Strengthening Our Commitment

Castlelake is pleased to present its 2021 ESG Report, providing a comprehensive look at our progress throughout 2021, as we seek to enhance our value proposition for our stakeholders via practical actions and long-term strategic initiatives.

2021 ESG Milestones

Building on progress in 2020, Castlelake focused on expanding and deepening our commitment to environmental, social and governance (ESG) initiatives across our organization. We have worked diligently to make ESG a more consistent part of our culture and our daily work: training our global team, integrating ESG as a core component of our firm’s strategic plans, and elevating accountability to CEO Rory O’Neill as the executive sponsor of our ESG Committee. Our 2021 report discusses these and other examples of our commitment coming to life over the course of the year.

As we look ahead to 2022 and beyond, we are focused on continuing to apply ESG principles in our investment activity and firm operations.

Please review the Legal Disclaimers for additional information regarding Castlelake’s investment strategies and our commitment to ESG principles.


Signed the United Nations Principles for Responsible Investment (UN PRI) in early 2021 to demonstrate our commitment to integrating ESG principles in our investment decision-making and commit to accountability and transparency.


Broadened ESG due diligence procedures in the underwriting process, creating more in-depth guidance for the analysis of ESG risks and merits of investment opportunities, and aligning our procedures with globally recognized standards and reporting frameworks. Additionally, provided training and guidance for the integration of ESG KPIs and action plans in our investment management process.


Updated our ESG/Responsible Investment Policy to reflect our expanded ESG due diligence and investment management process and the inclusion of an investment exclusions list.


Furthered efforts to increase collaboration among our ESG; Diversity, Equity and Inclusion (DEI); and Employee Engagement & Community Committees through partnership on programming and increased communication.


Strengthened tools and methodologies for calculating and estimating greenhouse gas (GHG) emissions and acquiring key diversity statistics across our portfolios.

A Message From Our CEO

Central to Castlelake’s ethos is a deep commitment to continuous improvement and evolution to meet the needs of those who have entrusted us to manage capital on their behalf. Further, we as global citizens firmly believe we have a broader responsibility to do what is right and be a part of the solution.

Rory O’Neill CEO & Managing Partner

ESG at Work in Our Investment Strategies

At Castlelake, ESG is integrated into our investment process well before we deploy capital. We apply an ESG lens to our diverse investment strategies and structures, identifying and analyzing ESG risk and merits as part of our underwriting and due diligence process. Beginning in 2021, we conducted specialized training for each of our investment teams (Real Assets, Specialty Finance and Aviation) to educate our professionals about evaluating ESG as part of the due diligence and underwriting process and how to use industry-recognized benchmarks and frameworks to assist in this process.

Some of the accepted frameworks we use include the Sustainability Accounting Standards Board Materiality Matrix and the Principles for Responsible Investing, as well as vendor products such as the global ESG business intelligence platform RepRisk for the screening, reporting, assessment and scoring of material ESG risks. We believe these steps, combined with Castlelake’s deep asset expertise, result in a comprehensive view of material ESG factors within our core investment strategies. Risks and merits are recorded in our investment memoranda and actively discussed and debated with investment team leaders and risk management team members in advance of an investment decision. We believe these pre-investment steps result in a stronger understanding of ESG risks and merits within the investments we ultimately make and help to inform our investment strategy going forward as we continually seek to evolve in response to the investment landscape.

As part of our underwriting process, we are also working to ensure ESG risks and merits also translate to action plans and measurable performance indicators established in partnership with operating and joint venture partners, to lay the groundwork for ESG impact.

Below, we discuss ESG at work in our investment strategies—Real Assets, Specialty Finance and Aviation—in more detail.

Real Assets

Castlelake’s Real Assets portfolio encompasses investments and investment opportunities in asset types across North America, South America, Europe, and Asia. These include but are not limited to renewable energy projects, digital infrastructure, transitional real estate and non-performing or sub-performing loans backed by assets. The diversity of these assets presents unique opportunities and challenges to drive ESG impact. In 2021, we focused on formalizing the ESG underwriting process that our investment teams use to evaluate these opportunities and challenges across the many unique assets they analyzed, striving to create a more programmatic approach while accounting for the unique complexity that Castlelake targets.

We have made steady progress in this journey. ESG risks and merits involving climate change and GHG emissions, ecological considerations and water use, community development, and health and safety are considerations that our investment teams address in the underwriting stage as applicable. Upon investment, such considerations are also increasingly incorporated in investment management plans and tracked by our investment operations teams. We highlight how our efforts to date have come to life through our role in the optimizing assets, directing capital and guiding strategy segments within the “ESG Integration in Action” section that follows.

Specialty Finance

An area of focus within Castlelake’s Specialty Finance investment strategy is financing for consumer credit and small- and medium-sized enterprises. Castlelake believes this form of financing offers compelling investment opportunities that intersect with a critical social and economic need. With analytics on more than 30 million credit accounts, we have insight into the persistent need for alternative credit solutions among underbanked individuals and enterprises as banks continue to step back from esoteric risk assets. ESG considerations—particularly of social nature—have and continue to play an important role in our approach to investment in this sector. We complete detailed evaluations of counterparties’ sourcing and marketing practices, product offerings and customer service interactions to seek to deploy capital to experienced, reputable operators. In one example of this detailed in the “ESG Integration in Action” section, Castlelake partnered with a UK-based loan provider to help non-prime individuals working to rebuild their credit.

Our team also conducts considerable governance and compliance due diligence on new operating partners related to responsible lending, data security and privacy standards as we pursue opportunities to invest in consumer credit receivables and small- and medium-sized enterprise finance. We are committed to evaluating opportunities that enable financial access across the income spectrum even after the pandemic subsides.


We believe Castlelake’s extensive experience in aviation investing affords it an opportunity to bring positive ESG impacts to bear. In 2021, we believe we played an active role in the sector’s recovery from the COVID-19 pandemic, helping to sustain the social benefits of global mobility and connection as a liquidity provider, and supporting the industry’s ability to measure and shrink GHG emissions. This year we were proud to participate in the launch of the Aviation Working Group’s carbon calculator, which has helped to provide the industry with a foundational methodology for measuring carbon impact. We believe that measurement is a foundational step in enabling the industry to reach its goals and we look forward to building on this early work in an effort to support the International Air Transport Association’s (IATA) resolution to achieve net-zero carbon emissions by 2050.

We also believe we provided critical liquidity to commercial aviation businesses globally over the past year, helping airlines stabilize their business strategies and take delivery of newer, more fuel-efficient aircraft, enabling key industry participants to chart a course toward a more sustainable recovery. Many of our airline partners are passionate about being a part of the environmental solution by minimizing the carbon footprint of global aviation but were capital constrained as a result of the pandemic and unable to move forward with their plans to migrate fleets toward newer technology. We believe our ability to provide capital solutions helped several airlines advance their goals in that regard. We expect our position in this context to only grow as persistent industry dislocation continues to drive demand for alternative financing. Castlelake expects to leverage this demand to prioritize opportunities to finance the delivery of new, more fuel-efficient aircraft within our investment mandate, which will also further ESG initiatives.

In 2021, Castlelake continued its industry-leading role in shaping the ESG agenda in aviation as it worked to support the sector’s recovery from the COVID-19 pandemic through investments in commercial aircraft and engines. We believe our decades-long experience in aircraft finance, leasing and servicing has allowed us to indirectly support employment opportunities, lower the carbon footprint of the global fleet, and enhance resource efficiency across the industry. As detailed in our 2020 ESG Report, this year we were proud to participate in the launch of the Aviation Working Group’s carbon calculator, which has helped to provide the industry with a standard methodology for measuring carbon impact.

By expanding our aviation lending program, we continued to provide critical liquidity to commercial aviation businesses globally over the past year. We helped airlines stabilize their business strategies and take delivery of newer, more fuel-efficient aircraft, enabling key industry participants to chart a course toward a more sustainable recovery (See Promoting Fuel-Efficient Aircraft Through Aviation Lending). We expect our position in this context to only grow as persistent industry dislocation continues to drive demand for alternative financing. Castlelake will leverage this demand to further ESG initiatives.

ESG Integration in Action

In 2021, we believe that Castlelake investment teams and operating partners successfully integrated several ESG principles across its investment processes. Here, we focused on select investments within our Real Assets strategy that demonstrate how we are able to generate positive ESG results at various stages of the investment and ownership cycle, from improving or facilitating ESG transformations via our asset expertise to steering management teams toward strategically integrating ESG in their long-term business strategies.

We strive to integrate ESG principles into our Real Assets investment practices in ways that balance the highest possible impact with the highest possible value to our stakeholders. As examples of this work, we highlight Castlelake’s efforts to optimize assets, direct capital toward more sustainable initiatives, and guide ESG strategy.

Optimizing Assets

Castlelake’s significant asset experience is central to our value proposition for stakeholders, including both counterparties and investors. Leveraging this throughout 2021, we continued the evolution of a gas-to-liquids and specialty chemicals producer in our portfolio. We allocated funding to expand the producer’s operations and its facilities’ ability to process major pollution sources such as flare gas, methane and industrial carbon dioxide into sustainable specialty chemicals. Enhancements completed in 2021 encompassed both additional environmental controls on existing assets as well as design and engineering for large-scale future assets with carbon capture; this opens the door to the potential future creation of carbon negative products. We are proud to help further the producer’s vision of introducing products that enable a broad range of customers to reach their sustainability goals.

In the theme of optimizing assets, we also point to an investment in a California-based wind farm. This repowering project involved decommissioning and removing a small-scale wind turbine farm near San Francisco and replacing it with more powerful and energy-efficient large-scale turbines. In addition to creating a source of clean renewable energy for California, the project sought to provide greater protection for the area’s Golden Eagle population through the removal of the older turbines and strategic site design. Our team also worked with a local Native American tribe to address concerns around traditional cultural property and hired several local tribesmen to serve as cultural monitors to the project. We were pleased to exit this investment in 2021 to a local utility company. In the years ahead, we look forward to continuing to play a role in providing strategic capital to finance the energy transition through new investments across geographies.

Directing Capital

We recognize that investment managers can play a critical role in directing capital to opportunities that can have a positive ESG impact on our society. At Castlelake, we believe we can marry this role with investment and return objectives by preferring opportunities that generate compelling risk-adjusted rates of return and have a positive ESG impact rather than opportunities without a positive ESG impact. Our investment activity in the hospitality sector in 2021 stands as an example of this. The COVID-19 pandemic has had an outsized impact on the hospitality sector due to ongoing travel restrictions and limited appetite for travel and socialization given health and safety concerns. With little to no revenue coming in from travelers and traditional sources of capital adopting risk-off appetites, hotel operators have become increasingly capital constrained. Our experience investing in real estate assets across the U.S. and Europe, and our experience underwriting global travel via our aviation investment strategy enabled us to act as a liquidity provider in this sector.

With an ESG lens in place, we directed some of our capital to two opportunities that offer distinct environmental and social advantages. The first was an investment in a real estate investment company specializing in high-quality hotels in Spain and Portugal. The company’s strategy is to acquire and reposition hotel assets, breathing new life into existing assets and optimizing operations to maximize their value. Additionally, the company actively targets LEED v4 Gold certification for all assets and supports the revitalization of the affected urban areas by attracting tourism to these areas and enhancing the value of other adjacent properties. The company also has a stated goal of information transparency, clear governance and compliance with legal and contractual obligations. When evaluating the myriad of opportunities to potentially achieve compelling returns in this dislocated sector, we viewed this particular company as also having a higher potential to drive positive ESG impact in the regions where its assets are located and in Europe more broadly.

Similarly, Castlelake identified an opportunity to direct capital to a hotel operator in the U.S. with a strong focus on the wellbeing of guests and positive social and environmental impacts. Through a joint venture agreement with the operator, Castlelake is acquiring and reimagining assets in the west and northwest regions of the U.S. into attractive destinations for the socially and environmentally conscious traveler. Features of the hotels include the use of environmentally-friendly design and construction materials; the use of earth-friendly cleaning products; locally sourced food, supplies, and services; solar arrays, low-energy and low-flow fixtures, and water-efficient native landscaping; and limited use of plastics. Additionally, the operator seeks to give back to the community through partnerships with regional organizations. With each reservation made at any of the operator’s hotels, the operator provides a donation to further the missions of these organizations, which range from seaside restoration to adolescent mental health training. These examples demonstrate the intersection of our investment mandate and ability to drive positive ESG impact. We are excited to explore similar opportunities in other markets in the years ahead.

Guiding Strategy

Similar to Castlelake’s significant asset experience, a commitment to seeking control within our investment criteria often enables us to influence the strategic direction of our investments. Castlelake was pleased to support two green bond projects through its majority shareholder positions in a large Spanish homebuilder and a Greek real estate investment company in 2021. We believe these projects enabled us to help influence the strategic direction of these sizable companies toward efforts to improve environmental impact.

According to S&P Global Ratings, the Spanish homebuilder’s green financing framework aligns with the four components of both the Green Bond Principles and the Green Loan Principles. These include a commitment by the borrower to allocate the full amount of the net proceeds of loans and bonds to eligible green projects; to use clear green criteria to select projects for funding; to manage and track proceeds; and to report regularly on the environmental impact and use of proceeds. Ultimately, we believe Castlelake’s influence on the direction of the company and support for ESG principles, coupled with the company’s position as one of the largest homebuilders in Spain, will help contribute to the transition of housing developers and real estate companies to a low-carbon economy through measures that reduce natural resource consumption and shrink environmental footprints.

In the past year, Castlelake also expanded its partnership with a real estate company with the largest Class A commercial office property portfolios in Greece and a longstanding commitment to positively impacting the environment and community through its work. Since 2016, the real estate company has undertaken a campaign to improve infrastructure and upgrade important socially-oriented properties within its portfolio. In 2021, it issued a green bond to finance or refinance a portfolio of projects focused on enhancing energy efficiency within the Greek real estate market. Castlelake’s role as a majority shareholder in the company enabled us to provide support for the issuance of the green bond and the company’s plans for executing on these ESG-oriented projects.

Case Studies

In this year’s ESG report, we’re showcasing projects that demonstrate how Castlelake integrated ESG in its Specialty Finance and Aviation investment strategies. These case studies show how we helped underbanked consumers and small businesses in the UK access credit and provided liquidity to a large commercial airline to transform its fleet with newer and more fuel-efficient aircraft.

Providing Consumers with Access to Credit in a Conscientious Manner

Enabling Access to Financing for UK SMEs

Promoting Fuel-Efficient Aircraft Through Aviation Lending

Broadening and Deepening Diversity, Equity and Inclusion at Castlelake

In 2021, we continued to work toward making Castlelake a more diverse and inclusive firm and to further embed diversity, equity and inclusion (DEI) principles into our culture, operations, hiring practices and investment processes. In our efforts to weave DEI principles through our daily fabric, we focused on employee work-life benefits, sourcing and hiring practices, employee engagement programming and third-party partnerships.

Sourcing and Hiring Practices

Castlelake widened our talent sourcing efforts and reviewed our recruitment partners to ensure we are finding top-tier talent in non-traditional areas of the industry as well as individuals with diverse backgrounds and experiences. We forged a partnership with 10,000 Black Interns—a UK-based initiative committed to placing Black students and recent graduates into internships at investment management firms—providing high-caliber young professionals with opportunities to complete summer internships in Castlelake’s London office.

We also conducted training among our hiring managers to enhance the objectivity of our interview evaluations. In addition, the HR team continues to review compensation data across the firm to ensure pay parity by gender and ethnicity.

This year, Castlelake launched a mentoring program that lets junior talent learn from senior professionals and vice versa, by pairing individuals at different seniority levels for regular conversations and meetings. We also hold employees accountable for creating an inclusive environment during our Annual Performance Review process, asking each individual to memorialize the ways in which they contributed to inclusion across the firm.


Beyond policies, we’re thinking about partnerships in new ways. Across the firm, employees are encouraged to contribute to organizations aimed at improving diverse representation within the private equity industry. We provide opportunities to support and engage with organizations such as Level 20, Gender Ideal, Women’s Association of Venture & Equity (WAVE) and Private Equity Women Investor Network (PEWIN), 10,000 Black Interns and OUT Investors.

In addition, in 2021 we partnered with an external consultant on a substantial culture research project that included an in-depth, third-party study of Castlelake employees’ unfiltered thoughts on the firm’s culture. Nearly 80% of our team participated in the survey, ensuring a broad perspective. Our leadership team, and subsequently all employees, reviewed and analyzed the results, which informed adjustments we are now making to help us sustain our culture and all that it might offer from a DEI perspective, with greater intentionality.

Diversity in the Investment Process

Castlelake is also implementing DEI principles into our investment strategy, believing that adding people with diverse backgrounds and ways of thinking to management teams leads to better investment outcomes. To establish baselines and track progress on this front, we’ve developed a standardized diversity measurement dataset and embedded it within the accounting and reporting systems that Castlelake’s operating partners use to provide certain data to our firm. Leveraging the Brook Graham scoring system, an industry-recognized framework for measuring statistical information about employees, we are asking our operating partners about the number of employees including the gender identity of employees, the ethnic makeup of the employee base and the stratification of management. Although one standard approach is likely not sufficient to address the myriad of investments within our broader portfolio, we expect this reporting process to provide us with more clarity around the challenges and opportunities we face as an investment manager.

Committing to Diversity in Action

Castlelake has signed the private equity trade association Institutional Limited Partners Association’s (ILPA’s) Diversity in Action initiative, which brings together limited partners and general partners focused on improving DEI across the industry. In signing, we’re committed to collaborating on and using a framework to advance DEI principles at our firm and throughout the private equity space. More specifically, this initiative commits Castlelake to undertake actions drawn from ILPA’s diversity and inclusion roadmap that are designed to cover such spheres as talent and investment management and industry engagement. We expect these best practices to help us enhance our own DEI efforts and programs and look forward to adhering to consistent reporting frameworks to disclose them.

Castlelake remains committed to finding and developing new and effective ways to become a more diverse and inclusive firm that actively seeks out and welcomes talented individuals with different backgrounds, experiences and perspectives. We know our work on this front will be ongoing and we strive each year to improve on these efforts.

Employee Engagement

Castlelake gives members of our global team the opportunity to drive change by participating in various committees, including our ESG Committee, DEI Committee and Employee Engagement and Community Committee (EECC). In 2021, these committees partnered to design programming that allowed our broader team to enact positive change in entertaining and enjoyable ways. Through formal and informal collaboration, we developed a robust agenda of activities and events that encouraged employee participation across office locations, experiences, and backgrounds. Our agenda included book clubs, focus groups, communications campaigns, social events, philanthropic drives and new partnerships with third-party organizations.

One event, a panel of female team members held in honor of International Women’s Day, focused on women’s experiences at Castlelake and as working professionals more broadly. More than 110 individuals attended the panel, which included an engaging conversation on the issues, obstacles, and opportunities women face. Building on this experience, we are conducting focus groups to dive deeper into the challenges the discussion revealed and how we can address them in an inclusive manner.

Other activities included a book club featuring Black authors in recognition of Black History Month and a webinar led by the group OUT Investors.

Work-Life Benefits

In addition to robust benefits, Castlelake has looked for new ways to enhance the employee experience in light of the ongoing COVID-19 pandemic and as we deepen our understanding of employers’ roles in the lives of our team members. As an example, we have identified opportunities to strengthen our support for families by increasing paid parental leave. We also believe that enabling our team members to spend time away from the office is essential to ensuring their work at Castlelake is conducive to cultivating healthy, balanced whole selves. For this reason, we encouraged employees to take additional paid days off during the year and use volunteer time off allotments to give back to the community.

Corporate Social Responsibility and Philanthropy

Our Employee Engagement and Community Committee (EECC) in 2021 continued to form meaningful partnerships with organizations across the U.S., Europe and Asia in its effort to support social good initiatives that aligned with Castlelake’s founding principles. Here are some of the highlights.

Event Participation

Pieta House Darkness into Light Walk

Castlelake team members participated virtually in the Pieta House Darkness into Light Walk on May 8, jumpstarting our programming for Mental Health Awareness Week. The 5-kilometer walk raised funds for Pieta, an Irish charity that helps people suffering from suicidal distress or engaging in self-harm.

Firm donations

Firefighters for Healing

Since 2019, Castlelake has partnered with Firefighters for Healing, an organization that supports burn survivor patients and helps firefighters and other first responders suffering from line-of-duty injuries or medical diagnoses. In 2021, Castlelake donated $15,000 to their cause.

Castlelake events

MATTER Box Packing Events

Castlelake’s EECC hosted a series of box-packing activities in Minneapolis over the course of the year with our partner, MATTER, a Minneapolis-based nonprofit organization. In 2021, Castlelake packed 68 kits of healthy and nutritious non-perishable foods in snack boxes, or 3,400 meals for the community.

Firm Donations

Magnolia Cup Horse Sponsorship

Castlelake sponsored a horse in the Magnolia Cup Ladies’ Day race, an event hosted by The Goodwood Group and Markel International which brought together 10 remarkable women. The race raised more than £230,000, a record-breaking amount, for Smart Works Charity.

Firm donations

Footprint Project

Castlelake supports Footprint Project, a solar generator non-profit organization working to provide cleaner energy for communities in crisis. In 2021, Castlelake donated $20,000 to help Footprint Project gain momentum and provide financial backing for the founder to focus on this 501(c)(3) full-time.

Event Participation

Little Lumpy Cycling Sportive

Last August, Castlelake team members cycled up to 100 miles across England’s countryside to complete this inaugural bicycle event. The nonprofit ride raised money for the Haslemere Festival and the Haslewey Community Centre, which provide community services and essential items to local individuals in need.

Firm donations

Orbis/Airlink Partnership

Castlelake in 2021 donated $30,000 to the aviation and logistics charity Airlink, which helps organize transport for relief workers and emergency supplies to disasters and other humanitarian crises around the globe. In addition, we donated 7000SGD to Orbis, an organization that works to prevent and treat blindness, and $3,000 to Airlink for COVID-19 relief efforts.

ESG Governance and Resources

For more information about Castlelake's ESG Committee and ESG Policy, please login to the Investor Portal, or contact

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