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Item 1. Business

2025-02-14 compared with 2024-02-16 · 158 added, 147 removed, 184 unchanged (62% of the section changed)

HASI is a climate positive investment firm that actively partners with clients to deploy real assets that facilitate the energy transition.

With more than $12 billion in managed assets, our vision is that every investment improves our climate future.

We invest in a variety of asset classes across our three primary climate solutions markets:

Behind the Meter

Grid-Connected

Fuels, Transport, and Nature

• Residential Solar & Storage

COMPANY OVERVIEW

HASI is an investor in sustainable infrastructure assets advancing the energy transition.

Our investment strategy is focused on actively partnering with clients to deploy capital primarily in income-generating real assets that are supported by long-term recurring cash flows.

This strategy has enabled us to generate attractive risk-adjusted returns and provide stockholders with diversified exposure to the energy transition.

We are internally managed by an executive team that has extensive relevant industry knowledge and experience, and a team of over 150 full-time investment, operating, and technical professionals.

We have long-standing, programmatic relationships with some of the leading U.S.

clean energy project developers, owners and operators, utilities, and energy service companies, which provide recurring, investment and fee-generating opportunities, while also enabling scale benefits and operational and transactional efficiencies.

Partnering with these clients, we are able to earn attractive risk-adjusted returns by investing in a variety of asset classes across our three primary climate solutions markets:

Behind the Meter Grid-Connected Fuels, Transport, and Nature

• Residential solar and storage

• Utility-scale solar

• Renewable natural gas

• Community Solar and Commercial & Industrial Solar

• Community, commercial, and industrial solar and storage

• Onshore wind

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• Ecological restoration

We are internally managed by a management team that has extensive relevant industry knowledge and experience, and a team of over 130 climate finance professionals.

We have long-standing relationships with some of the leading clean energy project developers, owners and operators, utilities, and energy service companies (“ESCOs”), that provide recurring, programmatic investment and fee-generating opportunities.

We measure and report the efficiency with which all HASI investments avoid carbon emissions using CarbonCount®, producing a quantitative impact score of the avoided CO 2 equivalent .

Our programmatic client partnership, flexible capital and aligned goals enable repeat business and operational efficiencies.

Through our specialized platform, we offer stockholders access to attractive risk adjusted returns from direct asset investing in diverse energy transition end markets.

Through December 31, 2024, we have cumulatively closed more than 1,250 investments spanning more than 100 different clients since 1998.

Our investments take many forms, including equity, joint ventures, real estate, commercial and government receivables or securities, and other financing transactions.

While we participate in diverse end markets, we generally intend for all our investments to share common attributes such as being climate-positive investments with top-tier clients in real assets using proven commercial technologies, and which benefit from contracted cash flows and high quality, incented offtakers.

We completed approximately $2.3 billion of transactions during 2023, compared to approximately $1.8 billion during 2022.

As of December 31, 2023, we held approximately $6.2 billion of transactions on our balance sheet, which we refer to as our “Portfolio.” 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, in certain cases, residual interests in the trusts and ongoing fees.

As of December 31, 2023, we managed approximately $6.1 billion in these trusts or vehicles that are not consolidated on our balance sheet.

When we combine these assets with our Portfolio, as of December 31, 2023, we manage approximately $12.3 billion of assets, which we refer to as our “Managed Assets.”

We have a dual revenue strategy, through which generate both net investment income from our portfolio, and Gain-on-Sale and ongoing fees via off-balance sheet securitization transactions, advisory services, and asset management.

We fund our investments in climate solutions using a broad range of financing sources including corporate unsecured bonds, convertible bonds, non-recourse or recourse debt from banks and financial institutions, equity, syndications and off-balance sheet securitization structures.

We manage our short-term liquidity needs through short-term commercial paper issuances and revolving credit facilities.

We generally provide the associated CarbonCount metrics for our debt issuances.

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.

A further description of our financing activities can be found herein.

With over $13 billion in managed assets, including a portfolio of $6.6 billion in assets retained on our balance sheet, our investments span a broad range of sustainable infrastructure assets, which in aggregate represent more than 7 gigawatts (GW) of solar power capacity (including 3.5 GW utility-scale) and more than 4 GW of onshore wind power capacity–which together generate 20 terawatt-hours (TWh) of electricity annually–as well as battery storage capacity of more than 1 GW, RNG facilities with the capacity to produce more than 40 million diesel gallons-equivalent, more than 1,000 commercial fleet vehicles, and more than 375 energy efficiency projects.

In aggregate, we estimate our investments enable the avoidance of approximately 8 million metric tons of carbon dioxide equivalent annually (based on the aggregate of each of our project’s first year of operations).

We completed approximately $2.3 billion of transactions during both 2024 and 2023, and from 2020 through 2024 we have closed more than $10 billion of transactions.

As of December 31, 2024, our managed assets totaled approximately $13.7 billion, and generally fall into one of three categories:

(1) our Portfolio, which primarily consists of receivables and equity method investments we have retained on our balance sheet, (2) the portion of assets in our co-investment structures that are not included in our Portfolio but held by our investment partners in these structures, and (3) assets we have securitized by transferring all or a portion of the economics of the transaction, typically using securitization trusts, to institutional investors in exchange for cash and, in certain cases, residual interests in the trusts and ongoing fees.

As of December 31, 2024, our Portfolio totaled approximately $6.6 billion, consisting of over 550 investments.

Approximately 47% of our Portfolio is invested in BTM assets, approximately 39% invested in GC assets, and approximately 14% invested in FTN investments.

The mix of our Portfolio is expected to vary over time, as we seek to manage the diversity of our Portfolio by, among other factors, project type, project operator, type of investment, type of technology, transaction size, geography, obligor, and maturity.

As of December 31, 2024, assets held in our co-investment structures that were not consolidated as part of our Portfolio but held by our investment partners in these structures totaled approximately $300 million.

As of December 31, 2024, we also managed approximately $6.8 billion in securitized assets held in unconsolidated securitization trusts.

The returns we generate on our investments are generally derived from five primary sources:

(1) interest income, (2) income from equity method investments, (3) gains on the sale of assets through securitizations, (4) fee revenue from co-investment vehicles and securitized assets that we manage, and (5) residual income generated by the portion of securitized assets that we have retained.

Management operates and evaluates the business with a particular focus on growing Adjusted earnings per share, as well as Adjusted Net Investment Income, which represents interest income and rental income revenue plus equity method investments earnings (a non-GAAP adjustment to our income from equity method investments that we believe is a useful indicator of the underlying economics of our investments) less interest expense and excluding the amortization of real estate intangibles and non-cash equity compensation expense.

We have achieved success as a leading pure play publicly-traded investor in sustainable infrastructure assets because of a number of differentiating qualities that we believe provide us with a competitive advantage in the market.

The first such quality is our prioritization of long-term client relationships over individual transactions, as well as our explicit strategic decision never to compete with our clients, which differentiates us from many competing capital providers.

The second is our access to permanent capital, which enables a degree of flexibility and creativity in structuring new investments that we believe clients find valuable.

The third is our ability to nimbly invest in smaller transaction sizes across the capital structure which results in more investment opportunities than competing capital providers.

The fourth such quality is our multi-decade experience in investing in our target end markets, and the unique technology, policy, taxes, incentives and investment structures that characterize such markets.

We believe we have demonstrated the resilience of our business to grow assets, earnings, and generate attractive returns through multiple interest rate cycles, economic cycles, and political administrations.

Together, these qualities not only differentiate us in the marketplace and add strategic value to our clients but also enable operational and transactional efficiencies that enhance our ability to earn attractive risk-adjusted returns on the assets in which we invest.

We have a large and active pipeline of potential new opportunities that are in various stages of our underwriting process.

We believe the Inflation Reduction Act signed into law on August 16, 2022, which incentivizes the construction of and investment in climate solutions will result in additional investment opportunities in the markets in which we invest over the next several years, and therefore 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 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.

Our pipeline of transactions that could potentially close in the next 12 months consists of opportunities in which we will be the lead originator as well as opportunities in which we may participate with other institutional investors.

As of December 31, 2023, our pipeline consisted of more than $5.0 billion in new equity, debt and real estate opportunities.

Our pipeline represents transactions that could potentially close in the next 12 months.

There can, however, be no assurance with regard to any specific terms of such pipeline transactions or that any or all of the transactions in our pipeline will be completed.

We are committed to leadership in transparent disclosure on sustainability, impact, and governance matters.

Beginning in 2013, we became one of the first capital providers to evaluate the climate impact of our Portfolio by utilizing CarbonCount.

In 2017, we believe we were the first U.S-based public company to commit to the Climate Disclosure Standards Board led initiative on implementing the recommendations of the Financial Stability Board’s Task Force for Climate-related Financial Disclosures (“TCFD”) and provide the recommended disclosures in our Form 10-K.

As of December 31, 2024, our pipeline consisted of more than $5.5 billion in new equity, debt and real estate opportunities.

Of our pipeline, 48% is related to BTM assets and 25% is related to GC assets, with the remainder related to FTN.

We manage our short-term liquidity needs through short-term commercial paper issuances and revolving credit facilities.

A further description of our financing activities can be found herein in the section titled “Financing Strategy”.

In addition, we are committed to leadership in transparent disclosure on sustainability, impact, and governance matters.

Beginning in 2013, we became one of the first capital providers to evaluate the climate impact of our investments, and we measure and report the efficiency with which all HASI investments avoid carbon emissions using CarbonCount®, our proprietary quantitative impact score of the avoided carbon dioxide equivalent emissions.

We are a member of 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, and report our financed and avoided emissions under that framework.

For further information on our disclosures, see the discussion in the sections titled “Investment Strategy” and “Sustainability, Impact and Corporate Governance” herein.

We are committed to providing transparent disclosures on our human capital management, which can be found herein in the section titled “Human Capital Strategy.” Through the HASI Foundation, we provide 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 positive local impact in the communities where our business operates.

For further information on our disclosures, see the discussion in the sections titled “Our Investment Strategy” and “Sustainability, Impact and Corporate Governance” herein.

We are committed to providing transparent disclosures on our human capital management, which can be found herein in the section titled “Human Capital Strategy.”

We elected and qualified to be taxed as a REIT for U.S.

federal income tax purposes, commencing with our taxable year ended December 31, 2013 through our taxable year ended December 31, 2023.

In December 2023, our board of directors approved our revocation of our REIT status effective January 1, 2024, and we will be taxed as a C Corporation beginning with tax year 2024.

In December 2023, our Board approved our revocation of our REIT status effective January 1, 2024, and we are taxed as a C Corporation beginning with tax year 2024.

We operate our business in a manner that permits us to maintain our exemption from registration as an investment company under the 1940 Act.

INVESTMENT STRATEGY

With scientific consensus that global-warming trends are linked to human activities and result in various extreme weather events, we believe our firm is well-positioned to generate attractive risk-adjusted returns by investing in, and managing a portfolio of, real assets that mitigate greenhouse gas emissions.

Further, with increasing weather-related disasters, we see similar investment opportunities in infrastructure assets that increase the resiliency to these weather events and other adverse impacts of climate change.

Our vision is that every investment improves our climate future and our purpose is to make climate positive investments that produce superior risk-adjusted returns.

Sustainability is at the core of our business model and influences every investment decision which is why we require all HASI investments to be neutral to negative on incremental carbon emissions or have some other tangible environmental benefit such as reducing water consumption or increasing resilience to extreme events.

Our climate-positive investment thesis is based on the following theories:

• more efficient technologies are more productive and thus should lead to higher economic returns;

• lower portfolio risk is inherent in a portfolio of smaller investments, generated by trends of increasing decentralization and digitalization of energy assets;

• investing in assets aligned with scientific consensus and broadly held societal values will reduce potential regulatory and social costs through more internalization of externalities;

• assets that reduce or avoid carbon emissions represent an embedded option that may increase in value if regulatory authorities were to set a price on carbon emissions.

We believe combining this investment thesis with our multi-decade experience in investing in our markets through multiple interest rate and business cycles, intermittent governmental support for reducing carbon emissions and several cycles of business expansions in renewable and other sustainable infrastructure markets, allows us to earn attractive risk-adjusted returns on the assets in which we invest.

We also believe there is a very large potential market opportunity as the legacy technologies for generating and using energy and the systems that produce carbon emissions are retired and replaced by low-to-

no carbon emission systems.

Mitigation and resiliency investments continue to grow to address severe weather events and other climate change impacts.

Our investments in climate solutions are focused on three markets:

MARKET OVERVIEW

The market for sustainable infrastructure assets remains strong and continues to grow, supported by three major trends impacting the U.S.

economy and energy markets, which we expect will continued for several years.

First is the substantial growth expected in U.S.

power demand in the years ahead–spurred most prominently by growth in data centers, domestic manufacturing, and the electrification of additional sectors of the economy, including transportation, space heating, and industrial manufacturing.

This outlook is underscored by a breadth of forecasts including McKinsey & Company (“McKinsey”) which estimates growth in U.S.

electricity demand of more than 1,000 terawatt-hours (TWh) between 2024 and 2030, with power demand from data centers alone requiring 50 gigawatts (GW) of new generating capacity, and requiring energy infrastructure investment of more than $500 billion, excluding costs for transmission and distribution and computer equipment within the data centers.

Second is the heightened focus on energy prices stemming from the inflation shock experienced between 2022 and 2024, which we believe will support the desire to supply this energy demand growth from an “all of the above” energy strategy that includes a breadth of energy sources, with a specific focus on the lowest cost sources of electricity like solar power.

Third is the greater awareness and appreciation of the scientific consensus that climate change is linked to human activities, as well as the substantial and growing financial costs of environmental disasters related to climate change.

We believe this will lead to growing recognition of the need to satiate growth in energy consumption from sources with lower, if not zero, emissions, such as the renewable energy technologies in which we invest.

We believe strong momentum behind these multi-year trends will lead to elevated demand for clean energy infrastructure assets, and are providing a growing set of investment opportunities that can generate superior risk-adjusted returns that we believe HASI’s business model and focus, our expertise and experience, and our investment and financing strategy leave it well-positioned to capitalize on.

Fourth is a growing focus on the need for not only greater grid resilience and reliability, in part due to higher load and greater frequency and magnitude of climate disasters, as discussed above, but also due to greater focus on energy national security in light of ongoing geopolitical uncertainty.

OUR INVESTMENT STRATEGY

We are an investment firm dedicated to investing in, and managing a portfolio of, sustainable infrastructure assets.

Our investment strategy is focused on three end markets:

• Behind-the-Meter (“BTM”):

distributed energy projects which reduce energy usage or cost through solar power generation, electric storage, or energy efficiency improvements such as heating, ventilation, and air conditioning systems (HVAC), lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems;

distributed renewable energy projects which reduce energy cost and/or usage through residential, commercial & industrial, and community solar power and energy storage deployments, as well as energy efficiency improvements such as heating, ventilation, and air conditioning systems (HVAC), lighting, energy controls, roofs, windows, building shells, and/or combined heat and power systems.

The off-taker or counterparty for BTM assets may be the building owner or occupant, and our investment may be secured by the installed improvements or other real estate rights;

• Grid-Connected (“GC”) :

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;

utility-scale renewable energy projects that deploy cleaner energy sources, such as solar, solar-plus-storage, and wind, to generate cleaner, lower cost energy.

The off-takers or counterparties for GC assets may be utility, electric users, or participants in the wholesale electric power markets who have entered into contractual commitments, such as power purchase agreements (“PPAs”), to purchase power produced by a renewable energy project at a specified price with potential price escalators for a portion of the project’s estimated life;

• Fuels, Transport, and Nature (“FTN”):

a range of real assets spanning high-emitting economic sectors other than the power grid such as transportation and fuels in the United States, including renewable natural gas (RNG) plants, transportation fleet enhancements, and ecological restoration projects, among others.

Of our pipeline, 52% is related to BTM assets and 30% is related to GC assets, with the remainder related to FTN, an area of increased focus for us beginning in 2023.

We prefer investments in which the assets use proven technology and have a long-term, creditworthy off-taker or counterparties.

For BTM assets, the off-taker or counterparty may be the building owner or occupant, and our investment may be secured by the installed improvements or other real estate rights.

For GC assets, the off-takers or counterparties may be utility or electric users who have entered into contractual commitments, such as power purchase agreements (“PPAs”), to purchase power produced by a renewable energy project at a specified price with potential price escalators for a portion of the project’s estimated life.

We make our investments utilizing a variety of structures, including:

a range of infrastructure assets that are designed to reduce emissions and/or provide environmental benefits in projects beyond the power grid, such as transportation and fuels, including renewable natural gas (RNG) plants, transportation fleet enhancements, and ecological restoration projects, among others.

For FTN assets, the off-takers may be oil and gas refiners, industrial companies, and vertically integrated electric utilities.

One of the defining criteria of our investment strategy is that all HASI investments are neutral to negative on incremental carbon emissions or have some other tangible environmental benefit such as reducing water consumption or increasing resilience to extreme weather events.

HASI’s investment thesis is that we can generate superior risk-adjusted returns by investing in sustainable infrastructure assets based on four key premises:

• With growth in data centers, domestic manufacturing, and the electrification of transportation, industry, and other sectors of the economy expected to drive U.S.

power demand higher, we expect clean energy assets that provide

lower cost and faster speed-to-market solutions that supply that demand will provide a growing number of opportunities to invest at attractive rates of return;

• With solar and wind energy, on an unsubsidized basis, representing the lowest cost source of electricity, according to Lazard Inc.’s “Levelized Cost of Energy” reports, given zero feedstock cost and no direct exposure to the volatility of fossil fuel commodity prices, clean energy should not only be in high demand but generate superior economic returns;

• With scientific consensus that climate change is linked to human activities and resulting in a growing frequency and magnitude of extreme weather events and environmental disasters causing billions of dollars of damages in the United States every year, assets that reduce or avoid carbon emissions can not only reduce potential regulatory and social costs but also substantial financial costs, while also providing an embedded option that may increase in value if regulatory authorities were to set a price on carbon emissions as has been done in other countries;

• With growing demand for energy infrastructure assets that improve the reliability of the electric grid and enhance national security, assets that improve the resilience of the grid such as distributed energy resources, and that do not depend on fuel imported from foreign sources, will provide greater value and potentially superior rates of return..

Our primary objective is to earn attractive risk-adjusted returns that sufficiently exceed our cost of capital.

We believe we are able to generate superior risk-adjusted returns in part due to our adherence to a core set of investment criteria.

In particular, we are focused primarily on investments which are:

• income-generating sustainable infrastructure assets;

• supported by underlying, long-term recurring cash flows;

• contracted with creditworthy, incentivized off-takers;

• rely upon proven commercial technologies;

• originated by programmatic clients

One of the primary metrics we utilize to measure our return on capital is a cash-on-cash internal rate of return over the life of the investment.

In order to generate superior risk-adjusted returns, we believe it is important not only to pursue investments that yield attractive returns but also investments where risk can be sufficiently mitigated.

We believe we are successful at this in part by using sophisticated structures which protect our invested capital and targeted returns by giving us a preferred position in the capital structure where we are assigned priority to collect cash flows ahead of other investors junior to us in the capital structure until we are able to achieve our targeted rate of return.

In addition, we typically secure our investments with collateral that we are confident will support the return of our capital, further lowering the risk of our investments.

We make our investments via a variety of structures, including:

• equity investments in either preferred or common structures in unconsolidated entities;

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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.

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.

We also own, both directly and 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.

We often make investments where we hold a preferred or mezzanine position in a project company where we are subordinated to project debt and/or preferred forms of equity.

Investing greater than 10% of our assets in any investment requires the approval of a majority of our independent directors.

We invest in 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.

Investing greater than 10% of our assets in any single investment requires the approval of a majority of our independent directors.

We may adjust the mix and duration of our assets over time in order to allow us to manage various aspects of our Portfolio, including expected risk-adjusted returns, macroeconomic conditions, liquidity, availability of adequate financing for our assets, and our exemption from registration as an investment company under the 1940 Act.

As of December 31, 2023, our Portfolio consisted of over 520 investments, with approximately 48% of our Portfolio invested in BTM assets, approximately 37% invested in GC assets, and approximately 15% invested in FTN investments.

As part of our investment process, we calculate the ratio of the estimated first year of metric tons of carbon emissions avoided by our investments divided by the capital invested to quantify the carbon impact of our investments.

In this calculation, which we refer to as CarbonCount, we use emissions factor data, expressed on a CO 2 equivalent basis, representing the locational marginal emissions associated with a project to determine an estimate of a project’s energy production or savings to compute an estimate of metric tons of carbon emissions avoided.

We estimate that our investments originated in 2023 will avoid annual carbon emissions by over 760 thousand metric tons, equating to a CarbonCount of 0.33.

In addition to carbon emissions avoidance, we also consider other environmental attributes, such as water use reduction, stormwater remediation benefits and stream restoration benefits.

We believe that our long history of climate solutions investing, the experience, expertise and relationships of our management team, the anticipated credit strength of the obligors or investees involved in our investments and the size and growth potential of our market, position us well to capitalize on our strategy.

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FINANCING STRATEGY

Our financing strategy is focused on lowering our cost of capital while also growing and diversifying our sources of capital.

We believe we have available a broad range of financing sources as part of our strategy to fund our investments.

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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.

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.

In 2024, we established CarbonCount Holdings 1 LLC (“CCH1”), a co-investment structure established to jointly invest $2 billion in certain eligible climate positive projects with an affiliate of Kohlberg Kravis Roberts & Co.

Financial Statements and Supplementary Data, Note 6 to our financial statements for further information on CCH1.

We may consider further use of similar structures to allow us to expand the investments that we make or to manage our Portfolio diversification.

During 2024, we received a second investment grade rating from a major rating agency, which enabled our bonds to be included in investment grade bond indices.

Achieving investment grade status has further enhanced our financing strategy by improving our access to capital and lowering our cost of capital.

The decision on how we finance our business is largely driven by our target capital structure, and by market conditions including the overall interest rate environment, prevailing credit spreads and the terms of available financing.

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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.

Operationally, we target a leverage ratio below our Board’s target limit, in the range of 1.8 to 2.0 to 1.

See additional discussion in “Item 7.

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We also typically manage and service these assets in exchange for fees.

We may also use other funds or structures where institutional investors purchase all or a portion of the economics of the transaction and where we may receive upfront or ongoing fees for managing the assets.

We may also use other funds or structures such as CCH1 where institutional investors purchase all or a portion of the economics of the transaction and where we may receive upfront or ongoing fees for managing the assets.

We periodically provide other services, including arranging financings that are held on the balance sheets of other investors and advising various companies with respect to structuring investments.

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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.

Our chief executive officer periodically leads employee meetings intended to reinforce the importance of sustainability and regularly meets with small groups of employees to receive their feedback on our business.

We also meet no less than quarterly as a Company to provide information to employees on our mission, strategic planning and financial results.

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.

run a periodic education series that includes internal and external speakers presenting topics of interest that are relevant to our employees.

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.

Our employees are typically engaged in our mission of sustainability and we believe this engagement improves their performance, as well as our employee recruitment and retention.

Our chief executive officer periodically leads employee meetings intended to reinforce the importance of our mission and regularly meets with small groups of employees to receive their feedback on our business.

We also meet no less than quarterly as a company to provide information to employees on our strategy, mission, and financial results.

We continuously evaluate our employees’ level of engagement through in-person or remote meetings 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 outside of work), from other people (mentors or supportive managers), and from formal learning and training programs.

We run a periodic education series that includes internal and external speakers presenting topics of interest that are relevant to our employees.

We provide multiple learning solutions that cover a wide range of areas such as leadership skills, financial knowledge, technology training, presentation skills, and training intended to support an inclusive environment for all.

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.

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.

Managers hold performance conversations with their employees on a periodic basis to ensure they receive adequate performance feedback, and to allow managers to both 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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Despite a healthcare environment that is facing rising costs, we continue to pay substantially all of the cost of our employees’ healthcare insurance.

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.

We believe that fostering an internal climate that is supportive and allows people of all backgrounds to flourish lends itself to the highest levels of company performance and facilitates the attraction and retention of best-in-class talent.

We also believe it is inherently the right way to conduct business.

We support an innovative, creative culture where people can bring their best and most authentic selves to work.

Further, in addition to what we believe to be market total rewards benefits, we provide additional benefits, such as employee assistance programs, back-up childcare solutions, and a tuition reimbursement program.

We take a values-driven, broad view of diversity, equity, and inclusion for all.

We believe that fostering an internal culture of belonging that allows people of all backgrounds to flourish lends itself to the highest levels of company performance and facilitates the attraction and retention of best-in-class talent.

Employees who hold divergent opinions are encouraged to voice their views.

We track and report internally on key talent metrics including workforce demographics, critical role pipeline data, diversity data, and engagement and inclusion indices.

We track and report internally on key talent metrics including workforce demographics, critical role pipeline data, and engagement and inclusion indices.

Decisions regarding staffing, selection, and promotions are made on the basis of individual qualifications related to the requirements of the position.

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.

We are committed to the sourcing and/or promotion of highly-qualified women, people of color and other under-represented groups for management and Board positions.

To better support our female and underrepresented employees in their onboarding, training, development and progression within the Company, we have established a mentorship program where certain members of our Board mentor female employees who are developing managers.

We are committed to the development and/or promotion of highly-qualified personnel from all demographics including women, people of color and other recognized groups for management and Board positions.

Our policy is “equal pay for equal work” in compliance with applicable state law.

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We own and invest in a diversified portfolio of climate solutions projects focused on reducing or mitigating the impacts of climate change.

Under the direction of our chief executive officer and the Board, we are focused on achieving a high level of environmental and social responsibility and strong corporate governance.

Under the direction of our chief executive officer and our Board, we are focused on achieving a high level of environmental and social responsibility and strong corporate governance.

The Nominating, Governance and Corporate Responsibility Committee of our Board is responsible for our oversight of sustainability, impact, and governance matters, including related policies and communications.

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Annually we publish a report that illustrates our progress on these matters.

Environmental Responsibility.

We are a signatory to the United Nations Global Compact, an initiative focused on responsible business practices related to human rights, labor, the environment and anti-corruption.

Sustainability.

Our business and business strategy are focused on addressing climate change, in part through the reduction of carbon emissions that have been scientifically linked to climate change.

As described under “Investment Strategy”, we quantify the carbon impact of each of our investments.

In addition, we operate our business in a manner intended to reduce our own environmental impact, including by purchasing carbon offsets to mitigate the impact of our office operations, encouraging recycling and composting, and offering clean transportation employee incentives for electric and hybrid vehicles.

In addition, we operate our business in a manner intended to reduce our own environmental impact, including by purchasing renewable energy credits to mitigate the impact of our office operations, encouraging recycling and composting, and offering clean transportation employee incentives for electric and hybrid vehicles.

We have also adopted policies focused on minimizing the environmental impact of our operations.

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.

We have since validated a net-zero target with the Net Zero Asset Managers Alliance, which commits us to achieving net zero carbon intensity for our financed emissions by 2050.

We are a signatory to the United Nations Global Compact, an initiative focused on responsible business practices related to human rights, labor, the environment and anti-corruption.

We participate in a number of initiatives and coalitions that share our commitment to climate action, corporate sustainability, climate-risk disclosure and reporting, and the expansion of clean energy including the United Nations-supported Principles for Responsible Investment, the United Nations Global Compact campaign entitled Business Ambition for 1.5°, and the reporting framework established by an international consortium of business and environmental NGOs referred to as the Climate Disclosure Standards Board.

Social Responsibility.

We recognize that the effects of pollution, environmental degradation, increased climate-fueled extreme weather events, and the economic transition away from fossil fuels fall most heavily on marginalized communities in our society, especially communities of color.

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.

We recognize that the effects of pollution, environmental degradation, increased climate-fueled extreme weather events, and the economic transition away from fossil fuels fall most heavily on certain communities in our society, especially rural communities and communities of color.

We know that the effects of climate change are already disproportionately impacting disadvantaged communities, and these adverse outcomes will be exacerbated if we do not eliminate harmful g reenhouse gas emissions.

Equally so, we acknowledge the legacy of discriminatory policies in creating and perpetuating this imbalance.

We believe in every person’s inherent worth and dignity and that we should all have access to clean water, clean air, healthy food, resilient and reliable shelter and energy, and good paying jobs.

We believe these disparities must be addressed while society works to accelerate the transition to a net-zero economy, both here in the United States and across the globe.

We are determined to incorporate these ideals and actions across our entire business, including in our process for underwriting investments, our engagement with business partners, our human capital strategy, philanthropy, and policy advocacy efforts.

We established the HASI Foundation to provide cash and in-kind support to programs which provide climate solutions investments and career opportunities for those from historically underrepresented communities, as well as organizations across our local region that seek to strengthen the social fabric and promote economic and climate resiliency.

Corporate Governance.

We believe that the energy transition presents an opportunity to address these disparities.

These principles inform our process for underwriting investments, our engagement with business partners, our human capital strategy, philanthropy, and policy advocacy efforts.

We established the HASI Foundation to provide cash and in-kind support to programs which provide climate solutions investments and career opportunities for those from disadvantaged communities, as well as organizations across our local region that seek to strengthen the social fabric and promote economic and climate resiliency.

We are focused on achieving best-in-class corporate governance practices to help ensure that our team will operate in a manner consistent with our organizational mission and deliver attractive risk-adjusted returns.

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• our Board is not staggered, with each of our directors subject to re-election annually;

• our Board has determined that nine of our eleven directors are independent for purposes of the New York Stock Exchange (“NYSE”) corporate governance listing standards and Rule 10A-3 under the Exchange Act;

• 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;

• we have separated the executive chairman and chief executive officer roles as discussed in Item 9B of this Form 10-K;

• our Board has determined that eight of our ten directors are independent for purposes of the New York Stock Exchange (“NYSE”) corporate governance listing standards and Rule 10A-3 under the Exchange Act;

• we have a lead independent director of our Board that convenes and chairs executive sessions of the independent directors to discuss certain matters without management or the chairman present;

• we have separated the executive chairman and chief executive officer roles;

• three of our directors qualify as an “audit committee financial expert” as defined by the Securities and Exchange Commission (the “SEC”);

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• we have a Clawback Policy that provides for the possible recoupment of performance or incentive-based compensation in the event of an accounting restatement due to material noncompliance by us with any financial reporting requirements under the securities laws (other than due to a change in applicable accounting methods, rules or interpretations);

• we have opted out of the control share acquisition statute in the Maryland General Corporations Law (the “MGCL”);

• stockholders have the ability to amend the Company’s bylaws by the affirmative vote of the holders of a majority of the outstanding shares of our common stock pursuant to a binding proposal submitted by a stockholder.

• we have exempted from the business combinations statute in the MGCL transactions that are approved by our Board (including a majority of our directors who are not affiliates or associates of the acquiring person).

In order to foster the highest standards of ethics and conduct in all business relationships, we have adopted a Code of Business Conduct and Ethics policy (the “Code of Conduct”).

This policy covers a wide range of business practices and procedures and applies to our officers, directors, employees, agents, representatives, and consultants.

In addition, we have implemented whistleblowing procedures designed to facilitate the report of accounting and auditing matters as well as Code of Conduct matters (the “Whistleblower Policy”) that sets forth procedures by which any Covered Persons (as defined in the Whistleblower Policy) may report, on a confidential basis, concerns regarding, among other things, any questionable or unethical accounting, internal accounting controls or auditing matters with our Audit Committee as well as any potential Code of Conduct or ethics violations with our Nominating, Governance and Corporate Responsibility Committee or our Chief Legal Officer.

of Conduct or ethics violations with our Nominating, Governance and Corporate Responsibility Committee or our Chief Legal Officer.

We have adopted a Statement of Corporate Policy Regarding Equity Transactions that governs the process to be followed in the purchase or sale of our securities by any of our directors, officers, employees and consultants and prohibits any such persons from buying or selling our securities on the basis of material nonpublic information, and also prohibits our directors and officers from hedging equity securities of the Company, holding such securities in a margin account or pledging such securities as collateral for a loan.

We review all of these policies on a periodic basis with our employees.

See Exhibit 19.1 to this Form 10-K for these policies.

Our business is managed by our leadership team, subject to the supervision and oversight of our Board.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Environmental Metrics”.

We continue to implement the TCFD recommendations, and the recommended disclosures are located in this filing as follows;

• Governance - “Environmental and Social Responsibility and Corporate Governance”,

• Strategy - “Investment Strategy”

• Risk Management - “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors Impacting our Operating Results — Impact of climate of climate change on our future operations (Scenario Analysis)” and “Item 7A.

Quantitative and Qualitative Disclosures About Market Risk — Risk Management”, and

• Metrics and Targets - “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations - Environmental Metrics”.

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 continue to implement the TCFD recommendations, and the recommended disclosures will be included in our Sustainability and Impact Report, which is not furnished or filed with the SEC and is not deemed to be incorporated by reference into this document.

In addition to the above environmental reporting initiatives, beginning in 2022, we report our corporate emissions under PCAF, a voluntary 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.

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Our executive officers and other leadership team personnel and their biographies are provided below.

On February 13, 2025, we announced that Charles W.

Melko will become executive vice president and chief financial officer, Marc T.

Pangburn will become executive vice president and chief revenue and strategy officer, and Nathaniel J.

Rose will become senior managing director, each effective as of March 1, 2025.

Lipson , 57, has served as president and our chief executive officer since 2023.

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Previously, Mr.

Lipson was president and chief executive officer and director of Congressional Bancshares and its subsidiary Congressional Bank (now Forbright Bank).

Lipson has also been a senior vice president and the treasurer of CapitalSource Inc.

and its subsidiary CapitalSource Bank and a senior vice president, Corporate Treasury, at Bank of America and its predecessor FleetBoston Financial.

Lipson received a Bachelor of Science degree in Economics from Pennsylvania State University in 1989 and a Master of Business Administration in Finance from New York University’s Leonard N.

Lipson was president and chief executive officer and director of Congressional Bank (now Forbright Bank).

Lipson also previously served in various roles for CapitalSource, Bank of America, and its predecessor FleetBoston Financial.

Lipson received a Bachelor of Science degree in Economics from Pennsylvania State

University in 1989 and a Master of Business Administration in Finance from New York University’s Leonard N.

Stern School of Business in 1993.

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He holds a Series 63 and 79 securities licenses.

Santoroski , 59, has served as executive vice president and a 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.

Santoroski is responsible for integrating analytics across portfolio, investment, and risk-related decisions.

Previously, Mr.

Santorski served as co-founder and managing partner of Wye Holdings from 2017 to 2020.

From 2012 to 2016, he served as co-founder and managing director of American Capital Energy and Infrastructure (ACEI), an emerging markets investor in power generation projects across Africa, Asia, Latin America, and the Middle East.

Prior to ACEI, Mr.

Santoroski served as executive vice president, chief risk officer, and head of corporate mergers, acquisitions & development of The AES Corporation.

Prior to joining AES, he worked for several years at New York State Electric and Gas as an engineer and energy trader.

Santoroski received a Bachelor of Science degree in electrical engineering from Pennsylvania State University as

well as a Master of Science degree in electrical engineering and a Master of Business Administration degree from Syracuse University.

Viral Amin, 53, joined the Company as a senior vice president in 2023, and in 2024 became executive vice president and chief risk officer.

Amin leads the on-balance sheet portfolio management group and risk management functions, and supports the Company’s underwriting process.

Prior to joining the Company, Mr.

Amin served in a number of roles at DTE Energy, including its vice president of business development, strategy, and mergers and acquisitions of the unregulated portfolio company from 2018 to 2023.

While at DTE, Mr.

Amin held multiple commercial and strategic roles in the utility and non-utility businesses, and ultimately became responsible for the unregulated company’s investment activities overseeing its growth through sourcing, diligence, and execution of new projects in renewable and industrial energy.

Prior to joining DTE, Mr.

Amin worked for several years at Ford Motor Co.

and Visteon Corporation as an engineer.

Amin holds a Bachelor of Science degree and a Master of Science degree in electrical engineering from the University of Michigan, as well as a Master of Business Administration degree from the University of Michigan’s Ross School of Business.

Chuslo , 67, has served as an executive vice president and our general counsel and secretary since 2013 and our chief legal officer since 2021.

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Chuslo has served with the predecessor of the Company as general counsel and secretary since 2008.

Chuslo is responsible for governance support to the Board and management and oversees the Company’s legal resources in its investment and portfolio management activities.

Chuslo is responsible for governance support to our Board and management and oversees the Company’s legal resources in its investment and portfolio management activities.

Chuslo has more than 30 years of experience in the fields of securities, commercial and project finance, energy project development, and U.S.

federal regulation.

Chuslo received a Bachelor of Arts degree in History from the University of Massachusetts/Amherst and a Juris Doctorate from the Georgetown University Law Center.

Chuslo received a Bachelor of Arts degree in History from the University of Massachusetts/Amherst and a Juris Doctor from the Georgetown University Law Center.

Katherine McGregor Dent , 52, has served as our senior vice president and chief human resources officer since April 2020, focusing on culture, strategy, and organizational development.

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Melko served in a number of roles at PricewaterhouseCoopers LLP, 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, a Master of Business Administration degree and a Master of Science degree in Accountancy from Wheeling Jesuit University.

Melko received a Bachelor of Science degree in

Accountancy, a Master of Business Administration degree and a Master of Science degree in Accountancy from Wheeling Jesuit University.

Melko holds a CPA license in West Virginia and Maryland and is also a Certified Treasury Professional (CTP).

Amanuel Haile-Mariam , 44, 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.

Amanuel Haile-Mariam , 45, has served as a senior managing director since 2024.

Haile-Mariam joined the Company as a managing director in 2021 and is responsible for the Company’s structured investments in Grid-Connected renewable energy markets.

Prior to joining the Company, Mr.

Haile-Mariam worked at GE Energy Financial Services for 15 years, most recently as Managing Director - Head of Capital Advisory and Portolio, Americas leading the execution, asset management, capital raise and divestment of energy infrastructure projects.

Haile-Mariam worked at GE Energy Financial Services for 15 years, most recently as Managing Director - Head of Capital Advisory and Portfolio, Americas leading the execution, asset management, capital raise and divestment of energy infrastructure projects.

Prior to joining GE Energy Financial Services, Mr.

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Haile-Mariam received his Bachelor of Science degree in accounting and Master of Business Administration in finance from the University of Connecticut.

Annmarie Reynolds , 54, 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.

Annmarie Reynolds , 55, has served as a senior managing director since 2024.

Reynolds joined the Company as a managing director in 2022 and is responsible for building and growing the Company’s investment in markets beyond current asset classes.

Prior to joining the Company, Ms.

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Reynolds received her Bachelor of Science degree in Mechanical Engineering from Rutgers University, The State University of New Jersey.

Daniela Shapiro , 49, 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.

Daniela Shapiro , 50, has served as a managing director since 2024.

Shapiro 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.

Shapiro has over 20 years of energy industry experience.

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Shapiro received her Bachelor of Science degree in Electrical Engineering from UNIFEI in Brazil, and her Master of Business Administration degree from Northwestern University’s Kellogg School of Management.

Viral Amin, 52, joined the Company as a senior vice president in 2023, and leads the on-balance sheet portfolio management group.

Prior to joining the Company, Mr.

Amin served in a number of roles at DTE Energy, including its vice president of business development, strategy, and mergers and acquisitions of the unregulated portfolio company from 2018 to 2023.

While at DTE, Mr.

Amin held multiple commercial and strategic roles in the utility and non-utility businesses, and

ultimately became responsible for the unregulated company’s investment activities overseeing its growth through sourcing, diligence, and execution of new projects in renewable and industrial energy.

Prior to joining DTE, Mr.

Amin worked for several years at Ford Motor Co.

and Visteon Corporation as an engineer.

AVAILABLE INFORMATION

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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.

What changed 10-K

Item 1. Business