Corporate Responsibility

Positive Social and Environmental Impact

Our company strives to make a big difference by focusing on the main ways we can improve both people’s lives and our planet. For us that means:

By focusing on the ways we can have the most powerful positive impact we can not only can do more good, we can do it sustainably for our shareholders and show leadership to our stakeholders.

Through our property, infrastructure and residential lending investments, we provide capital that helps deliver solutions to important environmental and social challenges.

In 2015, Starwood Property Trust began making investments in affordable housing multifamily communities which provide rent restricted housing to low income families.

In 2021, STWD established its first affordable housing fund, in which it owns a 79.4% interest. The assets in the fund consist of 15,057 rent-restricted multifamily units, providing housing for an estimated 40,000 residents.

The majority of STWD’s owned real estate portfolio is in rent-restricted multifamily properties, making STWD a top 10 owner of affordable housing in the United States. In each affordable housing community held by the fund, Starwood Property Trust has preserved all in-place affordability restrictions. 98% of these homes are occupied by households earning 60% or less of the household median income of each respective property’s region.

In addition to affordable rents, Starwood Property Trust provides support services to residents such as Soldiers for Scholar program, which offers free rent, utilities, and maintenance to military veterans who are obtaining a college degree; and free transportation to medical and retail destinations at seniors-only communities.

Energy Certified Lending Investments

Within our Commercial Real Estate Lending portfolio we finance a significant amount of assets that currently have or are seeking energy certifications.

• Starwood Property Trust’s Commercial Real Estate Lending portfolio included $3.8B of loans where the underlying asset has or is seeking an energy certification. This represents 24% of our CRE Lending portfolio.

Through our infrastructure lending platform, since 2018, we have financed nearly $840+ million of renewable energy assets, including wind, hydro, solar and geothermal projects.

Since 2018, our renewables portfolio generated over 11,200 Gigawatt hours, avoiding approximately 11.2M tons of CO2 emissions.

Our residential lending business, which has deployed $13.4B of capital since 2016, provides mortgages to high-quality borrowers who would otherwise struggle to secure access to housing credit.

These borrowers often have significant financial assets, but they don’t fit a traditional lending model (e.g. small business owners, contractors, and other members of the ‘gig economy) but still have strong credit profiles.

Support Principles of Responsible Investing

Starwood Property Trust’s manager, Starwood Capital Group, became a signatory to the United Nations supported Principles for Responsible Investment (PRI) in 2019.

The PRI provides a framework, through its six principles, for consideration of environmental, social and governance (“ESG”) factors in portfolio management and investment decision-making. The six principles ask an investment manager, to the extent consistent with its fiduciary duties, to seek to: (1) incorporate ESG issues into investment analysis and decision-making processes; (2) be an active owner and incorporate ESG issues into its ownership policies and practices; (3) obtain appropriate disclosure on ESG issues by the entities in which it invests; (4) promote acceptance and implementation of the PRI principles within the investment industry; (5) work to enhance its effectiveness in implementing the PRI principles; and (6) report on its activities and progress toward implementing the PRI principles.

As a signatory through our affiliation with Starwood Capital Group, Starwood Property Trust commits to upholding all six principles.

SASB & TCFD Indices

Our commitment to sustainability.

To further our commitment to sustainability, we have aligned our ESG disclosures with market-leading frameworks SASB (Sustainability Accounting Standards Board) and TCFD (Task Force on Climate-related Financial Disclosures). STWD has identified the Mortgage Finance, Real Estate, and applicable portions of the Asset Management & Custody Activities and Commercial Bank Sector Standards as most relevant to our business, as well as TCFD alignment which highlights our climate-related considerations for the organization.

SASB/TCFD PDF INDICES > SASB/TCFD EXCEL INDICES >

Business Conduct and Ethics

Supported by unwavering management commitment and engaged Board oversight, we operate our business with a demonstrated commitment to the highest level of ethical conduct. This commitment is reinforced by strong policies and practices related to fair, ethical and honest business dealings, robust governance, and compliance with applicable laws.

We set high ethical standards for our Company and partners that help us deliver best-in-class performance. We regularly review and update, as appropriate, our policies governing ethical conduct and responsible behavior in order to support our sustainable and continued success.

Starwood Property Trust has established a Code of Business Conduct and Ethics to demonstrate the Company’s commitment to conduct its business in accordance with all applicable laws and regulations and in accordance with the highest standards of business ethics.

Code of Ethics

We believe that our success is largely predicated on the quality of the Company’s reputation and on our ability to exhibit integrity, uphold strong ethical standards, engage in principled business conduct and foster a culture that respects the rights and dignity of our employees.

The Code confirms, among other things:

• The prohibition of certain activities which could result in actual or potential conflicts of interest, including insider trading
• The prohibition of bribery
• The prohibition of facilitation payments
• Starwood’s Gifts and Entertainment Policy
• Starwood’s Political Contributions Policy

All employees are required to undertake Code of Business Conduct and Ethics training annually, or whenever there are changes to key provisions or updates.

Starwood Property Trust employees are encouraged to share any ethics or compliance concerns with Company Counsels. Starwood partners with EthicsPoint, an external third-party supplier, to provide a web- and telephone-based confidential reporting system. All reports are addressed promptly and thoroughly.

The Company strictly prohibits any retaliation against any employee who in good faith reports any violation of this Code or of any of the Company’s policies.

Risk Management

Our risk management framework is intended to facilitate a holistic, enterprise wide view of risk that supports a strong and collaborative risk management culture across the firm.

We maintain a risk management framework that defines both the level and types of risk that we are willing to take in order to achieve our business objectives. Our risk culture seeks to ensure that key risks are highlighted, evaluated and managed appropriately.

We are subject to a variety of risks due to the nature of the businesses that we operate. The objective of our risk management framework is to identify, measure, monitor and control the key risks to which we are subject. Risk categories include: Capital, Liquidity & Funding, Investment & Market, Counterparty, Operational, Compliance, Regulatory & Legal and Credit.

The Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management at Starwood Property Trust. In its risk oversight role, the Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. To do this, the Chairman of the Board of Directors meets regularly with management to discuss strategy and risks facing the Company. Senior management attends the Board of Directors meetings and is available to address any questions or concerns raised by the Board of Directors on risk management and any other matters. The Chairman of the Board of Directors and non-executive members of the Board of Directors work together to provide strong, independent oversight of the Company’s management and affairs through its standing committees and, when necessary, special meetings of Independent Directors.

Audit Services is an independent function with reporting lines to the Board Audit Committee. Audit Services is responsible for performing our internal audit activities, which includes independently assessing and validating key controls within the risk management framework.

Starwood Property Trust maintains corporate compliance and internal audit functions headed by our Chief Compliance Officer and our Chief Audit Officer, who have reporting lines to the Board Audit Committee. The Corporate Compliance Group is responsible for the oversight of the Company’s regulatory compliance.

Environmental Risk Management

Through our commercial real estate lending business, we evaluate all environmental risks associated with any investment as part of the underwriting process. Starwood Property Trust has a formal Scope of Work which requires:

• A Phase I environmental site assessment (ESA), utilized to identify environmental conditions that may have a material adverse impact on the property being assessed or its immediate surrounding area
• An assessment of a property’s sustainability and marketability through the review of characteristics including, but not limited to, LEED certification, tenant amenities such as bike storage and repair facilities, neighborhood walkability ratings, and electric car charging stations
• Periodic property site visits which include physical inspection of the assets, including environmental considerations

The senior underwriter on the transaction has responsibility to ensure that the Scope of Work is followed.

Environmental assessments are undertaken by third party experts who analyze and provide their opinions on environmental risks. The third party experts are selected based on their experience with conducting environmental site assessments, national recognition, and a consistent track record of providing a high quality product that is generally well-received by Starwood, other lenders, rating agencies, and investors that rely on these reports. It is Starwood’s intent to obtain a consistent level of reporting and standard formatting from a specific list of approved consultants.

Carbon Footprint

As part of our corporate environmental sustainability plan, we measure the carbon footprint of our corporate operations annually and seek to reduce the environmental impact of our corporate operations through the implementation of energy use efficiency, water conservation, and waste management initiatives. We offset the unabated portion of our carbon footprint through carbon offsets and other measures.

Reducing Environmental Impact

In our owned real estate portfolio, we have undertaken several initiatives focused on energy efficiency and costs savings.

We have implemented a third party utility tracking platform that allows for efficient monitoring of water and electricity usage across our portfolios in order to identify opportunities to reduce waste and improve efficiencies. This product is maintained by Starwood’s property management and asset management teams.

We have partnered with a third party to conduct portfolio analysis and implement water conservation solutions through capital investment in more efficient bathroom and kitchen fixtures, reducing water usage by 42% on average where installed, and realizing average water bill savings of $20 million in 2023

Human Capital

We are a company of approximately 350 professionals across nine offices in Atlanta, Charlotte, Greenwich, New York, Miami, London, Los Angeles, San Francisco and Stamford. We offer a challenging, fast-paced yet collegial environment developed through teamwork and close working relationships with the Company’s management team.

~350

professionals

9

office locations

Competitive compensation, outstanding benefits and a stimulating work environment help us to attract and retain people with exceptional financial and real estate skills, a key strength of our Company.

Compensation and Benefits

We offer competitive compensation, including a discretionary, performance-based bonus program, available to over 80% of our employees.

We offer the following non-compensation benefits to 100% of employees:

• Medical, prescription, dental and vision insurance for all employees and their families
• 401(k) plan with company match incentive
• Subsidized life and disability insurance
• Paid time off for holidays, personal days, and vacation
• Gym subsidies, annual health screenings, flu shots
• Matching charitable contributions
• Education assistance programs
• Commuter Subsidy programs

We also offer a full-time, paid 8-week summer internship program.

Retention and Satisfaction

We support our colleagues’ professional development and long-term career growth. We recognize and reward colleagues who perform well, and are committed to promoting internal talent wherever possible.

• Approximately 30% of job openings are filled internally. It is a goal of our training and development investments to grow this number over time.
• ~20% of employees have a tenure of 15+ years.

We conduct regular Pulse Surveys to “take the pulse” of a large segment of employees to see how they feel about the Company, their work, our improvement progress and more.

All employees participate in our annual, and mid-year reviews which cover 11 different performance metrics, and allow employees and managers to cover goals, development opportunity, strengths, and weaknesses.

We offer a number of training opportunities, including specific professional designations (Certified Public Accountant, Chartered Financial Analyst, Continuing Legal Excellence credits) and management and leadership training programs including:

• Women in Leadership Training
• Individualized manager training and leadership development
• 1 on 1 coaching
• Analyst Rotation Program

On average, 10-20% of employees participate in some form of management and leadership training programs each year.

Our Human Resources function regularly monitors and reviews employee turnover and shares that data and analysis with senior leadership to inform our human capital strategy going forward.

We strive to create diverse and inclusive workplaces where all employees can perform to their full potential.

Programs we have developed to bring diverse people together to share experiences and innovative ideas, and to support diverse talent, include:

• Mentoring initiatives
• Affinity groups
• Targeted college recruitment programs

Starwood maintains an anti-workplace harassment/discrimination policy, and mandatory work-place harassment/discrimination training for 100% of employees.

Our Human Resources function regularly monitors and reviews employee demographic data.

Community Involvement

We strive to be a good corporate citizen for our community by supporting charitable organizations that promote education and social well-being and by encouraging our employees to contribute to organizations that are meaningful to them.

Our Company is proud to support charities such as the United Way Campaign and the Best Buddies annual walk. In addition, our employees have completed beach cleanups, various food/school supply drives, volunteered at a shelter serving food for Thanksgiving with the help of the Chapman Partnership, hosted a career day with the help of Breakthrough Miami, fundraised/donated to the Make-a-Wish foundation of Southern Florida, Big Brothers Big Sisters of NYC, the Lymphoma Research Foundation, the Children’s Fund for Glycogen Storage, the Commonwealth Institute, Hope for Haiti, and the Special Olympics of NY and CT.

Sustainable Finance Framework

Starwood Property Trust has developed a Sustainable Finance Framework, which allows us to raise capital to issue a number of green- and social- focused financial products. Through this Framework, we will advance our firm’s sustainability strategy and goals by investing in projects that may contribute to reducing the carbon footprint of our portfolio, improving overall energy and water efficiency, and supporting affordable housing projects. Please refer to the Framework for a full description of potential projects and impact metrics. ISS has provided a second-party opinion (SPO), which found that the Framework is aligned with ICMA’s Green and Social Bond Principles (GBP and SBP) and Sustainability Bond Guidelines (SBG), in addition to LMA’s Green and Social Loan Principles (GLP and SLP).

STWD Sustainable Finance Framework SPO 2022 > STWD Sustainable Finance Framework 2022 >

Sustainable Bond Allocation Report

Starwood Property Trust utilizes the net proceeds from Sustainable Bonds to invest in eligible projects with an intention of reducing our portfolio’s environmental footprint, and generating positive environmental and social impacts.

External Review > STWD GREEN BOND ALLOCATION REPORT >