2022 ESG Progress Report

With a significant portfolio of cybersecurity-focused companies, we have a role in helping to predict and guard against ever-evolving threat actors. In 2023, Thoma Bravo sponsored a new independent industry group known as the Cyber Consortium. The Consortium brings together leading security experts from the private and public sectors, including former national defense professionals and experts from Fortune 500 companies.

These leaders strive to provide a forum and platform for industry leaders to share best practices, address common challenges, and develop effective strategies to combat cyber threats. The ultimate goal is to help organizations of every size and across all sectors to protect their assets better, safeguard their reputation, and ensure the privacy and security of their customers.

In an increasingly interconnected and technology-dependent world, adopting stringent cybersecurity practices is broadly considered crucial to safeguarding data and digital infrastructure. As part of our initial due diligence and throughout our ownership period, we track metrics on our portfolio companies' cybersecurity policy and adherence to standards.

We recognize that using AI creates opportunities and risks for our portfolio companies. While using AI can lead to higher efficiency, lower costs, and better products, emerging technology also generates risks that are rapidly evolving and possibly opaque. Some of these risks include, but are not limited to, the environmental impact associated with the energy consumption of AI, the social impacts related to the accuracy of AI products and information integrity, and the governance impacts of intellectual property rights, cybersecurity, and data privacy.

Thoma Bravo launched a responsible AI learning cohort in 2023 to help its portfolio companies address this rapidly evolving landscape, provide education, and share best practices. Through this cohort, we collaborate with our portfolio companies to encourage innovation in the use of AI while also seeking to build guardrails to protect against potential risks.

Several of Thoma Bravo's portfolio companies have leveraged AI for years. As visibility around the use of AI has grown, specifically generative AI, we believe there is an opportunity to share our expertise in technology, software, and innovation to decipher threats and uncover opportunities.

AI at our portfolio companies has been able to drive greater productivity and cost efficiencies in various corporate functions and also presents the potential for unlocking new revenue opportunities. We believe that the margins at our portfolio companies can increase by implementing AI.

Governance has been vital in our role in supporting portfolio company management teams and their adoption of principled business practices. At Thoma Bravo, we believe good governance can support long-term value creation, from direct financial impacts to more indirect potential impacts on the planet and communities.

Our approach to due diligence includes training our investment staff on our ESG policy, which helps our investment teams evaluate ESG issues and opportunities. We also work with external advisors to conduct reviews of ESG risks and opportunities and provide Thoma Bravo investment professionals who sit on portfolio company boards with a summary and recommendations on those risks and opportunities. We seek to go beyond just identifying potential issues at our portfolio companies. We also stay engaged and act as an advisor, particularly as members of a portfolio company's board of directors, to help appropriately prioritize ESG.

Many of the governance issues most relevant to our portfolio companies overlap with traditional business operations, including customer data collection, breach and downtime protocols, business continuity, ethics, and codes of conduct. By collecting data from our portfolio companies as part of our ESG program, we can benchmark ESG activities and see patterns and trends.

By gaining a deeper understanding of those ESG items relevant to our investments, we can facilitate interactions that elevate performance standards for our portfolio companies to promote the goal of generating value for our investors and stakeholders.

At Thoma Bravo, we seek to champion the inclusion of underrepresented groups through a culture of mentoring our associates in their careers. Another important Thoma Bravo initiative is expanding access to private equity careers to traditionally underrepresented groups. We are intentional about our own staff and talent pipelines, and 85% of our Associate Class of 2022 identified as an underrepresented group. In addition, we have partnered with organizations like Sponsors for Educational Opportunity (SEO) to increase opportunities for young professionals from underrepresented groups to learn, mentor, and get hired in the finance and software industries. In 2022, we placed 32 SEO summer interns at either Thoma Bravo or at one of our portfolio companies.

Thoma Bravo's executive suite includes female leaders serving as Chief Financial Officer, Chief Operating Officer, Chief Accounting Officer, and Chief Information Officer.

Authentically addressing systemic diversity and inclusion issues is complex and takes time. The diversity portion of our annual ESG survey is extensive, as data is instrumental in helping to identify issues to inform decision-making. Creating a cadence for reporting, benchmarking, and best practices is important for learning among our portfolio companies.

Environmental stewardship has a clear social impact, and it seeks to safeguard our planet for future generations. However, we believe articulating the business case for environmental measures is equally essential to ensure sustainable financial returns by mitigating climate-associated risks. Sharing our progress on environmental issues is important, especially if we ask others to emulate our actions.

We completed our inaugural GHG emissions capture to establish a baseline year for our CO2 emissions and acknowledge that our changing world and work environment will continue challenging how we seek to identify, capture, and reduce our carbon footprint.

We support our portfolio companies in embracing environmental stewardship because it fosters long-term sustainability, minimizes ecological impacts, reduces operational risks, and enhances brand reputation. As an enterprise software investor, we prioritize pertinent concerns within the sector for our portfolio companies by evaluating aspects such as renewable energy consumption and the emissions stemming from data center usage.