Main Street Capital Corporation
Climate Impact & Sustainability Data (2020, 2021, 2022, 2023, 2024)
Reporting Period: 2020
Environmental Metrics
ESG Focus Areas
- Environmental
- Social
- Governance
Social Achievements
- Developed programs and initiatives that promote an open and inclusive atmosphere and encourage employee outreach with our community, including a Volunteer Time Off program, a matching donation policy and partnerships with local charitable organizations.
Governance Achievements
- Adopted a resolution to amend the Charter to allow stockholders to amend bylaws by a majority vote.
Climate Goals & Targets
Environmental Challenges
- Significant challenges and negative impacts caused by the COVID-19 pandemic to the Company’s performance and the performance of the Company’s portfolio companies.
- Significant unrealized depreciation and realized losses in our investment portfolio.
- Decreased total investment income and net investment income from prior year, resulting in net investment income per share below the Company’s monthly dividends per share for the year.
- Discontinuation of the Company’s semi-annual supplemental dividend earlier than expected pursuant to the Company’s previously announced dividend transition plan.
Mitigation Strategies
- Successfully navigated the significant challenges and negative impacts caused by the COVID-19 pandemic while also maintaining our focus on achieving the Company’s long-term goals.
- Significant growth of the Company’s lower middle market and private loan investment portfolios.
- Transition of the Company’s wholly owned investment adviser into the role of sole adviser and administrator to MSC Income Fund, Inc.
- Significant recovery of a portion of the unrealized depreciation experienced in the Company’s investment portfolio after the impacts of COVID-19 in the first half of the year.
- Growth of our investment management team through the hiring and integration of several key additions.
- Continuation of our low total operating cost structure in comparison to peer organizations.
- Maintenance of an investment grade rating from Standard & Poor’s Ratings Services.
- Efficient use of our at-the-market, or ATM, equity offerings to issue equity as needed while maintaining a conservative leverage ratio.
- Amendment of our credit facility to increase the total commitments and further diversify the lenders participating in the credit facility.
- Issuance of incremental investment grade notes to diversify our capital structure and increase our liquidity during the COVID-19 pandemic.
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Period: 2021
Environmental Metrics
ESG Focus Areas
- Responsible Investment and Community Involvement
Social Achievements
- Our Community Building Committee, which is composed of a substantial cross section of employees across our organization, develops programs and initiatives that promote an open and inclusive atmosphere and encourage employee outreach with our community, in each case based upon feedback received from our employees.
- We are a dedicated proponent of local charitable and non-profit organizations. We support these charities with both monetary donations and the support of our employee’s time and talents through special Main Street team projects and the utilization of our Volunteer Time Off program.
Governance Achievements
- Seeking Board recommended amendment to our charter at the Annual Meeting to allow stockholders to amend our bylaws
Climate Goals & Targets
Environmental Challenges
- Contributions to the Company’s efforts to navigate the significant challenges and negative impacts caused by the COVID-19 pandemic to the Company’s performance and the performance of the Company’s portfolio companies
Mitigation Strategies
- Maintaining liquidity and capital flexibility, and when appropriate working to increase such liquidity and capital flexibility, to accomplish the Company’s business objectives and mitigate the potential impacts of unexpected economic volatility
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Period: 2022
Environmental Metrics
ESG Focus Areas
- Environmental, Social, and Governance (ESG)
Social Achievements
- Maintains a close-knit culture, reinforced by its Community Building Committee, which develops programs and initiatives promoting an open and inclusive atmosphere and encouraging employee community outreach.
Governance Achievements
- Adopted a Code of Business Conduct and Ethics; established Stock Ownership Guidelines for directors and officers; implemented a clawback policy on employee restricted stock grants; Board actively engaged in succession planning for Board members and key employees; ESG considerations incorporated into investment diligence and evaluation processes.
Climate Goals & Targets
Environmental Challenges
- Realized losses incurred on certain investments; increased number of non-accruals outstanding at year-end; lower than targeted and desired return on asset results in the Company’s middle market investment portfolio.
Mitigation Strategies
- Executing a strategy to decrease the size of its middle market investment portfolio due to the lower than acceptable returns on this asset class.
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Period: 2023
Environmental Metrics
ESG Focus Areas
- Environmental, Social, and Governance (ESG)
Social Achievements
- Maintains a close-knit culture, reinforced by the Community Building Committee, which develops programs and initiatives promoting an open and inclusive atmosphere and encouraging employee community outreach.
Governance Achievements
- Adopted a Code of Business Conduct and Ethics; established Stock Ownership Guidelines for directors and officers; adopted a Clawback Policy; implemented an annual say-on-pay vote; no poison pill.
Climate Goals & Targets
Environmental Challenges
- Lower than expected growth of lower middle market and private loan investment portfolios; realized losses on certain investments; less than desired improvement in non-accruals.
Mitigation Strategies
- Continued focus on increasing the portion of the investment portfolio comprised of lower middle market and private loan investment strategies; de-emphasizing the middle market investment strategy; driving significant improvements to business operations, capital structure, and liquidity position; efficient use of ATM equity offerings; expansion of corporate credit facility and special purpose vehicle financing facility; issuance of incremental investment grade notes.