We invest in climate solutions developed or sponsored by leading companies in the energy efficiency, renewable energy and other sustainable infrastructure markets.
−Removed: We believe that we are one of the first U.S.
−Removed: public companies solely dedicated to climate solution investments.
+Added: We believe that we were one of the first U.S.
+Added: public companies solely dedicated to climate solutions.
Our goal is to generate attractive returns from a diversified portfolio of project company investments with long-term, predictable cash flows from proven technologies that reduce carbon emissions or increase resilience to climate change.
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• Water and Stream Distribution Systems
−Removed: • Storm Water Management
+Added: • Clean Fleet Transportation
• Nature Based Solutions and Environmental Credits
+Added: • Storm Water Management
+Added: • Renewable Natural Gas
• Other Climate Related Technologies
We are internally managed, and our management team has extensive relevant industry knowledge and experience.
−Removed: We have long-standing relationships with the leading energy service companies (“ESCOs”), manufacturers, project developers, utilities, owners and operators, which provide recurring, programmatic investment and fee-generating opportunities.
+Added: We have long-standing relationships with the leading energy service companies (“ESCOs”), manufacturers, project developers, utilities, owners and operators that provide recurring, programmatic investment and fee-generating opportunities.
Additionally, we have relationships with leading commercial and investment banks and institutional investors from which we are referred additional investment and fee-generating opportunities.
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We have a large and active pipeline of potential new opportunities that are in various stages of our underwriting process.
+Added: We believe the Inflation Reduction Act signed into law on August 16, 2022, that incentivizes the construction of and
+Added: investment in climate solutions will result in additional investment opportunities in the markets in which we invest over the next several years, which may result in increases in our pipeline in the future.
We refer to potential opportunities as being part of our pipeline if we have determined that the project fits within our climate solutions investment strategy and exhibits the appropriate risk and reward characteristics through an initial credit analysis, including a quantitative and qualitative assessment of the opportunity, as well as research on the relevant market and sponsor.
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In 2020, we joined the Partnership for Carbon Accounting Financials (“PCAF”), a global financial industry-led partnership to implement a consistent and transparent disclosure framework to report carbon emissions and avoided emissions resulting from financed assets.
−Removed: We anticipate that our reporting in accordance with PCAF will be implemented by 2023.
+Added: We began to report in accordance with PCAF in 2022.
For further information on our ESG disclosures, see the discussion in the sections titled “Investment Strategy” and “Environmental and Social Responsibility and Corporate Governance” herein.
−Removed: We are committed to providing transparent disclosures on our human capital management, which can be found herein in the section titled “Human Capital Strategy.” In 2021, we founded the Hannon Armstrong Foundation, which provides cash and in-kind support to programs that align with our philanthropic priorities of ensuring equal access to climate solutions, empowering and creating opportunity for marginalized individuals and communities, and creating a local impact.
+Added: We are committed to providing transparent disclosures on our human capital management, which can be found herein in the section titled “Human Capital Strategy.” In 2021, we founded the Hannon Armstrong Foundation, which provides monetary and non-monetary support to programs that align with our philanthropic priorities of ensuring equal access to climate solutions, empowering and creating opportunity for marginalized individuals and communities, and creating a local impact.
We elected to be taxed as a REIT for U.S.
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• Grid-Connected (“GC”) :
−Removed: projects that deploy cleaner energy sources, such as solar and wind to generate power where the off-taker or counterparty is part of the wholesale electric power grid;
+Added: renewable energy projects that deploy cleaner energy sources, such as solar, solar-plus-storage, and wind, to generate power production where the off-taker or counterparty may be part of the wholesale electric power markets;
• Sustainable Infrastructure (“SI”):
−Removed: upgraded transmission and distribution systems, water and storm water infrastructure, and other projects that improve water or energy efficiency, increase resiliency, positively impact the environment or more efficiently use natural resources.
+Added: upgraded transmission and distribution systems, water and storm water infrastructure, transportation fleet enhancements, renewable natural gas plants, and other projects that improve water or energy efficiency, increase resiliency, positively impact the environment or more efficiently use natural resources.
Of our pipeline, 42% is related to BTM assets and 45% is related to GC assets, with the remainder related to SI.
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• real estate, such as land or other assets leased for use by GC projects typically under long term leases.
−Removed: Our equity investments in renewable energy and energy efficiency projects are operated by various renewable energy companies or by joint ventures in which we participate.
+Added: Our equity investments in climate solutions projects are operated by various renewable energy companies or by joint ventures in which we participate.
These transactions allow us to participate in the cash flows associated with these projects, typically on a priority basis.
Our energy efficiency debt investments are usually assigned the payment stream from the project savings and other contractual rights, often using our pre-existing master purchase agreements with the ESCOs.
−Removed: Our debt investments in various renewable energy or other sustainable infrastructure project companies or portfolios of project companies are in many cases secured by the installed improvements, or other real estate rights.
+Added: Our debt investments in various renewable energy or other sustainable infrastructure projects or portfolios of projects are generally secured by the installed improvements, or other real estate rights.
We also own, directly or through equity investments, land that is leased under long-term agreements to renewable energy projects where our investment returns are typically senior to most project costs, debt, and equity.
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Government or the International Energy Administration to an estimate of a project’s energy production or savings to compute an estimate of metric tons of carbon emissions avoided.
−Removed: We estimate that our investments originated in 2021 will reduce annual carbon emissions by approximately 0.8 million metric tons, equating to a CarbonCount of 0.50.
+Added: We estimate that our investments originated in 2022 will reduce annual carbon emissions by over 600 thousand metric tons, equating to a CarbonCount of 0.35.
In addition to carbon, we also consider other environmental attributes, such as water use reduction, stormwater remediation benefits and stream restoration benefits.
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We believe we have available a broad range of financing sources as part of our strategy to fund our investments in climate solutions.
−Removed: We may finance our investments through the use of non-recourse debt, recourse debt or equity and may also decide to finance such transactions through the use of off-balance sheet securitization structures.
+Added: We may finance our investments through the use of non-recourse debt, recourse debt or equity and may also finance such transactions through the use of off-balance sheet securitizations or syndication structures.
When issuing debt, we generally provide the estimated carbon emission savings using CarbonCount.
−Removed: In addition, certain of our debt issuances meet the environmental eligibility criteria for green bonds as defined by the International Capital Markets Association’s Green Bond Principles, which we believe makes our debt more attractive for many investors compared to such offerings that do not qualify under these principles.
−Removed: We plan to raise additional equity capital and continue to use fixed and floating rate borrowings, which may be in the form of short-term commercial paper issuances, revolving credit facilities, term loans, repurchase agreements, and public and private debt issuances as a means of financing our business.
−Removed: We also expect to use both on-balance sheet and off-balance sheet securitizations.
+Added: In addition, certain of our debt issuances meet the environmental eligibility criteria for green bonds as defined by the International Capital Markets Association’s Green Bond Principles, which we believe makes our debt more attractive for certain investors compared to such offerings that do not qualify under these principles.
+Added: We plan to raise additional equity capital and continue to use fixed and floating rate borrowings, which may be in the form of short-term commercial paper issuances, revolving credit facilities, term loans, repurchase agreements, and public and private debt issuances, including convertible debt and off-balance sheet securitization structures, as a means of financing our business.
We may also consider the use of special purpose entities or funds in which outside investors participate to allow us to expand the investments that we make or to manage our Portfolio diversification.
−Removed: The decision on how we finance specific assets or groups of assets is largely driven by market conditions including the overall interest rate environment, prevailing credit spreads and the terms of available financing.
−Removed: During periods of market disruption, certain sources of financing may be more readily accessible than others which may impact our financing decisions.
+Added: The decision on how we finance our business is largely driven by market conditions including the overall interest rate environment, prevailing credit spreads and the terms of available financing.
+Added: During periods of market disruption, certain sources of financing may be less accessible than others which may impact our financing decisions.
Over time, as market conditions change, we may use other forms of financial leverage in addition to these financing arrangements.
−Removed: Although we are not restricted by any regulatory requirements as to the type or amount of financial leverage we may use, we do seek to, but are not required to, operate within certain metrics, including maintaining a financial leverage ratio, defined as the ratio of debt to equity, at or below 2.5 to 1.
−Removed: In addition, our board of directors (our “Board”) has established a current target range for our percentage of fixed rate debt to total debt of between 75% and 100%.
+Added: Although we are not restricted by any regulatory requirements as to the type or amount of financial leverage we may use, our Board has established a target limit of our leverage ratio, defined as the ratio of debt to equity, of at or below 2.5 to 1, and a target range for our percentage of fixed rate debt to total debt of between 75% and 100%, allowing for percentages as low as 70% on a short term basis if we intend to repay or swap floating rate borrowings in the near term.
See additional discussion in “Item 7.
Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Liquidity and Capital Resources” regarding our ongoing evaluation of our leverage limits and fixed-rate debt targets.
−Removed: For those transactions that we choose not to hold on our balance sheet, we transfer all or a portion of the economics of the transaction, typically using securitization trusts, to institutional investors in exchange for cash and/or residual interests in the assets and in some cases, ongoing fees.
+Added: In our off-balance sheet financings, we transfer all or a portion of an investment to a securitization trust in exchange for cash and/or residual interests in the trust, and in some cases, ongoing fees.
The availability of securitization counterparties has remained high throughout various market cycles due to investor demand for high credit quality, long-term climate-positive investments.
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Our culture is focused on hiring and retaining highly talented employees with diverse backgrounds and empowering them to create value for our stockholders, and our success is dependent on employee understanding of and investment in their role in that value creation.
−Removed: Our employees are responsible for upholding our purpose, values, strategy, and talent leadership expectations.
+Added: Our employees are responsible for upholding our vision, purpose, and values.
It is important to us that our employees are engaged in our mission of sustainability because we believe engagement improves their performance, as well as our employee recruitment and retention.
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We also meet no less than quarterly as a Company to provide information to employees on our mission, strategic planning and financial results.
−Removed: We continuously evaluate our employees’ level of engagement through in-person meetings or remote one-on-one check-in calls that include asking open-ended questions and through formal surveys or similar tools administered on a periodic basis.
+Added: We continuously evaluate our employees’ level of engagement through in-person or remote meetings that include asking open-ended questions and through formal surveys or similar tools administered on a periodic basis.
We adhere to a blended learning approach with the understanding that our people learn from experiences (on the job and in life), from other people (mentors or supportive managers), and from formal learning and training programs.
We acknowledge that learning is highly individualized and needs to be offered in a way that is most conducive to a specific learner’s needs.
−Removed: We run a periodic education series that includes internal and external speakers presenting topics of interest that are relevant to our employees.
+Added: We run a periodic education series that includes internal and external speakers presenting topics of interest that are relevant to our
We provide multiple learning solutions that cover a wide range of areas such as diversity, equity, and inclusion training, leadership skills, financial knowledge, technology training, and presentation skills.
−Removed: We also support the pursuit of
−Removed: advanced certifications and degrees in areas including business, science and engineering, and liberal and fine arts and employ formal and informal coaching arrangements.
+Added: We also support the pursuit of advanced certifications and degrees in areas including business, science and engineering, and liberal and fine arts and employ formal and informal coaching arrangements.
We care about our employees’ employment experience and recognize them as individuals who are motivated in different ways.
−Removed: Managers hold performance conversations with their employees on a periodic basis (targeting a minimum of twice a year) to ensure they receive the performance feedback they deserve, and to allow managers to obtain insight into how to support the development of their staff, and to ensure that performance expectations are clear and aligned with the overarching objectives of the Company.
+Added: Managers hold performance conversations with their employees on a periodic basis to ensure they receive the performance feedback they deserve, and to allow managers to obtain insight into how to support the development of their staff, and to ensure that performance expectations are clear and aligned with the overarching objectives of the Company.
We also provide continuous dialogue in between these formal touchpoints.
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We compensate our employees according to our fair remuneration policies and believe in paying for performance.
−Removed: Therefore, employees generally receive a portion of their compensation in the form of annual bonuses as well as equity grants which are both tied in part to the Company’s financial performance.
−Removed: We encourage our employees to contribute their time to support various community and charitable activities and sponsor several local community organizations with a primary focus on organizations addressing issues around environmental and social justice.
+Added: Therefore, employees typically receive a portion of their compensation in the form of annual bonuses as well as equity grants which are both tied in part to the Company’s financial performance.
+Added: We encourage our employees to contribute their time to support various community and charitable activities and contribute to local community organizations with a primary focus on organizations addressing issues around environmental and social justice.
In addition to competitive base salaries, cash bonuses, and equity participation for most employees, we are committed to continuously evaluating and ensuring the competitiveness of our benefits offerings so that we meet the various needs of our employees and their families.
Despite a healthcare environment that is facing rising costs, we continue to pay substantially all of the cost of our employees’ healthcare insurance.
−Removed: Further, in addition to what we believe to be market total rewards benefits, we provide additional benefits, such as on-site influenza and COVID-19 vaccination clinics and a tuition reimbursement program.
+Added: Further, in addition to what we believe to be market total rewards benefits, we provide additional benefits, such as on-site seasonal vaccination clinics, back-up childcare solutions, and a tuition reimbursement program.
We take a values-driven, broad view of diversity, equity, and inclusion.
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Decisions regarding staffing, selection, and promotions are made on the basis of individual qualifications related to the requirements of the position.
−Removed: We are committed to identifying and developing the talents of our next generation of leaders.
+Added: We are committed to identifying and developing the next generation of leaders.
We endeavor to select qualified individuals from a diverse pool of candidates derived from broad outreach efforts when we are recruiting.
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We have also adopted policies focused on minimizing the environmental impact of our operations.
−Removed: Through our membership in the Net Zero Asset Managers Initiative, we are pleased to participate in the Glasgow Financial Alliance for Net Zero, which brings the financial sector together to accelerate a shared commitment to decarbonizing
−Removed: the global economy.
+Added: Through our membership in the Net Zero Asset Managers Initiative, we are pleased to participate in the Glasgow Financial Alliance for Net Zero, which brings the financial sector together to accelerate a shared commitment to decarbonizing the global economy.
In 2021, we established targets for our transition to net-zero carbon emissions by 2050 using the foundational framework developed by the Science Based Targets Initiative.
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• we have a lead independent director of the Board that convenes and chairs executive sessions of the independent directors to discuss certain matters without management or the chairman present;
−Removed: • four of our directors qualify as an “audit committee financial expert” as defined by the Securities and Exchange Commission (the “SEC”);
+Added: • effective March 1, 2023, we have separated the executive chairman and chief executive officer roles as discussed in Item 9B of this Form 10-K;
+Added: • three of our directors qualify as an “audit committee financial expert” as defined by the Securities and Exchange Commission (the “SEC”);
• three of our directors (including our lead independent director) are women and one of our directors is a person of color constituting 33% and 11% respectively, of our Board in furtherance of our board diversity policy;
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Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations - Environmental Metrics”.
−Removed: In addition to the above environmental reporting initiatives, in 2020, we joined PCAF, a global financial industry-led partnership to implement a consistent and transparent disclosure framework to report carbon emissions and avoided emissions resulting from financed assets.
−Removed: We expect to implement our reporting in accordance with PCAF by 2023.
+Added: In addition to the above environmental reporting initiatives, in 2022, we reported our corporate emissions under PCAF, a global financial industry-led partnership to implement a consistent and transparent disclosure framework to report carbon emissions and avoided emissions resulting from financed assets.
We also disclose metrics related to our Human Capital Strategy.
1 unchanged sentence
Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Human Capital Metrics”.
−Removed: When issuing debt, including our CarbonCount Green Commercial Paper Notes, we generally provide the estimated carbon emission savings using CarbonCount, and in some instances are able to achieve better borrowing rates by achieving certain CarbonCount scores.
+Added: When issuing debt, we generally provide the estimated carbon emission savings using CarbonCount, and in some instances are able to achieve better borrowing rates by achieving certain CarbonCount scores.
C ertain of our debt issuances have been evaluated to determine that they meet the environmental eligibility criteria for green bonds as defined by the International Capital Markets Association’s Green Bond Principles.
−Removed: We compete against a number of parties, including banks, private equity, hedge or infrastructure investment funds, insurance companies, mutual funds, institutional investors, investment banking firms, specialty finance companies, utilities, independent power producers, project developers, pension funds, governmental bodies, private credit platforms, and public entities established to own infrastructure assets and other entities.
+Added: We compete against a number of parties, including banks, private equity, hedge or infrastructure investment funds, insurance companies, mutual funds, institutional investors, investment banking firms, specialty finance companies, utilities, independent power producers, project developers, pension funds, governmental bodies, private credit platforms, green banks, and public entities established to own infrastructure assets and other entities.
We compete primarily on the basis of service, price, structure and flexibility as well as the breadth and depth of our expertise.
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For additional information concerning these competitive risks, see “Item 1A.
−Removed: Risk Factors—We operate in a competitive market and future competition may impact the terms of our investments.”
+Added: Risk Factors—We operate in a competitive market, which may impact the terms of the investments we make.”
INFORMATION ABOUT OUR EXECUTIVE OFFICERS AND OTHER LEADERSHIP TEAM PERSONNEL
−Removed: Our executive officers and other leadership team personnel and their biographies are as follows:
+Added: Our executive officers and other leadership team personnel and their biographies are provided below.
+Added: On February 16, 2023, we announced that Jeffrey W.
+Added: Eckel will become executive chair of our Board, Jeffrey A.
+Added: Lipson will become president and chief executive officer, and Marc T.
+Added: Pangburn will become executive vice president and chief financial officer, each effective as of March 1, 2023.
Eckel , 64, has served as our president, chief executive officer, and chairman of our Board since 2013 and was with the predecessor of our company as president and chief executive officer since 2000 and prior to that from 1985 to 1989 as a senior vice president.
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Nickey previously served as a managing director from 2014 to 2021.
−Removed: Nickey currently serves as treasurer on the board of directors of the American Clean Power Association and is a member of the President’s Council at Ceres, a non-profit sustainability advocacy organization.
+Added: Nickey currently serves as chair-elect on the board of directors of the American Clean Power Association and is a member of the President’s Council at Ceres, a non-profit sustainability advocacy organization.
Previously, she founded and served as CEO of Threshold Power.
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Rose has been involved with a vast majority of our transactions since 2000.
−Removed: Rose earned a joint Bachelor of Science and Bachelor of Arts degree from the University of Richmond in 2000, a Master of Business Administration degree from the Darden School of Business Administration at the University of Virginia in 2009, is a CFA charter holder and has passed the CPA examination.
+Added: Rose earned a joint Bachelor of Science and Bachelor of Arts degree from the University of Richmond in 2000, a Master of Business Administration degree from the Darden School of
+Added: Business Administration at the University of Virginia in 2009, is a CFA charter holder and has passed the CPA examination.
He holds a Series 63 and 79 securities licenses.
4 unchanged sentences
He holds Series 24, 63 and 79 securities licenses.
−Removed: Pangburn , CFA, 36, has served as an executive vice president and a co-chief investment officer since January 2021.
+Added: Pangburn , 37, has served as an executive vice president and a co-chief investment officer since January 2021.
Pangburn joined the Company in 2013 and previously served as a managing director until 2021, and is jointly responsible for the Company’s investing activities.
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Pangburn worked at MP2 Capital, a solar development and financing company, where he was responsible for structuring the firm’s transactions, and worked in the private capital group at New York Life Investments, focusing on utilities, energy and infrastructure debt and equity investments.
−Removed: Pangburn received his Bachelor of Arts degree in economics from Drew University and is a CFA charter holder.
+Added: Pangburn received his Bachelor of Arts degree in economics from Drew University.
Santoroski , 58, has served as executive vice president and co-head of portfolio management since October 2021, previously serving as chief analytics officer since January 2021 after joining the company in 2020 as a managing director.
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Previously, Ms.
−Removed: Dent served as vice president, deputy general counsel, and assistant secretary from 2003 to 2020, where she played a key role in structuring, developing, negotiating, and closing several billions of dollars of transactions.
+Added: Dent served as vice president, deputy general counsel, and assistant secretary from 2003 to 2020, where she played a key role in structuring, developing, negotiating, and closing billions of dollars of transactions for the Company.
Dent received a Bachelor of Arts in English from Niagara University in 1993 and a Juris Doctor from the University at Buffalo School of Law in 1996.
−Removed: Dent serves as the Chair of the board of trustees for St.
−Removed: Anne’s School of Annapolis.
+Added: Dent serves on the board of trustees for St.
+Added: Anne’s School of Annapolis, for which she served as Chair from 2020 to 2022.
+Added: Amanuel Haile-Mariam , 43, has served as a managing director since joining the Company in 2021 and is responsible for the company’s structured investments in Grid-Connected renewable energy markets.
+Added: Prior to joining the Company, Mr.
+Added: Haile-Mariam worked at GE Energy Financial Services for 15 years leading the execution, asset management, capital raise and divestment of energy infrastructure projects.
+Added: Prior to joining GE Energy Financial Services, he worked at GE Corporate Audit Staff, conducting financial audits, leading simplification and operational excellence projects.
+Added: Haile-Mariam received his Bachelor of Science degree in accounting and Master of Business Administration in finance from the University of Connecticut.
Melko , CPA, 42, has served as a senior vice president and our chief accounting officer since 2017 and as our treasurer since January 2021.
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In his treasurer role, he is involved in the company’s cash management and related capital markets activities.
−Removed: He is also responsible for leading the company’s ESG programs and continually driving best-practices in ESG disclosures.
Previously, he served in a number of roles at PricewaterhouseCoopers LLP since 2005, including as a Senior Manager in the National Professional Services Group where he focused on complex financial instruments accounting issues for energy clients.
Melko received a Bachelor of Science degree in Accountancy in 2002, a Master of Business Administration degree in 2005 and a Master of Science degree in Accountancy from Wheeling Jesuit University in 2005.
−Removed: He holds a CPA license in West Virginia and Maryland.
+Added: He holds a CPA license in West Virginia and Maryland and is also a Certified Treasury Professional (CTP).
+Added: Annmarie Reynolds , 53, has served as a managing director since joining the Company in 2022 and is responsible for building and growing the company’s investment in markets beyond current asset classes.
+Added: Prior to joining the Company, Ms.
+Added: Reynolds worked at The AES Corporation for 22 years serving in several senior roles including chief customer officer, chief commercial officer – US and Eurasia, chief risk officer and managing director climate solutions.
+Added: Prior to joining The AES Corporation, she worked several years at New York State Electric and Gas as an energy trader and engineer.
+Added: Reynolds received her Bachelor of Science degree in Mechanical Engineering from Rutgers University, the State University of New Jersey.
+Added: Daniela Shapiro , 48, joined the Company as managing director in 2022 and is responsible for growing the company’s investments in Behind-the-Meter opportunities and expanding solutions for broader onsite and as-a-service offerings.
+Added: Daniela has over 20 years of energy industry experience.
+Added: Prior to joining the Company, Ms.
+Added: Shapiro was the CFO for Guzman Energy
+Added: and held various other executive positions, including at SoCore/ ENGIE.
+Added: Prior to this, Ms.
+Added: Shapiro worked in the banking industry for 10 years, where she was responsible for deploying capital in energy and infrastructure assets, including tax equity investments in renewable energy projects.
+Added: Shapiro received her Bachelor of Science degree in Electrical Engineering from UNIFEI in Brazil, and her MBA from Northwestern University’s Kellogg School of Management.
AVAILABLE INFORMATION
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We provide copies of our Corporate Governance Guidelines and Code of Business Conduct and Ethics policy, free of charge, to stockholders who request such documents.
−Removed: Requests should be directed to Investor Relations, 1906 Towne Centre Blvd, Suite 370, Annapolis, Maryland 21401, (410) 571-9860.
+Added: Requests should be directed to Investor Relations, One Park Place, Suite 200, Annapolis, Maryland 21401, (410) 571-9860.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.