ABOUT MARKETS ESG INVESTORS NEWS CAREERS CONTACT ESG APPROACH, IMPACT & POLICIES OUR APPROACH 2020 HIGHLIGHTS PEOPLE PLANET GOVERNANCE PROSPERITY POLICIES Our Approach At Hannon Armstrong, we have historically and consistently aspired to be a leader in transparent reporting on financially material and comparable ESG metrics. We hope our reporting on many of these and other recommended metrics helps to drive transparency and alignment among companies, investors, and all other stakeholders – with the ultimate goal of building a more sustainable and inclusive global economy. We were the first U.S. public company to report the avoided emissions resulting from our investments – a disclosure most financial service companies and asset managers still neglect to provide – and one of the first to adopt reporting in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and to incorporate TCFD reporting into our SEC filings. To help reduce fragmentation and accelerate progress toward a generally accepted ESG standard in alignment with the UN Sustainable Development Goals (SDGs), our 2020 Impact Report has been designed around the four pillars of the common metrics for consistent reporting of sustainable value creation as developed by the World Economic Forum’s International Business Council: Principles of Governance, Planet, People, and Prosperity. Download PDF Our Impact 5.2 Million Cumulative metric tons of carbon dioxide (CO2) avoided annually through our investments, the equivalent to eliminating emissions from nearly 600,000 average U.S. homes every year 4 Billion Cumulative gallons of water saved annually from our investments, the equivalent to eliminating the annual water consumption in 80,000 U.S. homes every year >200,000 Quality jobs created by our investments in 48 states >170,000 School children supported by our energy efficiency upgrades to educational facilities funded by our investments >1.9 Million Veterans served by hospitals and other facilities that received energy efficiency upgrades funded by our investments Sustainable Development Goals The United Nations Sustainable Development Goals (SDGs) represent the biggest and most complex challenges of our time. At Hannon Armstrong, we prioritize the five SDGs that are most relevant to our expertise, business objectives and corporate citizenship goals. Our ESG Journey 2020 2019 2018 2017 2016 2015 2014 2013 Invested $1.9b in climate solutions Recorded highest annual CarbonCount in company history 2m MT of incremental annual reductions in carbon emissions Issued >$900m in green bonds Joined Partnership for Carbon Accounting Financials (PCAF) Enhanced DEU with board appointments, internal management, and expanded SEC filing disclosures Declared Social Dividend of $1m to capitalize newly launched Hannon Armstrong Foundation 2020 Highlights $1.9b invested in climate solutions Highest recorded annual CarbonCount in company history Joined Partnership for Carbon Accounting Financials (PCAF) 2m MT1 of incremental annual reductions in carbon emissions Expanded DEIJ2 disclosures in SEC filing Expanded Board with appointments of Clay Armbrister and Nancy Floyd >$900m issued in green bonds Internal management realignment enhanced DEIJ in C-suite $1m Social Dividend declared to capitalize newly launched Hannon Armstrong Foundation ESG Ratings Low Risk Top 6th Percentile in Global Universe ESG Corporate Rating A Top 10th Percentile B+ Top 10th Percentile R-FACTOR™ Outperformer Top 10th-30th Percentile People Diversity, Equity, Inclusion, and Justice (DEIJ) Strategy At Hannon Armstrong, we believe that our company is more than just the sum of individual roles, skills, and productivities. In addition, we recognize that fostering a supportive climate 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. We also believe it is inherently the right way to conduct business. As a result, we take a comprehensive, values-driven approach to diversity, inclusion, equity, and justice. Board Oversight In accordance with its charter, the Nominating, Governance and Corporate Responsibility Committee (NGCR) of our Board of Directors is responsible for oversight of all matters related to DEIJ, including identifying and vetting Director candidates (when vacancies arise), helping to formulate the company’s DEIJ strategy, and monitoring DEIJ performance metrics. Comprehensive Plan for Multiyear Impact In 2020, we engaged an independent DEIJ consultant and convened an internal DEIJ Working Group to identify specific DEIJ challenges facing our organization and develop a multiyear plan for addressing them. Key components of this plan include the below. We hope to provide more information on our progress on these initiatives in next year’s report. Talent Acquisition Business Resource Groups New Employee Onboarding Training and Professional Development Dashboard Metrics Human Resource Process Amendments 89% Independent Board Members 33% Women Board Members 11% Racial or Ethnic Minority Board Members Goals and Metrics Fundamentally, we aspire to the goal that our employees at each level of our organization are representative of the communities in which we operate. To this end, we have begun to track and report internally on key talent metrics including workforce demographics, critical role pipeline and diversity data, and engagement and inclusion indices. Further, we are committed to identifying and developing the talents of our next generation of leaders and better support our female and underrepresented employees in their onboarding, training, development, and progression within the Company. We remain committed to “equal pay for equal work” in compliance with applicable state law. To validate our commitment, we have engaged an independent firm to conduct a pay equity audit. We expect to provide additional disclosures around the outcome of this audit upon its conclusion. Planet Principles of Governance Internally managed, the business affairs of our company are conducted by our officers and employees under the direction of our President & CEO with the oversight of our Board. Our Board members – eight of whom are Independent – are elected annually by our stockholders. We recognize the importance of understanding, evaluating, and monitoring ESG-related opportunities and risks as part of our vision and strategy. The Nominating, Governance, and Corporate Responsibility Committee (NGCR) is responsible for periodically reviewing our strategies, activities, and policies including our Sustainability Investment Policy, Environmental Policies, and Human Rights and Human Capital Management Policies. Nominating, Governance and Corporate Responsibility Committee of the Board of Directors Chairman and CEO ESG Committee ESG Staff Committee Leader Investor Relations and ESG Strategy | Finance | Accounting | Investments | Legal | Human Resources | Communications | Portfolio Management Prosperity Financial Performance Distributable Earnings per Share Dividends per Share 1) See the Non-GAAP Financial Measures section of our 2020 Form 10-K for an explanation of Distributable Earnings, Distributable Net Investment Income, Portfolio Yield, and Managed Assets, including reconciliations to the relevant GAAP measures, where applicable. 2) Distributable ROE is calculated using distributable earnings for the period and the average of the ending quarterly equity balances in 2020 and 2019. Corporate Foundation We created the Hannon Armstrong Foundation in early 2021 to add a strategic, long-term lens to our maturing corporate philanthropy efforts – tied to specific focus areas and committed to impact measurement. This flowed from an organic expression of shared values that fits naturally within our culture of fierce curiosity and rigor about outcomes in climate investing. In early 2021, we declared an initial “Social Dividend” to the foundation of $1 million. Vision We seek to accelerate local impact a just transition toward an equitable, inclusive, and climate positive future. Focus Areas Climate Solutions Innovative organizations and projects that preserve and restore our natural resources and develop new solutions to pressing climate challenges Equity, Inclusions, and Empowerment Empowering and creating opportunity for marginalized individuals and communities Local Impact Initiatives that strengthen the social fabric and promote economic and climate resilience Policies For additional information on our ESG strategy, policies, and initiatives, you can navigate to the linked documents. Sustainability Investment Policy Business Partner Code of Conduct Human Rights and Human Capital Management Policies 2020 Sustainability Report Card Corporate Governance 2020 Emissions Data Environmental Policies 2020 Environmental Metrics Tax Strategy and Governance 1906 Towne Centre Blvd Suite 370 Annapolis, MD 21401 Phone 410-571-9860 Fax 410-571-6199 Price: $57.10 Change: -3.03 (-5.04%) Volume: 477.47K Quote on minimum 15 minute delay. 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