KKR : 2020 ESG, Impact, and Citizenship Report

unprecedented.

2020 KKR ESG, IMPACT, AND CITIZENSHIP REPORT

To Our Stakeholders

1

ESG Approach

2

looking back at 2020.

an unprecedented year.

Impact

6

Employees

8

Communities

10

Looking Ahead

12

At the start of 2020, KKR was positioned to capitalize on the hopes and possibilities ushered in by a new decade and a seasoned leadership team. The

Firm was expanding and diversifying our investment footprint and building on our differentiated business model. Opportunities were everywhere, and our teams were ready. Then, seemingly overnight, the world changed, and so did we. The way that our Firm, employees, and portfolio companies have adapted to one of the most challenging years in recent times is something of which we are proud.

As the world battled the COVID-19 pandemic and faced social and environmental crises,

we, too, were impacted. We knew that despite events in the world outside, we had to remain steady, focused, and committed to delivering value for all our stakeholders. This report outlines the unprecedented realities of the last year while also highlighting the ways that KKR has shown up to help, work, and grow. This document is a summary of our ESG, Impact, and Citizenship activities for the 2020 calendar year. Readers can find more information on our website at kkresg.com.

As we look back at the last year and ahead at what's to come, we know that it has not been and will not be easy. But we believe now, more than ever, there is much reason for hope, and many ways to invest for a better tomorrow.

about KKR

KKR is a leading global investment firm that offers alternative asset management and capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in our portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit, and real assets, and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life, and reinsurance products under the management of The Global Atlantic Financial Group.

Over40

Investment funds raised since our inception, including 22 private equity funds.

$252billion

Assets under management

as of December 31, 2020.

$22billion

Invested in or committed to our own funds and portfolio companies alongside our clients as of December 31, 2020.

19million	107
Retirees and pensioners	Portfolio companies in
with exposure to KKR's	our private equity funds that
investments.	generate approximately
	$238 billion in annual revenues
	as of September 30, 2020.

to our stakeholders

In all our years as investors, we have never witnessed the kind of volatility, uncertainty, and hardship we have seen in the past 12 months. It was - and continues to be - an unprecedented time. Individuals, organizations, and countries confronted a global pandemic and were forced to make seemingly impossible choices. We, alongside leaders at our portfolio companies and in our communities, were not spared those difficult moments. While this was not easy, we are proud of the way that our colleagues and portfolio companies have responded, steadying themselves where possible and pivoting where necessary.

During our 45 years of investing, our approach has evolved as the world has changed. More than a decade ago, we began our formal commitment to responsible investment. This work focuses on aligning returns for our investors with the interests and needs of the people and places affected by our investments. This past year, our commitment to being a responsible investor was more important than ever.

Our commitment meant focusing on employee safety and health (p. 5). It meant doubling down on our commitment to diver- sity, equity, and inclusion. In particular, as of July 2021, we have added 100 diverse members to portfolio company boards, meeting our goal of 19% diversity on KKR-owned company boards.1 We also provided extensive resources to our companies - including webinars, handbooks, and access to expert

advisors - to help them better respond to calls for racial justice and equity (p. 5). We continued to meaningfully invest in solutions to global problems because we saw firsthand what happens when society is unprepared (pp. 6-7). And it meant being more connected to the communities where we live, work, and invest through a $50 million philanthropic COVID-19 relief effort (pp. 10-11).

The global pandemic, economic dislocation, and movement for equality have accelerated changes around the world. These changes can be harrowing, and they can also be opportunities for innovation, progress, and growth. We are grateful that we get to work together with all of you in order to better meet this moment.

Henry R. Kravis George R. Roberts

Co-Founders,Co-Chairmen, and Co-CEOs

Joseph Y. Bae

Scott C. Nuttall

Co-Presidents and Co-Chief Operating Officers

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Go to kkresg.com for more information about Responsibility at KKR.

managing ESG issues.

enhanced transparency.

Diligence at Work

230+

companies reviewed during 44 meetings of the ESG Diligence Group in 2020

We believe that thoughtfully managing ESG issues drives better company performance and makes us better investors. Our approach has evolved

over the years to expand beyond private equity and into an increasingly diverse array of asset classes, issue areas, and offerings.

ESG GOVERNANCE

FIRM LEADERSHIP

GLOBALREGIONAL

RESPONSIBLEPUBLIC AFFAIRS

INVESTMENTTEAM

MANAGEMENTEXPERTISE

77

industry-specific reporting templates created to guide diligence on three cross-portfolio topics and on ESG issues identified as financially material by SASB

$7.2billion

invested in companies that help provide solutions to critical environmental or social challenges2

Our North Star

Our fiduciary duty to our investors lies at the heart of all that we do. Our work supports a dignified, secure retirement for tens of millions of public servants, first responders, teach- ers, and others. Now, more than ever, fulfilling that obligation requires us to also consider our responsibility to a wider range of stakeholders in our companies and communities.

Investing responsibly is smart business and is critical to our ability to manage volatility, reduce risk, and unlock value. We have thoughtfully partnered with our portfolio companies on ESG considerations for more than a decade. Our track record demonstrates our ability to meaningfully create and protect value across our investments.

Global Governance

KKR's senior leadership provides ultimate oversight of our responsible investment efforts. Accountability for this work extends throughout the organization with global and regional team members, supported by subject matter experts, collaborating to achieve strong out- comes. This process is described in detail at kkresg.com/governance.

To help us apply best practices, we actively participate in several ESG-focused organizations and communities. KKR has been a signatory of the Principles for Responsible­ Investment (PRI) since 2009. We are guided by the Sustainability Accounting Stan­dards Board (SASB) at the investment level and have served on its board. Our climate strategy is

ASSET

CLASS-SPECIFIC

INVESTMENT

PROFESSIONALS

SUBJECT MATTER

EXPERTS

For illustrative purposes only.

informed by the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. Moreover, KKR has a history of partnering with leading sustainability experts, nongovernmental­ organizations, and other thought leaders to inform our work on ESG topics. Information about our extensive network of external partners is available at kkresg.com.

Addressing More Asset Classes

ESG issues are business issues, which is why we integrate their consideration into our investment process, from pre-investment through exit. We take a materiality-driven approach and focus on the issues that are most relevant to a particular asset, its area of operation, and its stakeholders. This approach helps us and our companies invest our time and resources where they are likely to be most impactful to business outcomes.

In May 2020, we published an enhanced Responsible Investment Policy that addresses the integration of ESG considerations across a wider range of asset classes. This updated policy refers

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to existing resources such as our "Gating Issues" list, which we have utilized for some time, and new resources such as guidance for enhanced documentation of diligence efforts. As we seek to integrate ESG considerations into our processes across the investment life cycle, we recognize that there is no destination. In the spirit of continuous improvement, this work will remain an iterative and dynamic process.

ESG integration in the investment process, and also our Firm-level climate strategy, human capital policies, business ethics, cybersecurity and data privacy practices, and our approach to responsible product governance. Our SASB Report discloses information about KKR's efforts in line with the SASB guidance for the Asset Management industry.

Accountability and Transparency

As part of our ongoing efforts to increase the transparency of our ESG investment approach and progress, we published both our inaugural Supplementary Environmental, Social, and Governance (ESG) Disclosures and our first SASB Report. The purpose of the Supplementary ESG Disclosures is to provide additional ESG-related information about KKR for our public shareholders and other interested stake- holders. This report presents our approach to

Reporting on Progress and Sharing Objectives

We have been reporting on our key focus areas since we began our reporting efforts in 2010. In 2020, we introduced a new feature of this disclosure and now include forward-looking objectives that we seek to achieve in the coming year. We continue to organize our disclosures in alignment with the six principles defined by the Principles for Responsible Investment, as we have for the past 10 years. This information is available on kkresg.com/responsibility.

our ESG management process

perform

due diligence

COMMERCIAL AND

LEGAL/COMPLIANCE DILIGENCE

Evaluate material ESG risks and opportunities applicable for the industry or asset type(s) with regard to the issuer or target company, including climate change risks

evaluate

PRE-SCREENING

Review "Gating Issues" to determine whether there are any critical ESG or reputational concerns with regard to target companies, operators, issuers, and, where relevant, sponsors

document and review

INVESTMENT COMMITTEE EVALUATION

Include key risks and opportunities in Investment Committee discussions

and memorandums as related to the issuer

or target company

Document findings for ongoing tracking as relevant

monitor

and manage

POST-INVESTMENT

Include key ESG risks and opportunities in the Portfolio Management Committee discussions and memorandums

Engage with select companies on value creation efforts

Document progress

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