ESG Policy

ESG Policy

FS Investments ESG Policy

Introduction and scope

The mission of FS Investments (“FS” or the “Firm”) is to help investors design better, more diversified investment portfolios.

Founded in 2007 by Michael Forman and several others, and originally named Franklin Square Capital Partners, the Firm’s vision was to provide investors access to best-in-class alternative sources of income and growth, historically available only to large institutions and the wealthiest individuals. Today, our mission remains the same, and we are managing a growing suite of thoughtfully designed funds that combine differentiated strategies, top institutional managers and investment structures tailored to our investors’ needs.

While we have grown significantly over the years, expanded our distribution footprint and diversified our fund offerings, we have also stayed true to our four foundational values:


As fiduciaries, we place our investors’ interests above all else. We aspire to lead the industry in investment performance, investor protections, education and transparency.


We believe great firms are built with great people. We seek to attract, and reward driven, high-performing colleagues who share our passion to excel on behalf of our investors.


We value grit, agility, collaboration and high performance; emphasize compliance, accountability, diversity, equity, inclusion and belonging; and encourage professional development, healthy lifestyles, and comradery.


We invest in having a positive impact on our communities, championing civic leadership, volunteerism and philanthropy at all levels of our organization.


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

I. FS General administration

From FS’ earliest days, our leadership team implemented ESG practices in the Firm’s operations, long before adopting this formal ESG policy. Over the years, we actively took steps to reduce our environmental impact, prioritize diversity and equity, foster an environment of inclusion and belonging, and provide our colleagues physical fitness, nutritional wellness and other health-related programs. Today, the Firm’s headquarters is an LEED-certified building, as an example.

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

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

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

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

And perhaps most importantly, the Firm continues to lead the industry with best practices, transparency, and investor friendly structures. Nonetheless, we remain committed to doing all we can to improve our ESG practices in an ever-changing world by building upon existing practices and programs and looking for new opportunities to be an even more responsible corporate citizen.

I. Funds fully managed in-house1

Foremost among our values is the fiduciary duty we owe to our investors. Consistent with this obligation, we seek to deliver superior investment performance in the funds we manage. We recognize ESG factors can significantly affect the performance of our funds’ portfolio companies. A material environmental, social or governance failure by a portfolio company could result in litigation, regulatory and/or reputational risk to the portfolio company and, in turn, our funds and the Firm. Accordingly, we will strive to assess and mitigate ESG risk factors as part of our investment process, where possible, depending on the structure of the investment.

In evaluating an individual company investment, FS investment professionals will, where applicable:

  • Seek to identify ESG factors that may have a material adverse effect on a portfolio company, its operations, its investment performance, or the terms of a specific investment. The factors considered will vary based on the unique aspects of the business of each potential investment and the structure of the investment.
  • Convey any material ESG factors identified to the strategy’s Investment Committee for further consideration. The Investment Committee may request additional research into any material ESG factor identified, including engaging directly with the portfolio company.
  • Assist the strategy’s Investment Committee in assessing any material ESG risk factors as part of the investment process and evaluating whether a particular investment has the potential, in our view, to deliver superior, risk- adjusted returns.

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

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

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

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

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

I.  Funds managed in cooperation with investments partners and sub-advisors2

A number of FS funds are jointly managed by the Firm and a sub-adviser or joint venture partner. The Firm seeks to partner with asset managers that have committed themselves to an ESG policy. Today, all of the Firm’s sub-advisers and joint venture partners maintain an ESG policy and work to continue to build their respective ESG policies and procedures.

To the extent we wish to partner with a manager who does not have an ESG policy in place, we may seek to work with that manager to develop and implement an appropriate ESG policy. We will evaluate any prospective partner’s ESG policy as part of our initial due diligence and will review each partners’ ESG policy annually.

Specifically, we commit to:

  • Formally incorporate consideration of a potential partner’s ESG practices into our partnership diligence process;
  • Build ESG items into our initial and periodic partnership due diligence questionnaires; and
  • Report to the applicable Investment Committee the results of the annual due diligence review, as it relates to ESG.


FS’ Managing Director of Compliance will oversee the implementation of this policy and report to the FS Executive Committee regarding the Firm’s adherence to this policy and any necessary modifications. The Managing Director of Compliance will also convene at least two (2) meetings per year to discuss the Firm’s ESG practices and related issues and may call additional meetings as needed with the following individuals (collectively, the “ESG Advisory Committee”):

  • A representative portfolio manager for each of the FS funds or fund complexes,
  • The Head of Product Development and Due Diligence,
  • A representative from the Public Affairs team,
  • A representative from the Legal and Compliance team,
  • A representative from the Sales and Distribution team,
  • A committee secretary appointed by the Managing Director of Compliance, and
  • Any other person(s) invited by the Managing Director of Compliance.

The Managing Director of Compliance, at her discretion, may appoint one or more other members of the ESG Advisory Committee as vice-chairpersons to assist with the Committee responsibilities.

The current members of the ESG Advisory Committee are identified in Appendix B.

The ESG Advisory Committee shall monitor the Firm’s adherence to this policy and review, modify if necessary, and re-approve this policy annually. Two thirds of the ESG Advisory Committee must be in attendance at an annual meeting to approve the policy, and a majority of those in attendance must vote in favor of the policy. If the Managing Director for Compliance determines a meeting is unnecessary and that a vote by email is appropriate, no meeting is required.

Adopted: November 30, 2020

Updated: March 28, 2022

Updated: February 15, 2023

Appendix A3

List of funds fully managed in-house

  • FS Global Credit Opportunities Fund
  • Bridge Street CLO I, II and III
  • FS Managed Futures Fund3
  • FS Chiron Real Asset Fund3
  • FS Tactical Opportunities Fund
  • FS Chiron Capital Allocation Fund3
  • FS Chiron SMid Opportunities Fund3
  • FS Chiron Global Opportunities Fund3

List of funds managed in cooperation with investment partners and sub-advisors

  • FS Credit Income Fund
  • FS Credit Real Estate Income Trust, Inc.
  • FS Energy and Power Fund
  • FS KKR Capital Corp.
  • FS Multi-Strategy Alternatives Fund

Appendix B

ESG Advisory Committee members

  • Chairperson: Lisa Detwiler, Legal and Compliance Team
  • Vice Chairpersons: Jason Young, Legal and Compliance Team; Kristen Richards, Legal and Compliance Team
  • Secretary: Molly Borgese, Legal and Compliance Team
  • Portfolio Managers:
    • James Beach (FS Credit Income Fund)
    • Scott Burr (FS Series Trust)
    • David Weiser (FS Energy and Power Fund)
    • Brian Gerson (FSK Franchise Funds)
    • Nick Heilbut (FS Global Credit Opportunities Fund, FS Tactical Opportunities Fund)
    • James Holley (Bridge Street CLOs)
    • Rob Lawrence (FS Credit Real Estate Income Trust, Inc.)
    • Brian Cho (Chiron Funds)
  • Peter Ort, Head of New Product Development
  • Michael Gerber, Senior Managing Director for Corporate Affairs
  • Brandon Welsh, Director of Vendor Diligence
  • Kirsten Pickens, Sales and Distribution Team
  • Phil Browne, Senior Managing Director, Finance and Administration
  • Jason Cole, Executive Director, Public Policy and Corporate Social Responsibility

View important footnotes + disclosures

  • See the list of FS’ funds that are managed in cooperation with investment partners and sub-advisers set forth on Appendix A.
  • See the list of FS’ funds that are managed in cooperation with investment partners and sub-advisers set forth on Appendix A.
  • The Firm acquired Chiron Investment Management, LLC in March 2020. The funds managed by Chiron Investment Management LLC have not been incorporated into this policy. In addition, the funds managed by FS Fund Advisor, LLC, directly, have not been incorporated into this policy.

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