external visibility has been empoweringand rewarding for these businesses.
SAM LUKAITIS

18

SECTION SIX

Our Impact
at Carlyle
CARLYLE 2021 IMPACT REVIEWOUR IMPACT AT CARLYLE

ADDRESSING CYBER THREATS

A

s the world recovers from the challenges presented
by COVID-19, businesses are experiencing a rapidtransformation in how their customers, employees, andsuppliers interact. While these changes have unlocked
new opportunities, we also believe they have enabled an
unprecedented number of cyber threats.

Carlyle seeks to ensure that our portfolio
companies have the capabilities necessary toprotect against and respond to cyber threats.
This key tenant of our technology strategy
is also embedded across multiple materialissue categories in the SASB framework,from data security to customer privacy andcritical-incident risk management.
We’ve made cybersecurity a central
focus of how we evaluate investments
and support our portfolio companies indeveloping their technology strategies.
Our Global Investment Resources(GIR) Technology team established acybersecurity platform for our portfolio
companies that enhances their internal
capabilities with a global networkof experts, risk transfer tools, andleveraged supplier agreements. Throughcontinuous engagement, we provide
portfolio companies with support toassess their level of cyber risk, protect
critical assets, and implement programsfor ongoing improvement.

ASSESSING CYBER RISKIn a constantly evolving threat
environment, understanding cyber risk is

CARLYLE 2021 IMPACT REVIEWa prerequisite for executing an effective
cybersecurity strategy. Starting in the
diligence process, we take a standardized
approach to assessing cyber risk in
potential investments within our Global
Private Equity portfolio. Our findings
are fed into a value creation plan thatprovides a prioritization summary androadmap for addressing opportunities for
improvement. To ensure that these efforts
are having a material effect, several
portfolio companies are regularly scoredand benchmarked against their industry
peers by an independent third party. At
the portfolio level, these evaluations are
combined with other key business metrics
to provide an overall threat assessmentthat is leveraged for data-driven
decision-making.

PROTECTING CRITICAL ASSETS
Occasionally, cyber incidents still occur
despite the measures in place toprevent them. We partner with leading
insurance carriers to provide our portfolio
companies with best-in-class cyberpolicies and resources to respond andrecover. We recognize that the ability
to quickly restore business operations

and minimize the impact of criticalexfiltration are important attributes ofa successful cyber-attack response. We
work closely with companies to ensurethat effective business continuity plansand data protection programs are inplace. Our experience with cyber threats
has also taught us that education is key
in the ability to effectively respond toand mitigate the harmful effects of acyber incident. To ensure an effective
and coordinated response to cyberincidents, we provide training and support
resources tailored to our technical,
financial, and operational portfolio
company leaders.

IMPLEMENTINGONGOING IMPROVEMENT
We do not view cybersecurity as a onetime exercise and recognize that cyberthreats will increase in frequency andcomplexity. To meet these challenges,
we have established a program forcontinuous improvement anchored by aninterconnected community of portfolio
company cybersecurity professionals.
Resources available through ourprogram include leveraged agreementswith providers of security products
and services, expert-led webinars on
critical cyber issues, playbooks andstandardized guidance for cybersecurity
strategy and architecture, acollaboration platform for cybersecurity
professionals, and an in-houseintelligence function for soliciting andsharing best practices. Our offering inthis area continues to grow guided bycyber experts from leading advisorsand direct feedback from the portfolio
companies combatting threats daily.

20

OUR IMPACT AT CARLYLE

IMPACT AT CARLYLE

C

arlyle’s purpose is
to invest wisely andcreate value on behalf of
our investors, portfolio
companies, and thecommunities we serve.
In addition to capital raised and donatedby our employees for COVID-19 relief efforts
profiled in last year’s Impact Review andthe work done in partnership with ourportfolio companies to provide support inlocal communities during the pandemic, we
donated more than $580,000 to over 250
non-profit organizations during the pandemic.
Carlyle matched over 800 of these donations
up to $2,000 in philanthropic gifts tocharitable organizations per employee eachyear under our corporate matching policy. We
also instituted a special program to provide
an additional $1,000 in matching funds foreach employee for donations to a set of social
justice and criminal reform non-profits in
response to recent events.
Our employees also participated in a variety
of volunteer activities across our global
offices, including:
1 WASHINGTON, DC Community of Hopeback-to-school drive and a holiday toy
drive for Boys & Girls Clubof Greater Washington, DC.

2 NEW YORK Holiday toy drive tosupport the students at Carter G.
Woodson School in Brooklyn, NY.
3 HONG KONG Junior Achievement
virtual volunteer workshop.

800+

donations matched by Carlyle up to$2,000 per employee in 2020

$580K+

250+

donated by Carlyle
employees in 2020

non-profit organizations recieved
donations from Carlyle in 2020

26

employees have been hired throughCarlyle’s partnership with Year Up

5 LUXEMBOURG Holiday food andtoy drives.
6 BEIJING & SHANGHAI Fundraisers
to buy hand wash for Tibetan children
during the pandemic.
7 TOKYO Junior Achievement andLearning for All collaboration to provide
educational services to low-income
families; Food drive and online charity run.
8 GLOBAL Virtual volunteer
workshops with Rumie in Washington,
DC, New York, London, Miami, and Los
Angeles.

We furthered our partnership with YearUp, an organization that provides young
adults from underserved communities
with the skills, experience, and support
to help reach their full potential
through professional careers and higher
education. Carlyle has provided morethan a hundred Year Up internships
since 2007. While this partnership
originated with our Global Technology &Solutions (GTS) team, Carlyle expanded
the internship program to additional
teams in 2018. As of 2020, 38 employees
have been hired full-time or brought
on in extended contract positions at
Carlyle through the Year Up partnership.

8
2
1
8

8

4
5
6

8

6

8

7

3

4 LONDON Fundraisers for multiple
organizations and virtual tutoring for students.

CARLYLE 2021 IMPACT REVIEW21

OUR IMPACT AT CARLYLECARLYLE’S ANNUAL
SUSTAINABILITY WORKSHOPO

ur ESG and Impact team’s strategy includes
building connectivity across our portfolio
companies and sharing best practices and collaborative
problem-solving techniques.

In April 2021, we hosted our Annual
Sustainability Workshop and welcomed
more than 60 guests from over 30
portfolio companies. Our virtual format
allowed us to host the event with a larger
reach and include companies from acrossthe globe. The workshop covered someof the most pressing ESG topics facing
companies today such as Diversity, Equity,and Inclusion (DEI), the evolving ESG

60+
attendees at the
Sustainability Workshop

30+

regulatory landscape, climate strategy
development, energy management,sustainability strategy talent andorganization performance, and boardlevel ESG competencies. Speakers included
our Chief DEI Officer Kara Helander, Chief
Performance Officer Mindy Mackenzie,
Board of Directors member Janet Hill, as
well as external partners such as Businessfor Social Responsibility, Ropes & Gray,and Latham & Watkins.
The event served as an opportunity to
discuss a broad range of ESG topics, butalso spurred specific value creation workfor our portfolio companies. For example,
following the workshop our team started
to work with a portfolio company inthe shipping industry to define a robust
sustainability strategy as they face thematerial impacts of climate change on
their business, and a rising influx of ESG
questions from their stakeholders.

portfolio companies attended theSustainability Workshop

CARLYLE 2021 IMPACT REVIEW

22

SECTION SEVEN

Portfolio
Company Case
StudiesWE HIGHLIGHT SOME OF THE RESULTS OURPORTFOLIO COMPANIES HAVE ACHIEVED ACROSSTHE KEY DIMENSIONS OF IMPACT AT CARLYLE.

CARLYLE 2021 IMPACT REVIEW

23

AMP ENERGY

CLIMATE RESILIENCE

Amp Energy
Amp is a global energy transition
platform that develops, builds, owns andoperates renewable energy and battery
storage projects, in addition to serving
as a disruptive grid-edge technology
platform, reimagining the future of thegrid. Amp has become one of the leading
global renewables companies having
successfully developed over 1.8 gigawattsof distributed and utility-scale renewablegeneration, hybrid generation plus
storage, and standalone battery storage
projects around the world.

Sector
RENEWABLE AND SUSTAINABLE ENERGY
RegionNORTH AMERICA

Acquisition Date
DECEMBER 2020

Lead Fund GLOBAL INFRASTRUCTURE
OPPORTUNITY FUND AND RENEWABLE &SUSTAINABLE ENERGY FUNDCARLYLE 2021 IMPACT REVIEW

24

AMP ENERGYAMP ENERGY 2020 METRICS

192,551
MTCO2eCO2e averted from the gridThis is equivalent to...

212,823,442
pounds of coal burned

21,666,592
gallons of gasoline consumed

445,796barrels of oil consumed

41,876

vehicles driven for one year

34,975homes’ electricity use for one year

249,222
MWh
total energy generated

CARLYLE 2021 IMPACT REVIEWC

limate change is one of themost pressing issues of our time,creating unprecedented risks as well
as opportunities for businesses acrossall industries. As a firm, we believe that
better understanding and managing
these emerging risks and opportunities is
integral to creating long-term value forour investors and shareholders. As a corepillar of our firmwide strategy on climatechange, we launched our Renewable
and Sustainable Energy Fund (RSEF) to
capture the opportunities created by
the energy transition and commit toinvest globally in the renewable andsustainable resources sector.

The RSEF team is focused on identifying
investment opportunities where a
successful financial outcome is convergent
with a successful climate outcome: themore renewable energy and storage
projects successfully developed andoperationalized, the more megawatt
hours (MWh) of clean energy generated
for the grid, and the more greenhousegas (GHG) emissions avoided fromcarbon-intensive energy sources.
In 2020, RSEF announced a $47 million
strategic growth investment in Amp
Energy as part of Carlyle’s total$374 million commitment to Amp, aninternational renewables development
and energy transition company. Amp’s
core business is to develop, build, own,
and operate renewable energy andbattery storage projects globally.
Since 2009, Amp Energy has successfully
developed over 1.8 gigawatts of
distributed and utility-scale renewablegeneration projects, hybrid generation
plus storage projects, and stand-alone
battery storage projects around theworld. Amp Energy’s proprietary digitalenergy platform, Amp X, also provides
a diverse portfolio of disruptive andinteroperable solutions, including astate-of-the-art smart transformer
that enables real-time autonomous
management and optimized dispatchof all forms of distributed generationand loads across the grid. RSEF and
CGI’s investment will help catalyze
the continued rapid growth of both
Amp’s asset base and Amp X, within its
core markets of North America, Japan,
Australia, Spain, and the UK.
Amp’s core strategy–to develop, own
and operate, global solar and wind
power generation assets and associatedutility scale battery energy storage
systems (BESS)–is consistent with RSEF’s
overarching impact thesis. BESS helps
mitigate some of the existing constraints
for large-scale deployment of renewables,
allowing greater penetration of solar
and wind electricity on the grid, and areduction in overall carbon emissions.
For example, BESS in conjunction withAmp X’s autonomous platform solution
can be used to store excess electricity
and bridge intermittency issues inherent
to renewable power sources and enable
connectivity to grids that would otherwise
be inaccessible.

games and trivia to serve as a
networking and socializing spacefor employees.
Seeing the impact of COVID in thecommunities in which Amp operates,
during the end-of-year 2020holiday season, Amp supported
three organizations operating in thecommunity:
FRED VICTOR, HOMELESS SHELTER
In-kind food and clothing donations
collected from Amp employees and acash donation of $10,000.
HORIZONS FOR YOUTH, YOUTH
SHELTER Amp provided a $5,000
cash donation and $5,000 in public
transportation cards.

247 MW
total installed capacity

199 MW
new installed capacity

58

full-time jobs created

SECOND HARVEST FOOD RESCUEAND DELIVERY Amp purchased turkeys
for 400 families for the end-of-year
festivities.

COVID-19 RESPONSEIn April 2020, Amp introduced
Employee Health & Wellness Benefits
to assist with the physical, mental andgeneral wellbeing challenges causedby the COVID-19 global pandemic. An
allowance of 100 CAD per month wasallocated to all members of the teamglobally, with a bonus of three months
upfront to be used for purchasinghome fitness equipment. The allowance
continues to date and can be used for
health and wellness-related activities
at the employee’s discretion. At thesame time, Amp also introduced VirtualThursday meetings with scheduled

25

AMP ENERGY

PROJECT SPOTLIGHT:
NEMAIAH VALLEY
Nemaiah Valley is a remotecommunity located 250km north of
Vancouver and approximately 100km
from the nearest electricity grid.
A centralized diesel Genset house
generator is the main electricity
source for the community, which
consists of 74 active residents
and a commercial/administrative
subdivision zone located in thecenter of the valley.
In 2015, the First Nation community
contacted Amp to explore ways ofdeveloping a micro-grid on-site to
reduce their diesel dependency.
Upon extensive due diligence, Amp
determined that a commercial
arrangement was not feasible
with the community. Amp, however,decided to provide pro bono support
for the development of the microgrid, bringing on board additional
development partners, acting as
their Engineering, Procurement andConstruction (EPC) manager andsupporting submissions for grants
and debt.
In March 2021, the micro-grid systembecame operational, consisting ofa 250kW solar photovoltaic (PV)system. The micro-grid reduces thecommunity’s dependency on diesel byover 50%, or by roughly 150 liters ofdiesel fuel daily.

250kW
solar photovoltaic (PV) systeminstalled in March 2021

50%
reduction in Nemaiah Valley’s
diesel dependency“This transaction
demonstrates our continued
focus on identifying andexecuting upon attractive
investment opportunities
such as solar projects andbattery storage technologies
around the world that are
being propelled by theenergy transition.”
POOJA GOYAL

Co-Head of Carlyle
Infrastructure Group

Nemaiah
Valley100km from thenearest electricity grid

CARLYLE 2021 IMPACT REVIEW

26

DEPT

STRONGER COMMUNITIES,ENGAGED EMPLOYEES

DeptBased in Amsterdam, Dept is an awardwinning international agency with over 1,500
experienced thinkers and makers in 13 countries
across Europe and the Americas. One agency
uniting creativity, technology, and data.
Sector TECHNOLOGY AND
BUSINESS SERVICES

Region EUROPE

Acquisition Date JANUARY 2020
Funds CARLYLE EUROPE TECHNOLOGYPARTNERS IV AND CARLYLE EUROPE PARTNERS V

BETTER BUSINESSES | BETTER RESULTS:
BECOMING A CERTIFIED B CORPORATIONMEGAN STARR

Global Headof Impact at Carlyle

DIMI ALBERS

Chief Executive
Officer at Dept

A Conversation with Megan Starr, Global Head of Impact at Carlyle,and Dimi Albers, CEO at Dept.
Listen to a podcast about the why of Dept’s sustainability strategy
and in particular, why they focused on B Corp certification. Megan
Starr and Dimi Albers discuss the results a business can expect fromobtaining B Corp certification and our impact through partnership.

CARLYLE 2021 IMPACT REVIEW

27

LIBERTY TIRE RECYCLINGSUSTAINABLE GROWTH

Liberty Tire
Recycling
Liberty Tire Recycling is the premierprovider of tire recycling services, based in
the United States. By reclaiming more than
33% of the nation’s discarded tires, Liberty
Tire annually transforms more than 190
million tires per year into raw materials for
smart, sustainable products that improve
people’s lives.

Sector INDUSTRIAL

Region NORTH AMERICA

Acquisition Date DECEMBER 2017
Exited 2021

Lead Fund CARLYLE STRATEGIC PARTNERS IVCARLYLE 2021 IMPACT REVIEW

28

LIBERTY TIRE RECYCLING

R

esource efficiency and the circular
economy—designing out waste andkeeping products and materials in thevalue chain through multiple use cycles—areconcepts that have surged to the forefrontof sustainability discussions. The challenge
to implementing these concepts, however,has been finding ways to profitably recycle
and reuse a broad range of goods. The
ability to successfully implement thisconcept was a key component of Carlyle’s
investment thesis when we acquired Liberty
Tire Recycling (LTR) in 2017, and a significant
part of our sale of the business to Energy
Capital Partners, completed earlier this year.
LTR was a premier provider of tire
recycling services in the United States
and Canada. With innovative tools,
technologies, and processes, LTR was
dedicated to finding new and betterways to reclaim, recycle, and reuse scrap
tires for eco-friendly products, keeping
billions of pounds of waste material outof landfills. LTR’s core business of recycling
tires was predicated on the sustainability
growth theme of resource efficiency. Under
Carlyle’s ownership, the company achieved
meaningful impact by diverting waste fromlandfills, collecting and recycling 190 million
tires per year, and transforming morethan three billion pounds of rubber into
innovative, sustainable products.

The company has increasingly
received questions from customers todemonstrate the performance of its ESG
program, with a focus on sustainable
practices in the supply chain, operations,packaging, and product footprint. In
response, Carlyle’s ESG and Impact
team partnered with LTR to enhance
the company’s sustainability strategy
while quantifying the footprint of theirproducts and operations, which we
believed would strengthen their corebusiness and potentially increase thecompany’s attractiveness to a wider
range of potential buyers.

CARLYLE 2021 IMPACT REVIEWAs a first step, LTR and Carlyle developed
an Impact Opportunities Assessment withthe support of Bridge House Advisors, an
ESG and sustainability advisory firm who
specializes in the measurement of impact.
The goal of the assessment was todefine the company’s impact pathways,
and then determine and measureperformance on key, material ESG and
impact metrics to better understand theoperational and product environmental
footprint. This data provided three main
benefits to the company:
Identified opportunities to reducecarbon emissions and energy usage;
Enabled LTR to better articulate thesustainable value proposition of its
products and services; andHelped LTR address customer inquiries on
ESG, which are increasingly an importantpart of how customers select partners.

BETTER RESULTS
These results have the potential togenerate cost savings and provide a more
fulsome picture of the company’s overall
footprint—an important requirement of
LTR’s strategic customers and potential
buyers. The analysis revealed that:

Ultimately, the quantification ofenvironmental impacts was an importantpart of the sale process.
With an improved understanding of its
operational and product level footprint,
LTR utilized the findings to enhance its
overall sustainability strategy. Carlyle
collaborated with a cross-functional LTR
team to identify long-term sustainability
objectives and develop a renewed
corporate level sustainability vision. Thiseffort enabled the company to clarify key
focus areas and ensure alignment withevolving customer expectations.
LTR CEO Thomas Womble believes
that “while sustainability has always
been paramount to us, the partnershipwith Carlyle has helped the firm toemploy a more comprehensive approachwith the recognition that going forward,
this will increasingly hold an even closer
tie to profitability.”“By working with the Carlyle
ESG and Impact team andBridge House Advisors, wewere able to successfully
position Liberty Tire as aleading ESG platform able todivert tire waste from landfills
and produce higher value
beneficially reusable products.
That positioning was key to our
successful sale of the business.”

190MN+
135MN+

EVAN MIDDLETON

Co-Head of North America for
Carlyle Strategic Partners

2019

2020

While ESG has long been a part of
Carlyle’s investment due diligence andvalue creation over the hold period, its
relevance continued to expand out toother parts of the investment lifecycle—
LTR is an example of how ESG growth
themes are increasingly influencing deal
sourcing, and potential exit viability andpricing as well. Resource efficiency is
increasing investment efficiency.

LTR recycled over 135,000,000 tires in2019 and over 190,000,000 tires in 2020,
which helps preserve landfill capacity.
From 2019 to 2020, the application of
LTR’s Playground Mulch product helped
avoid approximately 41 injuries due tofalls from height.
In 2020, the use or application of LTR’s
products (88% of total volume sold) avoided
almost 900,000 metric tons of CO2-e.

29

NOVOLEX

CLIMATE RESILIENCE,
DIVERSE AND INCLUSIVE TEAMS

Novolex
Novolex is a leading manufacturer of
paper and plastic flexible packaging
products, primarily serving customers
in the food service, grocery, retail, andcommercial end markets.

Sector INDUSTRIAL

Region NORTH AMERICA

Acquisition Date DECEMBER 2016

Lead Fund CARLYLE PARTNERS VI

CARLYLE 2021 IMPACT REVIEW

30

NOVOLEXREPRESENTATION OF WOMEN & ETHNICMINORITIES AMONG TOP 60 LEADERS

40%

20%

2016

2020

REPRESENTATION OF WOMEN & ETHNICMINORITIES AMONG PLANT MANAGERS

27%

9%
2016

CARLYLE 2021 IMPACT REVIEW

2020

W

hile there are a vast numberof ESG issues for companies toconsider, we believe two categories rise
above the rest:
1) Bespoke, financially material ESG
topics for a company’s specific sector
and industry, and;

2) Select issues we see as systemicallyimportant across most companies, such as
diversity and inclusion and climate change.
We profiled Novolex in 2020 for its
commitment to the first category ofissues. The company has focusedheavily on waste and resource
efficiency, which are material issues forthe packaging industry. Novolex has
also focused on two issues we see assystemically important across a broadarray of industries in driving long-termvalue: climate resilience, and diversity
and inclusion.

CLIMATE RESILIENCE
Manufacturers of packaging products areactively seeking ways to mitigate theirenvironmental footprint, predominantly bydecreasing downstream Scope 3 emissions
through wider adoption of products thatcan be recycled or composted and the useof recycled content. However, companies
can also significantly reduce their Scopes
1 and 2 greenhouse gas (GHG) emissions
while driving cost savings by developing a
focused energy procurement strategy.
In 2020, Novolex announced a goal of
reducing its GHG emissions intensity by
20% by 2025. This target positions Novolex
as a leader in the packaging space, andsupports the environmental objectives ofsome of its largest food service customers,
including globally recognized restaurant,
grocery, and retail brands. Novolex’s

emissions strategy was developed by across-functional team, in partnershipwith Insight Sourcing Group, an energy
management consulting firm, with counsel
and strong encouragement from Carlyle’s
Global Investment Resources (GIR) Real
Estate & Energy team.
Novolex has pursued a number of energy
improvement initiatives, including increased
purchasing of competitive renewable power,
and entering into contracts in multiple
states where Novolex operations are based.
To date, Novolex’s energy procurement
improvement efforts have already reduced
emissions intensity by 12%, and resulted incontract-over-contract savings.
To further support its GHG reduction goal,
Novolex is implementing energy efficiency
programs across its manufacturing
footprint. The company is evaluating a
multi-facility LED retrofit program, which
would drive an estimated incremental 3%emissions reduction and contribute to lower
operating costs. Novolex is also leveraging
the audits underway for lighting projects
and will explore upgrades to compressed
air systems, chiller-systems, and motordriven equipment in its facilities that would
result in additional energy savings andcontribute to its emissions goal.
“By prioritizing cost-competitive renewable
power contracts and high return-oninvestment energy efficiency projects,
Novolex is making significant progress
toward its 20% emissions reduction
target, and simultaneously drivingbottom-line impact,” Novolex’s CEO,
Stanley Bikulege explained.

DIVERSITY AND INCLUSION
Novolex has also done substantial work overthe five years since Carlyle’s acquisition
to drive improvements in diversity acrossits workforce of over 10,000 employees,
creating a more inclusive workplace culture.
Novolex started at the Board level in2016 at the time of Carlyle’s acquisition,
when the firm brought on Sandra
Horbach, Carlyle’s Co-Head of US Buyout
and Growth, as a Director, building
on a tradition of diverse leadership.
Carlyle tapped its network of diverse
executives to identify and add Hala
Moddelmog in 2020, an executive withdeep experience in packaging choiceand sustainability, who was previously
CEO and President of Arby’s RestaurantGroup. In 2021, Carol Lowe, Executive
Vice President and Chief Financial
Officer of FLIR Systems, Inc. (NASDAQ:
FLIR), joined the Board at Novolex.
Since 2016, Novolex’s CEO Stanley Bikulege
led the firm to double the numberof senior leaders who are women or
ethnic minorities; more than 40% of theindividuals in Novolex’s top 60 leadership
positions are now diverse. Novolex has
also extended that focus throughout theorganization. Five years ago, three ofNovolex’s 33 plant leaders were ethnic
minorities and zero were women—thecompany has now more than tripledthat percentage, while simultaneously
growing the number of plants. Novolex’s
Human Resources team has been criticalto this effort, broadening its candidate
pools, educating its own recruiting staff,
and pushing its search firms to expand
the number of applicants it considers foropen positions.

virtually in 2021. Helander has continued toadvise the Novolex team, who also recently
brought on an external consultant to help
formalize and further advance its diversity
and inclusion goals and action plan.
Novolex has deftly sorted through thearray of ESG topics confronting companies
to focus on the most important issues to its
business—and in the process, has driven
significant long-term value.

“We see the power of having
diverse leadership at theBoard of Directors level. It
enhances the effectivenessof that Board in terms ofadvising the organization andalso signals to the rest of thecompany that this is important.”
KARA HELANDER

Chief Diversity, Equity, andInclusion Officer at Carlyle

In March 2020, Bikulege had the idea tohost the company’s first-ever International
Women’s Day conference. Wes Bieligk, aNovolex Board member and Partner on
Carlyle’s US Buyout team, asked Kara
Helander to be the keynote at theconference. More than 80 women fromacross Novolex traveled to Cincinnati forthe event, which Novolex plans to continue.
The second annual conference was held

31

PHARMAPACKSENGAGED EMPLOYEES

Pharmapacks
Pharmapacks is a leading e-commerce
enablement platform and retail seller
for brands across major e-commercemarketplaces with proprietary
technology that empowers brands witha complete and cost-effective logistics,
fulfillment, marketing, and sales solution.

Sector
CONSUMER, MEDIA, AND RETAIL
RegionNORTH AMERICA

Acquisition Date
NOVEMBER 2020

Lead Fund CARLYLE PARTNERS VIICARLYLE 2021 IMPACT REVIEW

32

PHARMAPACKSO

f all of the letters in the sustainability
acronym soup, the “S” in ESG—which
stands for “social”—is probably one of
the least well-understood. While diversity,
equity, and inclusion has emerged asa core area of focus, it has historically
been challenging for businesses to sort
through other factors in the “S” bucket
to understand where there are levers forchange, what can be quantified, and how
to tie this work to long-term value creation.

At Carlyle, we use the SASB framework to
guide our diligence and value creation
toward the most material “S” topics fora given investment—from occupational
health and safety, to attrition and turnover,
employee feedback and engagement
mechanisms, compensation, and healthand wellness programs. One topic in
particular has emerged as systemicallyimportant across all of our investments
is human capital. Academic research has
found that 80% of talent-centric portfolio
companies hit their first-year targets andgo on to achieve an average 2.5x returnon initial investment.1
To properly address this critical issue,
Carlyle has invested significantly in a
dedicated Talent and Organization
Performance (TOP) team, which works
with our management teams to maximizeorganizational, operational, and leadershipeffectiveness, including supporting C-Suite
recruitment and build-out. The “S” factor is
no longer unclear—in fact, we believe thatpeople leading our portfolio companies
are one of the most important drivers of
the success of an investment.
We put this into practice in a 2020
investment led by our Consumer, Media,
and Retail sector investment team into
Pharmapacks, a leading e-commercemarketplace retailer and enablement
platform for consumer packaged goods(CPG) brands in the beauty, personalcare, consumer health, and home care

categories. Our investment team believes
Pharmapacks will benefit from highly
attractive industry dynamics including
the rapid growth and penetration of
e-commerce, proliferation of online
marketplaces, and the ever-increasing
importance of a robust omni-channel
presence for CPG brands. Our investment
thesis is to help position Pharmapacks
to execute a multi-dimensional growthstrategy, capturing a robust pipeline of
new CPG and emerging brand partners,
extending into naturally adjacentproduct categories where Pharmapacks
has already seen early success, anddiversifying into additional digitalmarketplaces. We believe people are coreto that strategy.
TOP kicked into gear quickly during
diligence, completing fulsome assessmentsof the Pharmapacks’ management
team and identifying opportunities toenhance capabilities through improved
organizational design and additional
talent. TOP implemented a core part oftheir toolkit—their Connecting Talent

80%of talent-centric portfolio companies
hit their first-year targets

2.5x

average return on initial investment for
talent-centric portfolio companies

to Value Creation methodology—inpartnership with Pharmapacks’ CEO
Andrew Vagenas to provide clarity on theroles that were most important to driving
the business forward. The TOP team works
closely with the CEO and other executives
on key new leadership hires, as well as
to provide coaching to members of the
C-Suite on scaling best practices.
There are both new, important issues thatare constantly emerging for companies
to be aware of and manage, what werefer to as dynamic materiality, and otherissues such as human capital, that havealways been critical to company success.
The TOP team takes a rigorous, datadriven, strategic approach to helping
companies maximize their human capital,and drive lasting value creation in theprocess—enabling businesses to demystify
the “S” at last.

“We are focused on
identifying companies thatare growing significantly
faster than the market andbenefiting from strong seculartailwinds. As a company sittingat the cross section of anumber of attractive trends,
including the massive andrapid expansion of ecommerce,
we have strong convictionin Pharmapacks’ ability toachieve sustainable growth.”
JAY SAMMONSHead of Global Consumer,
Media and Retail at Carlyle

Ogg, S. (2018). “Connecting Talent to Value” CEO works

1

CARLYLE 2021 IMPACT REVIEW

33

PPD

ENGAGED EMPLOYEES

PPDPharmaceutical Product Development, Inc.
(PPD) is a leading global contract researchorganization. The company provides
outsourced clinical trial management
and laboratory services primarily tolarge pharmaceutical and biotechnology
companies, as well as governments, nonprofits, and academic institutions.

SectorHEALTHCARERegionNORTH AMERICA

Acquisition Date MAY 2017

Funds CARLYLE PARTNERS V ANDCARLYLE PARTNERS VI

CARLYLE 2021 IMPACT REVIEW

34

PPD

P

PD, Inc. (Nasdaq: PPD), is a portfolio
company profiled in our 2019 reportfor its innovative work accelerating
patient enrollment and the use of digitaltrials to increase patient access, retention,and engagement in vital medical research,and in our 2020 report for its work
to create a diverse pipeline of nontraditional talent.

PPD is profiled for a third year because
it embodies what continuous ESG
improvement looks like; PPD has routinely
found different dimensions of its businesswhere it can drive profitability that isconvergent with positive outcomes for
its stakeholders. In 2019 to 2020, PPD
partnered with Carlyle’s Healthy Benefit’s
Initiative—a part of Carlyle’s Global
Investment Resources (GIR) team—toreimagine how PPD provides healthcare
to its 11,000+ U.S. employees.
PPD takes an expansive view of employee
wellness, focusing not only on the physical,
but also on the financial, emotional, andsocial wellbeing of its employees. For thisfirst phase of transformation work, PPD
concentrated on delivering benefits andcoverage that their employees value.
PPD’s workforce is around 70% women and
55% millennials, so the company focusedon offering rewards programs tailored
to meet the needs of this importantdemographic while expanding choices
and ensuring market competitiveness.

43%

CARLYLE 2021 IMPACT REVIEWof PPD’s
employees
enrolled in the
new consumerdriven health
plan

91%

of employees
signaling
positively that
PPD is responding
appropriately to
the COVID-19
pandemic$13MN+
realized in plan savings in 2020, a
15% decrease over projected costs

The results of the work were significant.
In 2020, PPD realized more than $13
million in plan savings, or an over 15%
decrease in projected costs. In the firstyear, just over 43% of PPD’s employees
enrolled in the new consumer-driven
health plan, beating initial expectations.
Importantly, based on the updated slateof offerings, PPD estimates that the 2021
per employee healthcare cost will be lessthan the cost in 2018, which is even moresignificant for PPD’s cost structure given

how fast it is growing. PPD added morethan 2,600 new employees over the lastyear, approximately an 11% increase inheadcount.
But PPD didn’t just take costs out of
the system, it also reinvested some ofthose savings in areas like mental healthprograms such as a global employee
assistance program and Headspace,a mobile application that promotes
mindfulness through meditation. PPD
believes these investments drive longer
term value through reduced stress,
increased focus, and improved employee
productivity. In the context of therecent pandemic, employees have beenhighly appreciative of these additional
support services, with 91% of employees
signaling positively that PPD is responding
appropriately to the COVID-19 pandemic.
We believe key to PPD’s success was
designing their reward and healthcare
system with the employee experienceat the center. Scott Allen, Vice Presidentof Total Rewards at PPD, calls it thecompany’s “triple win,” noting that “bypartnering with Carlyle’s Healthy Benefit’s
initiative PPD was able to lower costs for
employees while improving coverage andproviding more choice, and most critically,
driving better health outcomes andsupport for our people.”In the year ahead, PPD has even morework planned by focusing on enhanced
care management, pharmacy benefits
managers, and specialty pharmacy
programs, which PPD estimates will savemillions more dollars in 2021. PPD is also
focused on additional components of
employee wellness, and is also partneringwith Fidelity to offer financial wellbeing
and training programs for employees.
According to research, healthier
employees are better employees and
PPD has a demonstrated track record of
making that happen.

35

SECTION EIGHT

Corporate ESG
DisclosuresCARLYLE 2021 IMPACT REVIEW36

DISCLOSURES

MATERIALITY ASSESSMENTMETHODOLOGYFor this year’s report, we used
the Global Reporting Initiative(GRI) Standards, which provides aninternationally recognized framework tocommunicate our material ESG issues asa firm to our stakeholders with improved
disclosure and transparency.

Additionally, 2021 marks our first yearof reporting according to the World
Economic Forum’s (WEF) ESG metrics.
The WEF metrics were developed in aneffort to identify a core set of material
ESG metrics that can be reported on aconsistent basis across industries, sectors,
and countries. In our 2020 Impact Review,
we developed a materiality assessmentthat we continue to employ. As part ofour initial materiality assessment, we
took into account the expectations
and requirements of our stakeholders,
the knowledge and experience of
our in-house ESG and Impact teammembers, and the Sustainability

Accounting Standards Board (SASB)
Asset Management & Custody Activities
Standards. These inputs helped us identify
the material topics to be covered in thisreport, while also taking into accountthe degree to which Carlyle has control
over each issue. We also included topics
that are important to Carlyle and alignedwith our culture and values (for example,
through enhanced disclosures on diversity,
equity, and inclusion, and climate change).
Details of the material issues we identified
for our firm can be found below.

topics” are the most material to
our organization:
Direct economic value generated
and distributed.

and to provide greater transparency
on our direct environmental impacts, we
believe the following GRI “environmental
topics” are the most material to ourorganization:

Infrastructure investments andservices supported.

Energy consumption within theorganization.

Communication and training aboutanti-corruption policies and procedures.

Energy intensity.
Direct (Scope 1) GHG emissions.

ENVIRONMENTAL
ECONOMIC
Economic issues are core to our business.
As a global investment firm we work
together to create long-term value forour investors, companies, shareholders,people, and communities. Economic
factors have the potential to impact
both our own operations, as well as
our investment portfolio. Stewarding
capital is a key aspect creating both
opportunities and risks. We therefore
believe that the following GRI “economic

STAKEHOLDER ENGAGEMENT

As a global investment firm, the majorityof our direct operations are officebased; hence we are keenly aware that
our environmental impacts as a firm are
relatively small. However, as referenced
in the Climate Resilience section of thisreport and in our Taskforce on ClimateRelated Financial Disclosures report,
Carlyle believes that climate change is
one of the most pressing issues of ourtime, creating unprecedented risks andopportunities for businesses across allindustries. To respond to this challenge

Energy indirect (Scope 2) GHG emissions.
Other indirect (Scope 3) GHG emissions.
Non-compliance with environmental laws
and regulations.

of our employees at every level in ourorganization, as well as our focus on
enhancing diversity and inclusivity, areareas of competitive strength at Carlyle.
We therefore consider that the following
GRI “social topics” are the most material to
our organization:
Benefits provided to fulltime employeesthat are not provided to temporary or
part-time employees.
Programs for upgrading employee skills
and transition assistance programs.
Percentage of employees receiving
regular performance and careerdevelopment reviews.
Diversity of governance bodies andemployees.

SOCIALWe aim to ensure that every colleague
feels that they matter, are valued, andhave access to high quality benefits
and opportunities for learning anddevelopment—so we can all contribute. We
believe that the continued development

Incidents of noncompliance concerningmarketing communications.

CARLYLE’S STAKEHOLDERS AND RESPECTIVE CHANNELS OF ENGAGEMENTThe graphic on the right illustrates
our key stakeholders, as well as
our channels for directly engaging
with each of those stakeholders
on ESG-related matters. Our direct
stakeholders are increasinglyinterested in understanding more
about the broader environmental andsocial impacts of our business and ourportfolio companies, and to see Carlyle
leadership on key global challenges
such as climate change, and diversity
and inclusion. Our progress on these
topics is highlighted in this report.

CARLYLE 2021 IMPACT REVIEWSHAREHOLDERS• Annual Impact Review• GRI reporting and ESG data
• P ublic filings and one-to-one
conversations• Investor Day

BROADER PUBLIC• A nnual Impact Review• Regulatory compliance and audits• Engagement with industry
and issue groups

EMPLOYEES•E SG trainings across functional teams•C entralized ESG resources
on firm intranet•D edicated internal personnel on ESG,
diversity and inclusion, human capital,
cyber security, and more•O
 ngoing mentoring and employee
engagement programs (detailed in GRI
Standard 404-2)•E SG-linked compensation

LIMITED PARTNERS• L P meetings andengagements• U pdates via our LP
Connect portal• E SG research publications• Investor Conferences• Q uarterly and ad-hoc reporting

PORTFOLIO COMPANIES• Annual Sustainability Workshop• ESG data collection and analysis• One-to-one engagement with ESG
team• ESG Action Plan and value
creation support• Quarterly ESG updates via newsletter

37

GENERAL DISCLOSURES

General Disclosures

The table below indicates where information relating to the Global Reporting
Initiative Standards is located in The Carlyle Group’s 2021 Impact Review report, theAnnual Report on Form 10-K for the year ended December 31, 2020, the Form ADV, orthe Proxy Report for the year ended December 31, 2020 filed with the U.S. Securities
and Exchange Commission and/or in other The Carlyle Group materials.

DISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATION

102-1

Name of the organization

The reporting organization shall report the following information:a. Name of the organization.

The Carlyle Group

102-2

Activities, brands, products,
and services

The reporting organization shall report the following information:
a. A description of the organization’s activities.
b. Primary brands, products, and services, including an explanation of any products or services that arebanned in certain markets.

102-3

Location of headquarters

The reporting organization shall report the following information:
a. Location of the organization’s headquarters.

Washington, D.C.

102-4

Location of operations

The reporting organization shall report the following information:a. Number of countries where the organization operates, and the names of countries where it has
significant operations and/or that are relevant to the topics covered in the report.

Please see page 6 in The Carlyle Group’s Form 10-K Report and a list of our global offices here.

102-5

Ownership and legal form

The reporting organization shall report the following information:a. Nature of ownership and legal form.

Please see page 16 in The Carlyle Group’s Form 10-K Report and page 62 of our Proxy Statement.

102-6

Markets served

The reporting organization shall report the following information:a. Markets served, including:i. geographic locations where products and services are offered;ii. sectors served;
iii. types of customers and beneficiaries

Please see pages 6-19 in The Carlyle Group’s Form 10-K Report and page 13 of our Form ADV.

102-7

Scale of the organization

The reporting organization shall report the following information:a. Scale of the organization, including:i. total number of employees;
ii. total number of operations;iii. net sales (for private sector organizations) or net revenues (for public sector organizations);
iv. total capitalization (for private sector organizations) broken down in terms of debt and equity;
v. quantity of products or services provided

Please see pages 16-19 and the audited financial statements included in The Carlyle Group’s Form 10-K Report.

102-8

Information on employees andother workers

The reporting organization shall report the following information:a. Total number of employees by employment contract (permanent and temporary), by gender.
b. Total number of employees by employment contract (permanent and temporary), by region.
c. Total number of employees by employment type (full-time and part-time), by gender.
d. Whether a significant portion of the organization’s activities are performed by workers who are not
employees. If applicable, a description of the nature and scale of work performed by workers who are
not employees.
e. Any significant variations in the numbers reported in Disclosures 102-8-a, 102-8-b, and 102-8-c (such as
seasonal variations in the tourism or agricultural industries).
f. An explanation of how the data have been compiled, including any assumptions made.

Please see information on diversity within our teams here.

102-9

Supply chain

The reporting organization shall report the following information:
a. A description of the organization’s supply chain, including its main elements as they relate to theorganization’s activities, primary brands, products, and services.

As a global investment firm, The Carlyle Group works with a number of third party service providers that
support its day-to-day business operations. In our dealings with third party vendors, The Carlyle Group applies
the principles, values, standards, and norms of behaviour as summarized in our Code of Conduct. Our Form
ADV provides additional information.

CARLYLE 2021 IMPACT REVIEW

Please see pages 6-11 in The Carlyle Group’s Form 10-K Report.

38

GENERAL DISCLOSURESDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATION

102-10Significant changes to theorganization and its supply
chain

The reporting organization shall report the following information:a. Significant changes to the organization’s size, structure, ownership, or supply chain, including:i. Changes in the location of, or changes in, operations, including facility openings, closings, and expansions;ii. Changes in the share capital structure and other capital formation, maintenance, and alteration
operations (for private sector organizations);iii. Changes in the location of suppliers, the structure of the supply chain, or relationships with suppliers,
including selection and termination.

Please see pages 6-10 & 96 in The Carlyle Group’s Form 10-K report.

102-12External initiatives

The reporting organization shall report the following information:
a. A list of externally-developed economic, environmental and social charters, principles, or otherinitiatives to which the organization subscribes, or which it endorses.

The Carlyle Group is currently a member of Businesses for Social Responsibility (BSR), Sustainability Accounting Standards Board (SASB)
Alliance, and Renewable Energy Buyers Association (REBA). In 2020, we became founding members of the One Planet Private Equity Funds
Initiative (OPPEF), with a group of private investors committed to integrating climate change analysis into our investments. In 2021, we
became supporters of the Taskforce on Climate-related Financial Disclosures (TCFD) and published our inaugural TCFD report.

102-13

Membership of associations

The reporting organization shall report the following information:
a. A list of the main memberships of industry or other associations, and national or international
advocacy organizations.

The Carlyle Group is currently a member of or affiliated with the American Investment Council, Alternative Investment Management
Association (AIMA) Global Responsible Investment Committee, Invest Europe, the European Leveraged Finance Association, the EU
Sustainability Regulatory Working Group, the British Private Equity & Venture Capital Association (BVCA), the German Private Equity and
Venture Capital Association (BVK), and the Emerging Markets Private Equity Association (EMPEA). Additionally, we are involved in a numberof working groups organized by our peer private investment firms covering topics such as the evolving regulatory landscape.

102-14

Statement from seniordecision-maker

The reporting organization shall report the following information:
a. A statement from the most senior decision-maker of the organization (such as CEO, chair, or
equivalent senior position) about the relevance of sustainability to the organization andits strategy for addressing sustainability.

Please see page 3 of this report.

102-15Key impacts, risks, andopportunities

The reporting organization shall report the following information:
a. A description of key impacts, risks, and opportunities

Please see pages 28 - 96 in The Carlyle Group’s Form 10-K Report.
As a global investment firm, a key focus of ours is cybersecurity. At The Carlyle Group, information security is everyone’s
responsibility. In an environment in which cyber threats continue to increase in number and sophistication, we recognize that it
takes cooperation and effort from everyone at The Carlyle Group to keep the company, our staff, and our investors safe. To thisend, we foster a security-aware culture that recognizes that our information assets – and their protection – are foundational
elements of our business strategy and vital for engendering stakeholder trust and confidence. The Carlyle Group personnel receive
regular cyber security training and annually certify their compliance with firm policies, such as its Acceptable Use Policy.
To protect the security and privacy of our people, information, and systems, The Carlyle Group invests in layers of protections
to manage cyber risks. Under the leadership of our Chief Information Security Officer (CISO), the firm’s cyber security program(“program”) provides security governance, security awareness and training, security engineering and architecture, security
risk management, vulnerability management, security monitoring, and incident response. Underpinning the program is theimplementation of security best practices, such as the use of multi-factor authentication for remote access; privileged accessmanagement for system administrators; application whitelisting, laptop encryption, and advanced malware defenses on endpoints;
and recurring phishing simulations to improve users’ security acumen and resistance to harm.
The Carlyle Group’s program continues to evolve and grow in response to the ever-changing threat landscape. Over the past year,
for example, new capabilities were emplaced to securely manage contractor access to firm systems using secure virtual machinetechnology; The Carlyle Group personnel benefited from enhanced mobile device management features in support of our remote
workforce; and we improved detection and response capabilities through the build out of our Security Information and EventManagement (or SIEM) and Security Orchestration and Automated Response platforms. Our Security Operations Center (or SOC)
provides Tier 1 coverage 24x7 to ensure we stay on top of any threat within our environment.
To measure the effectiveness of our security program, independent third parties and internal audit perform penetration testing and risk
assessments of our network and systems. Our information security steering committee ensures that our cybersecurity initiatives are inalignment with The The Carlyle Group Group’s strategic priorities; and our CISO provides regular reporting to our Board of Directors on
the program’s status. The The Carlyle Group Group is also a member of the Financial Services Information Sharing and Analysis Center.
Complementing our cyber security program, we continue to focus on strengthening our processes in data privacy through our
Data Protection & Privacy Committee and maintain physical security controls within our offices and data centers so that only
authorized individuals have access to The Carlyle Group assets. The Carlyle Group’s Privacy Notice as well as helpful information forrecognizing, avoiding, and reporting upon fraudulent activity is available here.

CARLYLE 2021 IMPACT REVIEW

39

GENERAL DISCLOSURESDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATION

102-16

Values, principles, standards,
and norms of behaviour

The reporting organization shall report the following information:
a. A description of the organization’s values, principles, standards, and norms of behaviour.

The Carlyle Group Inc.’ s Global Code of Conduct is available to all employees and all Fund Investors here. Additionally, pleasesee our Guidelines for Responsible Investment here.

102-17

Mechanisms for advice andconcerns about ethics

The reporting organization shall report the following information:
a. A description of internal and external mechanisms for:i. seeking advice about ethical and lawful behaviour, and organizational integrity;
ii. reporting concerns about unethical or unlawful behaviour, and organizational integrity.

The mechanisms for advice and reporting concerns are summarized in our Code of Conduct and our Process for Reporting ofConcerns Regarding Accounting and Other Matters. Our whistleblower policy is published internally for employees to review.
This policy is included as part of training during onboarding. Additionally, an Ethics and Compliance hotline is available to all
employees, as noted on page 4 of our Proxy Statement The requirements for reporting of known or suspected violations of The
Carlyle Group’s Code of Conduct or illegal or unethical behavior are detailed below.
Reporting of Known or Suspected Violations or Illegal or Unethical Behavior
Employees must either (1) promptly contact The Carlyle Group’s Office of the General Counsel or Chief Compliance Officer or(2) submit an anonymous report using one of the alternative reporting options outlined in The Carlyle Group Whistleblower
Policy if they are concerned that a Covered Party may have violated this Code or that other illegal or unethical conduct by a
Covered Party has occurred or may occur. The Carlyle Group will take measures to protect the confidentiality of any report
made, subject to applicable law, regulation or legal proceedings. The Carlyle Group will not permit or tolerate retaliation of
any kind by or on behalf of The Carlyle Group and its personnel against employees who make good faith reports or complaints
regarding violations of this Code or other illegal or unethical behavior.

102-18Governance structure

The reporting organization shall report the following information:a. Governance structure of the organization, including committees of the highest governance body.
b. Committees responsible for decision-making on economic, environmental, and social topics.

Please see page 25 in The Carlyle Group’s Form 10-K Report. The Carlyle Group’s Global Head of Impact reports directly to thefirm’s Chief Operating Officer & The Carlyle Group’s Board of Directors. The Carlyle Group’s Board of Directors maintain oversightfor ESG and impact activities. We have designated an independent board lead on ESG, Janet Hil.
During 2020, the Board of Directors held 9 meetings, the Audit Committee held 9 meetings, the Compensation Committee held 7
meetings and the Nominating and Corporate Governance Committee held 3 meetings.

Delegating authority

The reporting organization shall report the following information:a. Process for delegating authority for economic, environmental, and social topics from the highest
governance body to senior executives and other employees.

The Carlyle Group’s Board of Directors receives information about material ESG issues for the firm. The Board of Directors are
publicly listed here. Janet Hill is The Carlyle Group’s Board lead for ESG.

Executive-level responsibility
for economic, environmental,
and social topics

The reporting organization shall report the following information:a. Whether the organization has appointed an executive-level position or positions with responsibility foreconomic, environmental, and social topics.
b. Whether post holders report directly to the highest governance body

The Carlyle Group’s Board of Directors oversee the Firm’s ESG and impact strategy. The Board of Directors are publicly listed here.
Janet Hill is The Carlyle Group’s Board lead for ESG.

102-21

Consulting stakeholders on
economic, environmental, andsocial topics

The reporting organization shall report the following information:a. Processes for consultation between stakeholders and the highest governance body on economic,
environmental, and social topics.
b. If consultation is delegated, describe to whom it is delegated and how the resulting feedback isprovided to the highest governance body.

The Carlyle Group’s Board of Directors receives information about material ESG issues for the firm. The Board of Directors are
publicly listed here. Janet Hill is The Carlyle Group’s Board lead for ESG. The Carlyle Group’s Global Head of Impact, who oversees
the Global ESG team reports directly to the firm’s Chief Operating Officer & The Carlyle Group’s Board of Directors. ESG topics arecovered in at least one board meeting annually, with written updates on ESG provided to the Board at least bi-monthly.

102-22Composition of the highest
governance body and its
committees

The reporting organization shall report the following information:a. Composition of the highest governance body and its committees by:i. executive or non-executive;ii. independence;iii. tenure on the governance body;iv. number of each individual’s other significant positions and commitments, and thenature of the commitments;
v. gender;
vi. membership of under-represented social groups;vii. competencies relating to economic, environmental, and social topics;viii. stakeholder representation.

102-19102-20

The Carlyle Group’s Global Head of Impact reports directly to the firm’s Chief Operating Officer & The Carlyle Group’s Board of
Directors. ESG topics are covered in at least one board meeting annually, with written updates on ESG provided to the Board atleast bi-monthly. Additionally, The Carlyle Group’s ESG and Impact team provides regular updates on the firm’s ESG and impact
work to Kewsong Lee (Chief Executive Officer). There is a firmwide ESG Review Committee comprised of the Chief Operating
Officer, the Chief Risk Officer, the Global General Counsel for Investments, and the Global Head of Impact.

The Carlyle Group’s Global Head of Impact who oversees the Global ESG team reports directly to the firm’s Chief Operating
Officer & The Carlyle Group’s Board of Directors. ESG topics are covered in at least one board meetings annually, with written
updates on ESG provided to the Board at least bi-monthly.

The Carlyle Group’s Board of Directors oversees our business and affairs and consists of 12 directors. Currently, half of the directors
on our Board are independent. Over time, we intend to transition to a majority independent Board. Two of our founding partners,
David M. Rubenstein and William E. Conway, Jr., currently serve as non-executive Co-Chairmen of the Board. Our Chief Executive
Officer, Kewsong Lee, also serves as a Board member. Janet Hill serves as our Board lead for ESG.
Lawton Fitt serves as our Lead Independent Director. She presides at executive sessions of the independent directors andengages with them between Board and Committee meetings. As our Lead Independent Director, Ms. Fitt, works closely with theindependent directors to provide essential objective oversight of our business. She facilitates communications with the Board, theidentification of matters for consideration by the Board and management, and the formulation of appropriate guidance to besuggested by the independent directors. The Carlyle Group’s Board of Directors is comprised of 30%+ diverse directors.
Additional information on our Board of Directors can be found on P. 7-19 of our Proxy Statement.
The Carlyle Group representatives from across the organization, including those who sit on the highest governance body, routinely
talk to shareholders, LPs, NGOs and government on economic, environmental and social topics.

CARLYLE 2021 IMPACT REVIEW

40

GENERAL DISCLOSURESDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATION

102-23Chair of the highest
governance body

The reporting organization shall report the following information:a. Whether the chair of the highest governance body is also an executive officer in the organization.
b. If the chair is also an executive officer, describe his or her function within the organization’s
management and the reasons for this arrangement.

The Carlyle Group’s Board of Directors oversees our business and affairs and consists of 12 directors. Currently, half of the directors
on our Board are independent. Over time, we intend to transition to a majority independent Board. Two of our founding partners,
David M. Rubenstein and William E. Conway, Jr., currently serve as non-executive Co-Chairmen of the Board. Our Chief Executive
Officer, Kewsong Lee, also serves as a Board member. Lawton Fitt serves as our Lead Independent Director. She presides at
executive sessions of the independent directors and engages with them between Board and Committee meetings. As our Lead
Independent Director, Ms. Fitt, works closely with the independent directors to provide essential objective oversight of our business.
She facilitates communications with the Board, the identification of matters for consideration by the Board and management,
and the formulation of appropriate guidance to be suggested by the independent directors. We believe this leadership structure
for the Board has served us well. Our CEO can utilize the Board as a resource for insights and advice, and under this leadership
structure he is able to focus his efforts on operating the business and leading the management team. We benefit from ourfounders’ extensive knowledge and experience in the alternative asset investment management industry, and the continuity
they have provided as The Carlyle Group transitioned from a private partnership to a public company. At the same time, we
benefit from the perspectives of a diverse group of independent directors with a strong Lead Independent Director. Additional
information on our Board of Directors can be found on P. 7 - 19 of our Proxy Statement.

102-24

Nominating and selecting thehighest governance body

The reporting organization shall report the following information:a. Nomination and selection processes for the highest governance body and its committees.
b. Criteria used for nominating and selecting highest governance body members, including whether and how:i. stakeholders (including shareholders) are involved;
ii. diversity is considered;iii. independence is considered;iv. expertise and experience relating to economic, environmental, and social topics are considered.

Please see pages 9-15 of The Carlyle Group’s 2021 Proxy Statement.
The Nominating and Corporate Governance committe considers ESG as part of its analysis of potential candidates.

102-25

Conflicts of interest

The reporting organization shall report the following information:a. Processes for the highest governance body to ensure conflicts of interest are avoided
and managed.
b. Whether conflicts of interest are disclosed to stakeholders, including, as a minimum:
i. Cross-board membership;
ii. Cross-shareholding with suppliers and other stakeholders;iii. Existence of controlling shareholder;iv. Related party disclosures.

The Carlyle Group is a publicly traded company which requires a high standard in terms of identifying, mitigating and disclosing
conflicts of interest. In addition, the funds we manage are advised by investment advisers registered with the US Securities andExchange Commission as registered investment advisers (RIAs). As such, these RIAs are also subject to high standards in terms ofidentifying, mitigating and disclosing conflicts of interest.

102-26

Role of highest governancebody in setting purpose,values, and strategy

The reporting organization shall report the following information:
a. Highest governance body’s and senior executives’ roles in the development, approval, and updatingof the organization’s purpose, value or mission statements, strategies, policies, and goals related toeconomic, environmental, and social topics.

The Carlyle Group’s Board of Directors and its senior executives, including CEO Kewsong Lee, are responsible for the approvalof the organization’s purpose, value or mission statements, strategies, policies, and goals related to economic, environmental,
and social topics. The Carlyle Group developed its Guidelines for Responsible Investment in 2008, which the firm retains to thisday. These guidelines were approved by The Carlyle Group’s Board of Directors, are used in in our investment decision-making,monitoring, and post-investment activity. Our Guidelines can be found on our website here.
The Carlyle Group’s dedicated ESG team is responsible for developing and updating The Carlyle Group’s approach to ESG issues, in conjunction
with senior executives across the firm. Any material updates or changes to The Carlyle Group’s approach to ESG are reviewed and approvedby The Carlyle Group’s CEO, and in some cases, The Carlyle Group’s Board of Directors. The Carlyle Group’s Board of Directors is responsible forthe development, approval, and updating of the organization’s purpose, value or mission statements, strategies, policies, and goals related toeconomic, environmental, and social topics. The Board of Directors has formal oversight for the firm’s approach to ESG. It receives an overview ofthe firm’s approach to ESG issues at least on an annual basis and annually reviews and approves the firm’s ESG report.

102-27

Collective knowledge ofhighest governance bodyCARLYLE 2021 IMPACT REVIEWThe reporting organization shall report the following information:a. Measures taken to develop and enhance the highest governance body’s collective knowledge of
economic, environmental, and social topics.

The Carlyle Group’s Board of Directors receives updates on material issues for the firm and education on emerging topics, including
on certain economic, environmental, and social issues such as diversity and inclusion, cybersecurity, and more.
Carlyle’s Board of Directors receives an overview of the firm’s approach to ESG issues at least on an annual basis. This overview
includes information on how Carlyle is actively managing the most material ESG issues for itself as a corporation, as well as how Carlyle
integrates ESG across its investment processes in order to drive long-term, sustainable value in its investments. The Carlyle Group
Board of Directors also receives education on emerging ESG issues of important to the firm on at least an annual basis. The Boardof Directors annually reviews and approves the firm’s ESG report and has formal oversight for the firm’s approach to ESG. In somecases, we include The Carlyle Group’s Board of Directors in ESG events or conferences, further enhancing the highest governancebody’s knowledge of economic, environmental, and social topics. For example, we hosted our annual portfolio company sustainability
workshop, welcoming 61 portfolio company attendees for a day of discussion ESG issues. Our Board lead for ESG, Janet Hill, wasfeatured in a mainstage presentation regard ESG board competencies, and attended additional sessions throughout the day.

41

GENERAL DISCLOSURESDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATION

102-28

Evaluating the highest
governance body’s performance

The reporting organization shall report the following information:a. Processes for evaluating the highest governance body’s performance with respect to governance ofeconomic, environmental, and social topics.
b. Whether such evaluation is independent or not, and its frequency.
c. Whether such evaluation is a self-assessment.
d. Actions taken in response to evaluation of the highest governance body’s performance with respect
to governance of economic, environmental, and social topics, including, as a minimum,changes in membership and organizational practice.

Each year The Carlyle Group Board of Directors and its Committees conduct an assessment of its performance against theobjectives and goals that they set for themselves as well as the requirements of their charter documents. As part of thisassessment, the Board considered its strengths and areas for improvement. Among other topics, the Board considers whether it
has the right mix of skills and experience on the Board.
The Nominating and Corporate Governance committee considers ESG as part of its analysis of potential candidates.
While ESG factors have been a part of compensation decisions previously, we have formally tied ESG to compensation. The
Carlyle Group’s Compensation Committee has established that diversity, equity, and inclusion will be one of the factors that will
inform a portion of CEO compensation, as well as a factor for all employees. Year-end bonuses for all employees across all levels
will be set according to performance, which includes meeting previously-set individual diversity, equity, and inclusion objectives.
Linking compensation to DEI metrics allows us to further embed inclusive leadership and management into our organization, andthe foundation of great leaders. We are also launching a new The Carlyle Group DEI Incentive Award Program. Specifically, thisprogram will reward a select group of employees who have gone above and beyond to contribute to DEI progress. Formally linking
incentive awards to progress on the firm’s DEI efforts underscores that these components are key to honing our competitive edge.
This strategy is designed to incent inclusive behavior, drive progress on key metrics, and align with our strategy and values while
prioritizing accountability from all employees of the firm.

102-29Identifying and managing
economic, environmental, andsocial impacts

The reporting organization shall report the following information:
a. Highest governance body’s role in identifying and managing economic, environmental, and social
topics and their impacts, risks, and opportunities – including its role in the implementation ofdue diligence processes.
b. Whether stakeholder consultation is used to support the highest governance body’s identification andmanagement of economic, environmental, and social topics and their impacts,
risks, and opportunities.

The Carlyle Group’s Board of Directors oversees The Carlyle Group’s ESG and impact strategy. At least annually, the ESG teampresents developments in ESG integration and impact strategy and process to The Carlyle Group’s Board of Directors.

102-30Effectiveness of risk
management processes

The reporting organization shall report the following information:
a. Highest governance body’s role in reviewing the effectiveness of the organization’s risk management
processes for economic, environmental, and social topics.

We have formally tied ESG to compensation. The Carlyle Group’s Compensation Committee has established that diversity, equity,and inclusion will be one of the factors that will inform a portion of CEO compensation. Formally linking incentive awards toprogress on the firm’s DEI efforts underscores that these components are key to honing our competitive edge. This strategy isdesigned to incent inclusive behavior, drive progress on key metrics, and align with our strategy and values.

102-31

Review of economic,
environmental, and social topics

The reporting organization shall report the following information:
a. Frequency of the highest governance body’s review of economic, environmental, and social topics andtheir impacts, risks, and opportunities.

The Carlyle Group has reported on economic, environmental and social topics since 2010 on an annual basis. Please see ourhistorical ESG reporting archive here.

102-32Highest governance body’s rolein sustainability reporting

The reporting organization shall report the following information:a. The highest committee or position that formally reviews and approves the organization’s sustainability
report and ensures that all material topics are covered.

The Carlyle Group’s sustainability report, titled The Carlyle Group’s 2021 Impact Review, is reviewed and approved by multiple
senior stakeholders in the firm. The report is ultimately reviewed and approved by The Carlyle Group’s CEO, Kewsong Lee, who isalso a member of The Carlyle Group’s Board of Directors. The Carlyle Group’s Board of Directors ESG lead annually reviews thefirm’s ESG report. The Board has formal oversight for the firm’s approach to ESG.

102-33

Communicating critical concerns

The reporting organization shall report the following information:a. Process for communicating critical concerns to the highest governance body

Any person may report directly to the Audit Committee and/or the management by contacting the General Counsel in relation to
any accounting allegation, legal allegation or to report a retaliatory act by addressing such report in writing. The Carlyle Group
has a Ethics and Compliance hotline that is available to all employees and other processes for submitting concerns anonymously.
The General Counsel reports each meeting to the Audit Committee of the Board of Directors on any whistleblower activity.
Additionally, an Ethics and Compliance hotline is available to all employees, as noted on page 4 of our Proxy Statement.

102-35

Remuneration policies

CARLYLE 2021 IMPACT REVIEWThe reporting organization shall report the following information:
a. Remuneration policies for the highest governance body and senior executives for the following typesof remuneration:i. Fixed pay and variable pay, including performance-based pay, equity-based pay, bonuses, anddeferred or vested shares;
ii. Sign-on bonuses or recruitment incentive payments;
iii. Termination payments;
iv. Clawbacks;
v. Retirement benefits, including the difference between benefit schemes and contribution rates for thehighest governance body, senior executives, and all other employees.
b. How performance criteria in the remuneration policies relate to the highest governance body’s andsenior executives’ objectives for economic, environmental, and social topics.

Please view page 25-56 of The Carlyle Group’s Proxy Statement for additional information.
Please see GRI disclosure 102-28 in this document for information on how ESG impacts remuneration decisions.

42GENERAL DISCLOSURESDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATION

102-36

Process for determining
remuneration

The reporting organization shall report the following information:a. Process for determining remuneration.
b. Whether remuneration consultants are involved in determining remuneration and whether
they are independent of management.
c. Any other relationships that the remuneration consultants have with the organization

The Carlyle Group believes quality compensation and incentive programs are critical to hiring and retaining highly qualified
individuals. Please see GRI disclosure 102-28 in this document for information on how ESG impacts remuneration decisions.
Base pay is provided to each salaried employee in the form of a base salary and to each hourly employee in the form ofcompensation per hour to compensate employees for satisfying the daily expectations of their role. We strive to provide base pay
to our employees that is competitive with the local marketplace for our industry and so we may attract and retain top talent.
The annual discretionary performance-based cash bonus program is a significant component of our compensation program. The
plan is based on the Firm, funds, and departments achieving expected performance results in order to fully fund the bonus awards.
The plan provides for direct alignment with the Firm’s financial performance and expectations. Please see pages in 25-56 in The
Carlyle Group’s Proxy Report for information regarding The Carlyle Group’s executive compensation, the role of The Carlyle Group’s
compensation committee of the Board of Directors and The Carlyle Group’s compensation consultant.
To further align the interests of our employees with our shareholders and to cultivate a strong sense of ownership and commitment
to our firm, certain employees also are eligible to receive awards of restricted stock units or participate in our other long-term
incentive programs. The success of our business is fundamentally connected to the well-being of our people. We are committed
to their health, safety and wellness and seek to provide benefits that are locally relevant for our global employees. Following thestart of the COVID-19 pandemic, during 2020, we offered enhanced support to our employees by partnering with external wellness
providers to host dedicated sessions on mental and physical well-being.

102-37

Stakeholders’ involvement inremuneration

The reporting organization shall report the following information:a. How stakeholders’ views are sought and taken into account regarding remuneration.
b. If applicable, the results of votes on remuneration policies and proposals.

Please see pages 6-10 of The Carlyle Group’s Form 10-K Report.

102-38Annual total compensation ratio

The reporting organization shall report the following information:a. Ratio of the annual total compensation for the organization’s highest-paid individual in each country ofsignificant operations to the median annual total compensation for all employees (excluding the highest-paid
individual) in the same country.

For 2020, the annual total compensation for our principal executive officer was $16,384,203 and our median employee’s annual
total compensation was $248,521. Based on the CEO’s annual total compensation, our CEO Pay Ratio for 2020 was 65.9:1.

102-40

List of stakeholder groups

The reporting organization shall report the following information:
a. A list of stakeholder groups engaged by the organization.

Please see the materiality assessment methodology on page 37 of this document.

102-42

Identifying and selecting
stakeholders

The reporting organization shall report the following information:a. The basis for identifying and selecting stakeholders with whom to engage

Please see the materiality assessment methodology on page 37 of this document.

102-43

Approach to stakeholder
engagement

The reporting organization shall report the following information:a. The organization’s approach to stakeholder engagement, including frequency of engagement by type andby stakeholder group, and an indication of whether any of the engagement wasundertaken specifically as part of the report preparation process.

Please see the materiality assessment methodology on page 37 of this document.

102-44

Key topics and concerns raised

The reporting organization shall report the following information:
a. Key topics and concerns that have been raised through stakeholder engagement, including:i. how the organization has responded to those key topics and concerns, including through its reporting;ii. the stakeholder groups that raised each of the key topics and concerns.

Please see the materiality assessment methodology on page 37 of this document.

102-45

Entities included in the
consolidated financial statements

The reporting organization shall report the following information:
a. A list of all entities included in the organization’s consolidated financial statements or equivalent documents.
b. Whether any entity included in the organization’s consolidated financial statements or equivalent documents
is not covered by the report.

Please see pages 154-163 in The Carlyle Group’s Form 10-K Report.

102-46

Defining report content and topic
Boundaries

The reporting organization shall report the following information:a. An explanation of the process for defining the report content and the topic Boundaries.
b. An explanation of how the organization has implemented the Reporting Principles for defining report content.

Please see the materiality assessment methodology on page 37 of this document.

102-47

List of material topics

The reporting organization shall report the following information:
a. A list of the material topics identified in the process for defining report content

Please see the materiality assessment methodology on page 37 of this document.

102-48

Restatements of information

The reporting organization shall report the following information:a. The effect of any restatements of information given in previous reports, and the reasons for such restatements

No significant restatements of our Corporate Sustainability reporting compared to the previous reporting period.

CARLYLE 2021 IMPACT REVIEW

43

GENERAL DISCLOSURESDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATION

102-49Changes in reporting

The reporting organization shall report the following information:a. Significant changes from previous reporting periods in the list of material topics and topic Boundaries

The Carlyle Group’s sustainability reports have previously considered GRI and SASB standards, but this year wehave included reporting against the World Economic Forum’s (WEF) proposed metrics as well. Please see additional
information on the WEF metrics here.

102-50

Reporting period

The reporting organization shall report the following information:
a. Reporting period for the information provided.

January 2020-December 2020

102-51

Date of most recent report

The reporting organization shall report the following information:
a. If applicable, the date of the most recent previous report.

June 2020

102-52

Reporting cycle

The reporting organization shall report the following information:
a. Reporting cycle.

The Carlyle Group has produced an annual sustainability report since 2010. Previous reports can be found here.

102-53

Contact point for questions
regarding the report

The reporting organization shall report the following information:a. The contact point for questions regarding the report or its contents.

Meg Starr at Megan.Starr@Carlyle.com

102-54Claims of reporting in accordancewith the GRI Standards

The reporting organization shall report the following information:a. The claim made by the organization, if it has prepared a report in accordance with the GRI Standards, either:i. ‘This report has been prepared in accordance with the GRI Standards: Core option’;ii. ‘This report has been prepared in accordance with the GRI Standards: Comprehensive option’.

This report has been prepared in accordance with the GRI Standards: Core option.

102-55

GRI content index

The reporting organization shall report the following information:a. The GRI content index, which specifies each of the GRI Standards used and lists all disclosures included in the report.
b. For each disclosure, the content index shall include:i. the number of the disclosure (for disclosures covered by the GRI Standards);
ii. the page number(s) or URL(s) where the information can be found, either within the report or in otherpublished materials;
iii. if applicable, and where permitted, the reason(s) for omission when a required disclosure cannot be made.

The GRI content index (this document) is in accordance with the GRI Standards.

102-56External assurance

The reporting organization shall report the following information:
a. A description of the organization’s policy and current practice with regard to seeking external assurance forthe report.
b. If the report has been externally assured:i. A reference to the external assurance report, statements, or opinions. If not included in the assurance reportaccompanying the sustainability report, a description of what has and what has not been assured and on
what basis, including the assurance standards used, the level of assurance obtained, and any limitations of theassurance process;ii. The relationship between the organization and the assurance provider;iii. Whether and how the highest governance body or senior executives are involved in seeking external
assurance for the organization’s sustainability report.

At this time, The Carlyle Group does not seek external assurance for its Impact Review report. The document is reviewed by The
Carlyle Group’s CEO, COO, CRO, Legal, Compliance, and our Global Head of Impact. The Carlyle Group’s consolidated financial
statements are externally audited by Ernst and Young LLP.

CARLYLE 2021 IMPACT REVIEW

44

ECONOMIC DISCLOSURES

Economic Disclosures

The table below lists the material economic topics identified during The Carlyle Group’s materiality assessment
process (see Impact Review, pg. 37). All topics identified pertain directly to The Carlyle Group.

GRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATIONGRI 201

Economic Performance

201-1

Direct economic value
generated and distributed

The reporting organization shall report the following information:
a. Direct economic value generated and distributed (EVG&D) on an accruals basis, including the basic
components for the organization’s global operations as listed below. If data are presented on a cash
basis, report the justification for this decision in addition to reporting the following basic components:
i. Direct economic value generated: revenues;
ii. Economic value distributed: operating costs, employee wages and benefits, payments to providersof capital, payments to government by country, and community investments;
iii. Economic value retained: ‘direct economic value generated’ less ‘economic value distributed’.
b. Where significant, report EVG&D separately at country, regional, or market levels, and the criteria
used for defining significance.

Please see pages 154-163 in The Carlyle Group’s Form 10-K Report.

GRI 201

Economic Performance

201-2

Financial implications andother risks and opportunities
due to climate change

The reporting organization shall report the following information:a. Risks and opportunities posed by climate change that have the potential to generate substantive
changes in operations, revenue, or expenditure, including:i. a description of the risk or opportunity and its classification as either physical, regulatory, or other;ii. a description of the impact associated with the risk or opportunity;iii. the financial implications of the risk or opportunity before action is taken;
iv. the methods used to manage the risk or opportunity;v. the costs of actions taken to manage the risk or opportunity.

We view climate change as systemically important across our portfolio, and are committed
to understanding and addressing material climate risks and opportunities. We were one of
the first major private equity firms to publish a Taskforce on Climate-related Financial
Disclosures report which details our approach to navigating climate risks and opportunities.
Highlights of progress from the past year include:- Completed bottom-up carbon footprinting of our majority-owned companies in our three
primary corporate private equity strategies (US, Europe, and Asia)- Hosted a climate scenario workshop to model the potential impacts on The Carlyle Group’s
investment portfolio under different climate scenarios, led by Business for Social Responsibility (BSR)- Integrated diligence of physical climate risk into select investments to better understand therisk of sea level rise, extreme weather events and insurability of assets- Completed our fourth year of carbon neutrality in our operations

GRI 203

Indirect Economic Impacts

203-1

Infrastructure investments
and services supported

The reporting organization shall report the following information:
a. Extent of development of significant infrastructure investments and services supported.
b. Current or expected impacts on communities and local economies, including positive and negative
impacts where relevant.
c. Whether these investments and services are commercial, in-kind, or pro bono engagements.

Please see The Carlyle Group’s infrastructure website.

GRI 205

Anti-corruption

205-2

Communication and training
about anti-corruption policies
and procedures

The reporting organization shall report the following information:a. Total number and percentage of governance body members that the organization’ anti-corruption
policies and procedures have been communicated to, broken down by region.
b. Total number and percentage of employees that the organization’s anti-corruption policies andprocedures have been communicated to, broken down by employee category and region.
c. Total number and percentage of business partners that the organization’s anti-corruption policies
and procedures have been communicated to, broken down by type of business partner and region.
Describe if the organization’s anti-corruption policies and procedures have been communicated toany other persons or organizations.
d. Total number and percentage of governance body members that have received training on anticorruption, broken down by region.
e. Total number and percentage of employees that have received training on anti-corruption, broken
down by employee category and region.

Our Anti-Bribery & Corruption (ABC) Policy is shared with all employees globally. Additionally,
training is provided to all The Carlyle Group employees globally on ABC. An internal audit
function also carries out periodic monitoring activity. The Carlyle Group does not routinely
share our ABC Policy with our business partners. However, we do require representation andcertificates on their own compliance with ABC requirements in our contracts.

CARLYLE 2021 IMPACT REVIEW45

ENVIRONMENTALDISCLOSURES

Environmental Disclosures

The table below lists the material environmental topics identified during The Carlyle Group’s materiality
assessment process (see Impact Review, pg. 37). All topics identified pertain directly to The Carlyle Group.

GRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATIONGRI 302

Energy302-1

Energy consumption within
the organization

The reporting organization shall report the following information:a. Total fuel consumption within the organization from non-renewable sources, injoules or multiples, and including fuel types used.
b. Total fuel consumption within the organization from renewable sources, in joules
or multiples, and including fuel types used.
c. In joules, watt-hours or multiples, the total:
i. electricity consumption
ii. heating consumptioniii. cooling consumption
iv. steam consumption
d. In joules, watt-hours or multiples, the total:
i. electricity soldii. heating soldiii. cooling soldiv. steam solde. Total energy consumption within the organization, in joules or multiples.
f. Standards, methodologies, assumptions, and/or calculation tools used.
g. Source of the conversion factors used(a, b) The Carlyle Group has no direct fuel consumption as a part of its operations(c) Total estimated electricity & heating consumption: 11,392 MWH. Cooling not separated; zerosteam consumption.
(d) Zero energy sold(e) 12,388 MWH(f,g) Sources: US DoE “”eGrid””, International Energy Agency, US EPA. Procedures align with WRI
GHG Protocol, verified by Apex Companies (formerly known as Bureau Veritas). We offset ouremissions by purchasing truck stop electrification and waste-to-energy landfill projects in the
US through The Carbon Fund, which were verified by the American Carbon Registry, as well as
agroforestry projects in Laos through Varo, a The Carlyle Group portfolio company.
We undertake a number of initiatives to reduce our overall environmental footprint. Pleasesee details here.
Additionally, the landlord of our New York City office space, SL Green publishes an annual
sustainability report.

GRI 302

Energy302-3

Energy intensity

The reporting organization shall report the following information:a. Energy intensity ratio for the organization.
b. Organization-specific metric (the denominator) chosen to calculate the ratio.
c. Types of energy included in the intensity ratio; whether fuel, electricity, heating,cooling, steam, or all.
d. Whether the ratio uses energy consumption within the organization, outside ofit, or both.

(a) 6.81 MWH per employee of energy use. 3.6 MT of CO2e per employee of GHG emissions.
(b) Employee headcount(c) All energy types included(d) Energy use refers specifically to Scope 2, while the GHG footprint includes all scopes

GRI 303

Water and Effluents

303-5

Water consumption

The reporting organization shall report the following information:a. Total water consumption from all areas in megaliters.
b. Total water consumption from all areas with water stress in megaliters.
c. Change in water storage in megaliters, if water storage has been identified ashaving a significant water-related impact.
d. Any contextual information necessary to understand how the data have been
compiled, such as any standards, methodologies, and assumptions used, including
whether the information is calculated, estimated, modelled, or sourced from direct
measurements, and the approach taken for this, such as the use of any sectorspecific factors

We believe our water consumption is de minimis as we lease our ~30 office spaces - themajority of our buildings are outfitted with water efficiency measures such as low-flow toilets.
As tenants, we are unable to obtain the data to undertake a comprehensive analysis of ourwater consumption across our global offices.

GRI 305

Emissions305-1

Direct (Scope 1) GHG emissions

The reporting organization shall report the following information:a. Gross direct (Scope 1) GHG emissions in metric tons of CO2 equivalent.
b. Gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all.
c. Biogenic CO2 emissions in metric tons of CO2 equivalent.
d. Base year for the calculation, if applicable, including:i. the rationale for choosing it;ii. emissions in the base year;iii. the context for any significant changes in emissions that triggered
recalculations of base year emissions.
e. Source of the emission factors and the global warming potential (GWP) rates
used, or a reference to the GWP source.
f. Consolidation approach for emissions; whether equity share, financial control, or
operational control.
g. Standards, methodologies, assumptions, and/or calculation tools used.

(a) Zero material Scope 1 emissionsCARLYLE 2021 IMPACT REVIEW46

ENVIRONMENTALDISCLOSURESGRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATIONGRI 305

Emissions

305-2

Energy indirect (Scope 2) GHG
emissions

The reporting organization shall report the following information:a. Gross location-based energy indirect (Scope 2) GHG emissions in metric tons of CO2
equivalent.
b. If applicable, gross market-based energy indirect (Scope 2) GHG emissions in metric tonsof CO2 equivalent.
c. If available, the gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs,
SF6, NF3, or all.
d. Base year for the calculation, if applicable, including:i. the rationale for choosing it;ii. emissions in the base year;iii. the context for any significant changes in emissions that triggered recalculations ofbase year emissions.
e. Source of the emission factors and the global warming potential (GWP) rates used, or areference to the GWP source.
f. Consolidation approach for emissions; whether equity share, financial control, or
operational control.
g. Standards, methodologies, assumptions, and/or calculation tools used(a) 4,999 MT of CO2e(b) N/A(c) All included(d) First year of GHG accounting was 2017. Current reporting covers the 2020 emissions year.
(e) As above, sources include US DoE eGrid, International Energy Agency (IEA) emissions
factors(f) Financial control(g) WRI GHG Protocol. Verified by Apex Companies.

GRI 305

Emissions305-3

Other indirect (Scope 3) GHG
emissions

The reporting organization shall report the following information:a. Gross other indirect (Scope 3) GHG emissions in metric tons of CO2 equivalent.
b. If available, the gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs,
SF6, NF3, or all.
c. Biogenic CO2 emissions in metric tons of CO2 equivalent.
d. Other indirect (Scope 3) GHG emissions categories and activities included in thecalculation.
e. Base year for the calculation, if applicable, including:i. the rationale for choosing it;ii. emissions in the base year;iii. the context for any significant changes in emissions that triggered recalculations ofbase year emissions.
f. Source of the emission factors and the global warming potential (GWP) rates used, or areference to the GWP source.
g. Standards, methodologies, assumptions, and/or calculation tools used.

(a) 1,553 MT of CO2e(b) N/A(c) All included(d) First year of GHG accounting was 2017. Current reporting covers the 2019 emissions year.
No methodological changes in that time. Due to the COVID-19 pandemic and enforced workfrom home, we have excluded employee commuting from our footprint for 2020. We will
resume the inclusion of commuting as we transition back into the office but anticipate that thedata for 2020 and 2021 may not be comparable to prior years. Our Scope 3 emissions are
significantly lower in 2020 due to reduced business travel.
(e) As above, sources include US DoE eGrid, International Energy Agency (IEA) emissions
factors(f) Financial control(g) WRI GHG Protocol. Verified by Apex Companies.

GRI 305

Emissions305-4

GHG emissions intensity

The reporting organization shall report the following information:a. GHG emissions intensity ratio for the organization.
b. Organization-specific metric (the denominator) chosen to calculate the ratio.
c. Types of GHG emissions included in the intensity ratio; whether direct (Scope 1), energy
indirect (Scope 2), and/or other indirect (Scope 3).
d. Gases included in the calculation; whether CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, or all.

(a) 3.6(b) Number of employees(c) Scope 2 and Scope 3(d) All included

GRI 306

Effluents and Waste

306-2

Waste by type and disposal
methodThe reporting organization shall report the following information:a. Total weight of hazardous waste, with a breakdown by the following disposal methods
where applicable:

As a financial services firm, we do not generate hazardous waste directly beyond thedisposal of computing systems, which we strive to dispose of properly and recycle.

i. Reuse
ii. Recyclingiii. Compostingiv. Recovery, including energy recovery
v. Incineration (mass burn)vi. Deep well injection
vii. Landfill
viii. On-site storageix. Other (to be specified by the organization)b. Total weight of non-hazardous waste,with a breakdown by the following disposal
methods where applicable:
i. Reuse
ii. Recyclingiii. CompostingCARLYLE 2021 IMPACT REVIEW

iv. Recovery, including energy recovery
v. Incineration (mass burn)vi. Deep well injection
vii. Landfill
viii. On-site storageix. Other (to be specified by the organization)c. How the waste disposal method has been
determined:
i. Disposed of directly by the organization, orotherwise directly confirmed
ii. Information provided by the waste disposal
contractor
iii. Organizational defaults of the waste
disposal contractor

47

ENVIRONMENTALDISCLOSURESGRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATIONGRI 306

Effluents and Waste

306-3

Significant spills

The reporting organization shall report the following information:a. Total number and total volume of recorded significant spills.
b. The following additional information for each spill that was reported in theorganization’s
financial statements:
i. Location of spill;ii. Volume of spill;iii. Material of spill, categorized by: oil spills (soil or water surfaces), fuel spills(soil or water surfaces), spills of wastes (soil or water surfaces), spills of chemicals(mostly soil or water surfaces), and other (to be specified by the organization).
c. Impacts of significant spills.

As a financial services firm, we do not generate hazardous waste directly
beyond the disposal of computing systems, which we strive to dispose ofproperly and recycle.

GRI 306

Effluents and Waste

306-4

Transport of hazardous waste

The reporting organization shall report the following information:a. Total weight for each of the following:i. Hazardous waste transported
ii. Hazardous waste imported
iii. Hazardous waste exported
iv. Hazardous waste treatedb. Percentage of hazardous waste shipped internationally.
c. Standards, methodologies, and assumptions used.

As a financial services firm, we do not generate hazardous waste directly
beyond the disposal of computing systems, which we strive to dispose ofproperly and recycle.

GRI 307

Environmental Compliance

307-1

Non-compliance withenvironmental laws andregulations

The reporting organization shall report the following information:a. Significant fines and non-monetary sanctions for non-compliance withenvironmental laws and/or regulations in terms of:i. total monetary value of significant fines;
ii. total number of non-monetary sanctions;iii. cases brought through dispute resolution mechanisms.
b. If the organization has not identified any non-compliance with environmental
laws and/or regulations, a brief statement of this fact is sufficient.

We are not aware of any material fines for non-compliance withenvironmental laws or regulations within our operations.

CARLYLE 2021 IMPACT REVIEW

48

SOCIAL DISCLOSURES

Social Disclosures

The table below lists the material environmental topics identified during The Carlyle Group’s materiality
assessment process (see Impact Review, pg. 37). All topics identified pertain directly to The Carlyle Group.

GRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATIONGRI 401

Employment

401-2

Benefits provided to full-time
employees that are not provided
to temporary or part-time
employees

The reporting organization shall report the following information:a. Benefits which are standard for full-time employees of theorganization but are not provided to temporary or part-time
employees, by significant locations of operation. These include, as aminimum:i. life insurance;ii. health care;iii. disability and invalidity coverage;
iv. parental leave;
v. retirement provision;vi. stock ownership;vii. others.
b. The definition used for ‘significant locations of operation’.

The Carlyle Group currently provides the following benefits to full and part-time employees for our significant
offices locations in Washington DC, New York, London and Hong Kong:• life insurance• health care
• disability and invalidity coverage• parental leave• retirement provision• stock ownership (for certain grades)• tuition reimbursement• commuter allowance• childcare backup or vouchers• dental care insurance
In the U.S., our full-time employees generally are eligible for the benefits listed above, while part-time employees
typically only are eligible for retirement benefits, which retirement benefits are the same for full-time and parttime employees.
Almost 100% of our full-time employees are eligible for coverage under the benefit and leave plans offered in theirrespective geographies.

GRI 401

Employment

401-3

Parental leave

The reporting organization shall report the following information:a. Total number of employees that were entitled to parental leave, bygender.
b. Total number of employees that took parental leave, by gender.
c. Total number of employees that returned to work in the reporting
period after parental leave ended, by gender.
d. Total number of employees that returned to work after parental
leave ended that were still employed 12 months after their return towork, by gender.
e. Return to work and retention rates of employees that took parental
leave, by gender.

In April 2019, for employees in our U.S. offices, we revamped the parental leave policy to include 16 weeks ofpaid parental leave for primary caregivers. During 2020, almost 100% of our global employees were entitled toparental leave. We offer parental leave to employees of all genders.

GRI 403

Occupational Health and
Safety403-6

Promotion of worker health

The reporting organization shall report the following information for
employees and for workers who are not employees but whose work
and/or workplace is controlled by the organization:a. An explanation of how the organization facilitates workers’ access to
non-occupational medical and healthcare services, and the scope ofaccess provided.
b. A description of any voluntary health promotion services andprograms offered to workers to address major non-work-related
health risks, including the specific health risks addressed, and how theorganization facilitates workers’ access to these services and programs.

We are committed to the health, safety, and wellness of our employees. Following the start of the COVID-19
pandemic, during 2020, we offered enhanced support to our employees by partnering with external wellness
providers to host dedicated sessions on mental and physical well-being. We invested in developing a global fivepillar wellbeing plan, with the support of our senior management team. This plan focuses on the emotional, physical,
social, financial, and environmental wellness of our employees. It includes webinar presentations by experts on topics
including health, nutrition, resilience, and longevity, movement programs and challenges, and putting tools in place tohelp our employees feel safe and productive while working in a remote or hybrid work environment. As part of these
efforts, we partnered with an external wellness provider to lead mindfulness and wellness webinars and meditationand yoga classes. We also centralized COVID-19 resources on our intranet page, including tips for managers andworking parents, and access to our Employee Assistance Program.
In the U.S., we provided access to a membership for full-time employees and their families to One Medical, a The
Carlyle Group portfolio company. One Medical is a primary care practice that is focused on patient comfort andconvenience. One Medical provides 24/7 virtual care via video, phone, and email, as well as online appointment
booking and prescription renewals via an application or website.
The Carlyle Group considered equity and inclusivity as we worked to redesign some of our employee benefits. In
January 2020, we partnered with Progyny, a leading fertility benefits provider, to offer inclusive family building
benefits and support to our employees and their partners, including single parents by choice and LGBTQ individuals

CARLYLE 2021 IMPACT REVIEW

49

SOCIAL DISCLOSURESGRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLE

GRI 403

Occupational Health and
Safety Continued

403-6

Promotion of worker healthContinued

DESCRIPTIONLOCATION OR RELEVANT INFORMATION

and couples. Based on feedback and suggestions from our LGBTQ and Working Parents employee resource groups(ERGs), in partnership with our Human Capital Management team, this benefit is available to all full-time employees
versus traditional benefits that require evidence of infertility. The benefit provides access to a large network offertility specialists, and support for adoption or surrogacy options, as well as coverage for family planning processes.
Commencing in 2021, we are providing an annual wellbeing stipend for employees at the level of Principal/Director
and below that can be used in the employee’s discretion for health and wellness related items or services. Suggested
uses for this stipend include gym memberships and class fees, meditation or sleep apps, exercise equipment, acommuting bike, fees for a nutrition coach, a massage therapist, and other related items or services.
During the COVID-19 pandemic, we formed a special committee tasked with monitoring developments and hosted
informational presentations. For example, a member of the COVID-19 Prevention Network, presented to ouremployees on the SARS-COV-2, recent mutations, global vaccine development, deployment, and efficacy.
In addition to the benefits outlined above, we are especially focused on employee satisfaction and mental
health during the pandemic. We implemented global manager trainings to train managers to recognize
symptoms of burnout versus stress in themselves and their staff with subsequent training on how to respondin a motivating and inspiring way. Further, in recognition of employee feedback regarding difficulties in
disconnecting while working from home, our senior management team has decided to close our offices
globally for one week in August 2021. This closure will not count towards our employees’ regularly allottedvacation days. Similarly, the firm closed for one week in December 2020 to allow employees to disconnect.
This decision was made, in part, in response to the results of our annual employee engagement survey. The
survey is an integral part of our Human Capital Management development strategy. An overview of theresults of the employee engagement survey is shared with all global employees.
Our focus on employee health and wellness extends to our physical offices as well. All of our Washington, D.C. and
New York, New York offices are equipped with motorized standing desks.

GRI 404

GRI 404

Training and Education

Training and Education

404-1

404-2

Average hours of training peryear per employee

Programs for upgrading
employee skills and transition
assistance programs

The reporting organization shall report the following information:
a. Average hours of training that the organization’s employees haveundertaken during the reporting period, by:i. gender;ii. employee category

During 2020, we did not track the hours and cost for employee training programs on a per employee basis.
However, in 2021 we have implemented a new learning management system, EMPOWER, which we anticipate willallow us to gather data regarding the cost and hours of training completed during 2021. We anticipate that the
EMPOWER system also will assist us in tracking learning metrics and improving our training offerings for employees.

The reporting organization shall report the following information:a. Type and scope of programs implemented and assistance provided
to upgrade employee skills.
b. Transition assistance programs provided to facilitate continued
employability and the management of career endings resulting fromretirement or termination of employment.

We provide a broad range of training programs to assist employees in upgrading their skills. These include:

We are committed to ensuring that our employees have the relevant knowledge, skills, and expertise to performtheir roles at high standards and achieve their full potential. The EMPOWER system provides our global employeeswith access to training and learning resources on demand at their convenience.

1. Instructor-led Training Delivery/Facilitation• Full curriculum of scheduled training with CPE credits available, typically focused on professional and leadership skills.
• Technical Training, such as programs on fundamental and advanced Excel.
2. eLearning Programs
eLearning programs are offered to both full-time and part-time employees:• LinkedIn Learning provides an extensive online library of instructional videos on professional and leadership skills
taught by industry experts.
• GetAbstract provides book summaries of over 13,000 current and classic best sellers and hundreds of summaries
and links to TED Talks.
• Blue Ocean Brain provides short articles, tips, and brain performance challenges focused on critical thinking skills
and building brain-healthy habits.
• Corporate Executive Board Accounting & Controls Roundtable provides accounting specific best practiceresearch, templates, accounting research tools, and a policy library, as well as access to over 200 self-paced
online courses and webcasts, with CPE credit available.
3. Onboarding• Learning & Development Overview during week 1 orientation.
• Monthly Global Employee Orientation sessions providing overviews of different areas of the firm.

CARLYLE 2021 IMPACT REVIEW

50

SOCIAL DISCLOSURESGRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLE

GRI 404

Training and Education
Continued

404-2

Programs for upgrading
employee skills and transition
assistance programsContinued

DESCRIPTIONLOCATION OR RELEVANT INFORMATION

4. Annual training programs• Analyst, Associate, and Senior Associate Program and Associate Continuing Education.
• Global VP/Associate Director Forum.
• Finance Training Day, which focuses on training for those in investor services roles (for example finance or
technology), with CPE credit available.
5. Leadership Programs• Better Managers Program, which focuses on building core, foundation management behaviors and skills andaddresses topics such as increasing self-awareness, transitioning to management, setting goals, giving andreceiving feedback, building trust, delivering change, and driving collaborative solutions.
• Better Leaders Program, which focuses on advanced management behaviors and skills such as leading change
efforts, driving decision quality, effectively delegating, inspiring followership, building high-performing teams,
leading difficult conversations, performance coaching, and managing upwards. Participants complete both MBTI
and Hogan assessments.
• Career Strategies Initiative, which provides underrepresented professionals with the access, inspiration,and support needed to advance and expand their impact and scope; builds inclusive teams and boosts theeffectiveness of the participants’ managers as leaders; includes a robust assessment center, assigned Career
Coach and Executive Sponsor, peer learning cohorts, bi-monthly skill building workshops, and career action
planning.
• Quarterly Learning Sessions for People Managers, which provide sessions on best practices research andinteractive exercises.
6. Formal Mentorship Program
To provide career development guidance to gain knowledge, skills, experience, information, and advice.
7. Training Tuition Reimbursement Program
We reimburse eligible employees for a portion of the cost of external training programs, including: undergraduate
coursework, graduate coursework, various professional certifications, standardized test preparation, or academic seminars.

GRI 405

Training and Education

404-3

Percentage of employees
receiving regular performanceand career development
reviews

The reporting organization shall report the following information:a. Percentage of total employees by gender and by employee category
who received a regular performance and career development review
during the reporting period.

All global employees receive an annual performance review which includes discussion of career development.
We use a single performance evaluation process for employees. The key features of our performance evaluation
process, which are tracked in our performance feedback system, include team and individual goal setting with
employees setting one goal specifically focused on diversity, equity, and inclusion, gathering stakeholder feedback,conducting mid-year reviews of progress toward goals, gathering additional stakeholder feedback, andconducting year-end performance evaluations.
Business leaders also review goals with a focus on creating opportunities for their team member to grow andadvance over time. These discussions help to identify future leaders and build a talent bench.
Based on employee feedback, we have our Human Capital Management team that has worked to communicate
further transparency in our promotions process. For example, the HCM team provided information regarding theprocess and criteria for promotion on our internal employee website. Each team is assigned a Human Resources
Business Partner who is responsible for responding to questions employees may have about promotions.

GRI 405

Diversity and Equal
Opportunity

405-1

Diversity of governancebodies and employees

The reporting organization shall report the following information:a. Percentage of individuals within the organization’s governancebodies in each of the following diversity categories:
i. Gender;
ii. Age group: under 30 years old, 30-50 years old, over 50 years old;iii. Other indicators of diversity where relevant (such as minority orvulnerable groups).
b. Percentage of employees per employee category in each of thefollowing diversity categories:
i. Gender;
ii. Age group: under 30 years old, 30-50 years old, over 50 years old;iii. Other indicators of diversity where relevant (such as minority orvulnerable groups).

Our Board of Directors oversees our business and affairs and consists of 12 directors. Currently, half of the directors
on our Board are independent. Over time, we intend to transition to a majority independent Board. Two of our
founders, David M. Rubenstein and William E. Conway, Jr., currently serve as non-executive Co-Chairmen of theBoard. Our Chief Executive Officer, Kewsong Lee, also serves as a Board member. Janet Hill serves as our Board leadfor ESG. Lawton Fitt serves as our Lead Independent Director. She presides at executive sessions of the independent
directors and engages with them between Board and Committee meetings. As our Lead Independent Director,
Ms. Fitt, works closely with the independent directors to provide essential objective oversight of our business.
She facilitates communications with the Board, the identification of matters for consideration by the Board andmanagement, and the formulation of appropriate guidance to be suggested by the independent directors.
The Carlyle Group’s Board of Directors is comprised of 30%+ diverse directors. The Board of Directors believes
that diversity is an important component of a board, which includes such factors as background, skills, experience,expertise, gender, race, and culture. Further, the Board of Directors does not discriminate on the basis of race,color, national origin, gender, religion, disability, or sexual preference in selecting director candidates.
Please view pages 7-13 of The Carlyle Group’s Proxy Statement for additional information on the Board of Directors including
biographies.

CARLYLE 2021 IMPACT REVIEW

51

SOCIAL DISCLOSURESGRI STANDARD NUMBER

GRI STANDARD TITLEDISCLOSURE NUMBERDISCLOSURE TITLEDESCRIPTIONLOCATION OR RELEVANT INFORMATIONGRI 413

Local Communities

413-1

Operations with local
community engagement,
impact assessments, anddevelopment programs

The reporting organization shall report the following information:a. Percentage of operations with implemented local community
engagement, impact assessments, and/or development programs,
including the use of:i. social impact assessments, including gender impact assessments,
based on participatory processes;
ii. environmental impact assessments and ongoing monitoring;iii. public disclosure of results of environmental and social impact
assessments;
iv. local community development programs based on local communities’
needs;
v. stakeholder engagement plans based on stakeholder mapping;vi. broad-based local community consultation committees andprocesses that include vulnerable groups;vii. works councils, occupational health and safety committees andother worker representation bodies to deal with impacts;
viii. formal local community grievance processes.

Please view the following page for information on our response to the COVID-19 pandemic.

Incidents of non-complianceconcerning marketing
communications

The reporting organization shall report the following information:a. Total number of incidents of non-compliance with regulations and/or voluntary codes concerning marketing communications, including
advertising, promotion, and sponsorship, by:i. incidents of non-compliance with regulations resulting in a fine or
penalty;ii. incidents of non-compliance with regulations resulting in a warning;iii. incidents of non-compliance with voluntary codes.
b. If the organization has not identified any non-compliance withregulations and/or voluntary codes, a brief statement of this fact issufficient.

No instances of noncompliance with regulations and/or voluntary codes concerning marketing activities
resulting in fines or non-monetary sanctions from competent authorities were identified during thereporting period.

GRI 417

Marketing and LabellingCARLYLE 2021 IMPACT REVIEW

417-3

Please see pages 20-22 in The Carlyle Group’s Form 10-K.
We are currently focused on responding to the surge of COVID-19 cases in India. Carlyle and some of our portfolio
companies are partnering with a consortium of government, private companies, and charities to source andimport necessary oxygen concentrators and oxygen bottles.

52

WORLD ECONOMIC FORUM

World Economic Forum
SUB-THEMES, CORE METRICS & DISCLOSURESLOCATION OR RELEVANT INFORMATIONSUB-THEMES, CORE METRICS & DISCLOSURES

Setting purpose
Whether the company has a stated purpose linked to societal
benefit and their core business

An important component of Carlyle’s mission statement is to be responsible andrespected members of the global community. As stated on our firm’s landing
page, as a global investment firm we work together to create long-term value forour investors, companies, shareholders, people and communities. Further, our CEO
Kewsong Lee signed the Business Roundtable’s Statement on the Purpose of a
Corporation in 2019, reaffirming our commitment to all of our stakeholders.

Greenhouse Gas (GHG) emissions
Report GHG Protocol Scope 1 and 2 emissions in tonnes of carbon
dioxide equivalent (tCO2e) and estimate and report upstream
and downstream (GHG Protocol Scope 3) emissions wherematerial.

No material Scope 1 emissions
Scope 2 emissions: 4,999 MTCO2e
Scope 3 emissions: 1,553 MTCO2e

TCFD‑aligned reporting on material climate risks andopportunities TCFD‑aligned reporting on governance and risk
management for all.
If climate change is material in short, medium or long term, disclose
strategy and metrics/ targets as well, including whether thecompany has committed to set a science‑based target in line withnet zero by 2050.

Climate change is material in the short, medium, and long term. Our strategy toaddressing climate risks and opportunities is available publicly in our TCFD report.

Diversity and inclusion (%)
Percentage of employees per employee category, by age group,
gender and other indicators of diversity

Please see information on diversity within our teams here.

Training provided (#)
1. Average hours of training per person that the organization’s
employees have undertaken during the reporting period, by genderand employee category (total number of trainings provided to
employees divided by the number of employees)
2. The average training and development expenditure per full time
employee

Please see GRI disclosure 404-1 in this document.

Net Economic Contribution
1. Direct economic value generated and distributed (EVG&D) – on an
accruals basis, covering the basic components for the organization’s
global operations, including revenues, operating costs, employee
wages and benefits, payments to providers of capital, payments togovernment
2. Financial assistance received from the government (e.g. tax
breaks, subsidies, investment grants etc.)
3. Net Economic Contribution = (EVG&D) minus (Financial assistancereceived from the government)

Please see GRI disclosure 201-1 in this document.

Community investment (%)
A percentage breakdown of community investment, including
monetary contributions such as charitable gifts and community
partnerships; time contributions such as staff volunteering in
paid time; in‑kind contributions from services or equipment; andmanagement costs, normalized as a percentage of pre‑tax profit

In 2020, The Carlyle Group matched 803 donations to 250 charitable organizations.
In total, ~$925,000 were donated in 2020.

The Statement on the Purpose of a Corporation is focused on a commitment to:
Deliver value to customers;
Invest in employees through fair compensation and provision of benefits;
Deal fairly and ethically with suppliers;
Provide support to the communities in which a company operates; and,
Generate long-term value for shareholders, who provide the capital that allows
companies to invest, grow and innovate. This includes transparency and effective
engagement with shareholders.
The full Statement on the Purpose of a Corporation can be found here.

Board composition
Composition of the highest governance body and its committees
by: executive or non‑executive; independence; tenure on thegovernance body; number of each individual’s other significant
positions and commitments, and the nature of the commitments;
gender; membership of under‑represented social groups;
competencies relating to economic, environmental and social
topics; stakeholder representation

Please see GRI disclosure 102-22 in this document.

Impact of material issues on stakeholders
A list of the material topics identified in the process of defining
report content and how they impact stakeholders

100% of Carlyle’s employees receive training on the organization’s anti-corruption
policies and procedures.

Protected ethics advice and reporting mechanisms
A description of internal and external mechanisms for:1. seeking advice about ethical and lawful behaviour, andorganizational integrity;
2. reporting concerns about unethical or unlawful behaviour, andorganizational integrity

Please see GRI disclosure 102-17 in this document. Disclosure 102-17 details ourCode of Conduct, Whistleblower Policy and Ethics and Compliance Hotline.

Integrating risk and opportunity into business process
Company risk factor disclosures clearly identify the principal risksfacing the company specifically (as opposed to generic sectorrisks), the Board appetite in respect of these risks, how these risks
have moved over time and the response to those changes. Theseshould include discussion of data security and other emerging
principal risks and should disclose the number of data breaches in
the reporting period

Please see GRI disclosure 102-15 in this document.

CARLYLE 2021 IMPACT REVIEWLOCATION OR RELEVANT INFORMATION

Additionally, we engaged in a number of volunteering and fundraising initiatives:• Our New York, D.C., London, Miami, and Los Angeles offices participated in a Rumie
virtual volunteer workshop, focused on advancing microlearning initiatives to remove
barriers to learning• Our D.C. office hosted a Community of Hope back-to-school drive and a holiday toy
drive for he Boys & Girls Club of Greater Washington• For the past ten years, The Carlyle Group has gathered a team to participate in
Cycle for Survival, a cycling event to raise money for rare cancer research. To date,
we have raised over $265,000 for the organization

53

WORLD ECONOMIC FORUM

SUB-THEMES, CORE METRICS & DISCLOSURESLOCATION OR RELEVANT INFORMATION

Community investment (%) Continued
A percentage breakdown of community investment, including
monetary contributions such as charitable gifts and community
partnerships; time contributions such as staff volunteering in
paid time; in‑kind contributions from services or equipment; andmanagement costs, normalized as a percentage of pre‑tax profit• Our New York office hosted a holiday toy drive to support children that attend
Carter G. Woodson school in Brooklyn NY• Our Hong Kong office participated in a Junior Achievement virtual volunteer
workshop• Our London office spent time providing virtual tutoring for students during the
COVID-19 pandemic• Our Luxembourg office hosted a food and toy drive• Our Beijing & Shanghai offices jointly made donations to buy 213 bottles of handwash for Tibetan children during the COVID-19 pandemic• Our Tokyo office worked wih Social Investment Partner, Junior Achievement,
and Learning for All, which provide educational services to low-income families.
Addiionally, the Tokyo office hosted a food drive and online run to support
charitable organizations.
Our response to the COVID-19 pandemic can be found here.

Country by country tax reporting
1. All tax jurisdictions where the entities included in the organization’s
audited consolidated financial statements, or in the financial
information filed on public record, are resident for tax purposes.

Please view pages 206-207 of The Carlyle Group’s Form 10-K report.

2. For each tax jurisdiction reported in Disclosure 207‑4‑a:– Names of the resident entities– Primary activities of the organization– Number of employees and the basis of calculation of this number– Revenues from third‑party sales– Revenues from intra‑group transactions with other tax
jurisdictions– Profit/loss before tax– Tangible assets other than cash and cash equivalents– Corporate income tax paid on a cash basis– Corporate income tax accrued on profit/loss– Reasons for the difference between corporate income tax
accrued on profit/ loss and the tax due if the statutory tax rate isapplied to profit/loss before tax
3. The time period covered by the information reported inDisclosure 207‑4.

CARLYLE 2021 IMPACT REVIEW54

DISCLOSURES

GENERAL DISCLOSURESA

ll content included in thisCorporate Citizenship Report,such as graphics, logos, articles andother materials, is the property ofCarlyle or others noted herein and isprotected by copyright and other laws.
All trademarks and logos displayed inthis Corporate Citizenship Report are
the property of their respective owners,
who may or may not be affiliatedwith our organization. Any person
receiving this Corporate Citizenship
Report is permitted to copy and print
individual pages for informational,
non-commercial use. These copies
must not alter the original report’s
content, including all legal notices andlegends. There can be no assurancesthat Carlyle’s investment objectives will
be achieved or that our investment
programs will be successful. PASTPERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
Investors should read this Corporate
Citizenship Report in conjunction withinvestment fund quarterly reports,financial statements and otherdisclosures regarding the valuations andperformance of the specific investments
listed herein. Investors should also
review Carlyle’s annual, quarterly, andother reports filed with the Securities
and Exchange Commission (SEC). Certainof the information contained in thisCorporate Citizenship Report represents
or is based upon forward-looking
statements or information. Forwardlooking statements are inherently
uncertain, and changing factors, such as
those affecting the markets generally, or
those affecting particular industries or
issuers, may cause events or results todiffer from those discussed. Therefore,
undue reliance should not be placedon such statements or the conclusionsCARLYLE 2021 IMPACT REVIEW

drawn therefrom, which in no event
shall be construed as a guarantee of
future performance, results or coursesof action. Carlyle believes thesefactors include, but are not limited to,those described under “Risk Factors”
in Carlyle’s Annual Report on Form
10-K for the year ended December
31, 2020, filed with the SEC, as suchfactors may be updated from time totime in its periodic filings, which areaccessible on the SEC’s website at www.
sec.gov. Carlyle expressly disclaims any
obligation or undertaking to updateor revise any such forward-looking
statements. References to portfolio
companies are intended to illustrate
the application of Carlyle’s investment
process only and should not be viewed
as a recommendation of any particular
security or portfolio company. The
information provided about theseportfolio companies is intended to beillustrative, and is not intended to be
used as an indication of the current or
future performance of Carlyle’s portfolio
companies. The investments describedin the selected case studies were notmade by any single fund or otherproduct and do not represent all of theinvestments purchased or sold by any
fund or other product. The information
provided herein is for informational
purposes only and is not and may not
be relied on in any manner as advice
or as an offer to sell or a solicitation of
an offer to buy interests in any fund orother product sponsored or managed
by Carlyle or any of its affiliates. Anysuch offer or solicitation shall only bemade pursuant to a final confidential
private placement memorandum (asamended and/or restated from time
to time) and the applicable fund’s
subscription documents, which will
be furnished to qualified investors on
a confidential basis at their request
for their consideration in connection
with such offering. Please see Carlyle’s

public filings for the definition of “carryfunds” and “Assets under Management”
or “AUM.”
Please note that certain energy funds
described herein are jointly advisedwith Riverstone Holdings LLC and its
affiliates. Carlyle does not serve as
an adviser to any of the NGP Energy
Capital Management investment funds.
None of the employee metrics included
herein includes the employees ofRiverstone or NGP. For purposes of thenon-financial operating and statistical
data included herein, foreign currencies
have been converted to US dollars at
the spot rate as of the last trading
day of the reporting period whenpresenting period end balances, andthe average rate for the period has
been utilized when presenting activity
during such period.

55All content included in this Corporate Citizenship
Report, such as graphics, logos, articles andothermaterials, is the property of The Carlyle Group orothers noted herein and is protected by copyrightand other laws. All trademarks and logosdisplayedin this Corporate Citizenship Report are theproperty of their respective owners, who may or
may not be affiliated with our organization.
Any person receiving this Corporate Citizenship
Report is permitted to copy and print individual
pages for informational, non-commercial use. These
copies must not alter the original report’s content,
including all legal notices and legends. Therecan be no assurances that Carlyle’s investment
objectives will be achieved or that our investment
programs will be successful. PAST PERFORMANCEIS NO GUARANTEE OF FUTURE RESULTS. Investors
should read this Corporate Citizenship Reportin conjunction with investment fund quarterly
reports, financial statements and other disclosures
regarding the valuations and performance of thespecific investments listed herein. Investors should
also review Carlyle’s annual, quarterly and otherreports filed with the Securities and Exchange
Commission (SEC). Certain of the information
contained in this CorporateCitizenship Report
represents or is based upon forward-looking
statements or information. Forward-looking
statements are inherently uncertain, and changing

factors, such as those affecting the markets
generally, or those affecting particular industries
or issuers, may cause events or results to differ
from those discussed. Therefore, undue relianceshould not be placed on such statements or theconclusions drawn therefrom, which in no event
shall be construed as a guarantee of future
performance, results or courses of action. Carlyle
believes these factors include, but are not limited
to, those described under “Risk Factors” in Carlyle’s
Annual Report on Form 10-K for the year ended
December 31, 2019, filed with the SEC, as suchfactors may be updated from time to time in its
periodic filings, which are accessible on the SEC’s
website at www.sec.gov.
Carlyle expressly disclaims any obligation orundertaking to update or revise any such forwardlooking statements. References to portfolio companies
are intended to illustrate the application of Carlyle’s
investment process only and should not be viewed
as a recommendation of any particular security
or portfolio company. The information provided
about these portfolio companies is intended to beillustrative, and is not intended to be used as anindication of the current or future performanceof Carlyle’s portfolio companies. The investments
described in the selected case studies were not madeby any single fund or other product and do not
represent all of the investments purchased or sold byany fund or other product. The information provided
herein is for informational purposes only and is notand may not be relied on in any manner as advice oras an offer to sell or a solicitation of an offer to buy
interests in any fund or other product sponsored or
managed by Carlyle or any of its affiliates. Any suchoffer or solicitation shall only be made pursuant to a
final confidential private placement memorandum (asamended and/or restated from time to time) and theapplicable fund’s subscription documents, which will
be furnished to qualified investors on a confidential
basis at their request for their consideration inconnection with such offering. Please see Carlyle’s
public filings for the definition of “carry funds” and“Assets under Management” or “AUM.” Please notethat certain energy funds described herein are
jointly advised with Riverstone Holdings LLC and its
affiliates. Carlyle does not serve as an adviser to anyof the NGP Energy Capital Management investment
funds. None of the employee metrics included
herein includes the employees of Riverstone or NGP.
For purposes of the non-financial operating andstatistical data included herein, foreign currencies
have been converted to US dollars at the spot rate
as of the last trading day of the reporting period
when presenting period end balances, and theaverage rate for the period has been utilized whenpresenting activity during such period.
The Carlyle Group™ 2021