Better Health for All

Ares Capital Corporation's core business is providing direct lending and financing solutions to middle-market companies.

While its investment portfolio includes companies in the healthcare sector, the provided articles do not offer specific details on the health impact of the products or services of these portfolio companies, nor do they indicate any direct health impact from ARCC's own operations. Therefore, the net health effect of the firm's principal goods or services is considered neutral.

Fair Money & Economic Opportunity

Ares Capital Corporation (ARCC.US) primarily provides direct lending to middle-market companies, not individual consumers.

Therefore, several KPIs related to consumer financial products, such as underserved client share, pricing fairness, exploitative fee exposure, wealth building outcomes, debt burden ratio, geographic inclusion, and product simplicity, are not applicable to its core business model. The company does not offer consumer credit products, nor is there evidence of revenue from high-cost consumer products. While the Ares Charitable Foundation supports disabled founders, Latino entrepreneurs, and low-income women, and Ares (the parent company) has DEI initiatives, these are not reflected as a share of ARCC's loan book or direct financial literacy programs for its clients. Ares Management, the external manager of ARCC, was fined $1 million by the SEC in 2016 for compliance failures related to a portfolio company, specifically for not sufficiently inquiring whether a board representative possessed material nonpublic information before a stock purchase.

Fair Pay & Worker Respect

For the 2024 fiscal year, the CEO to median employee pay ratio was 356:1, with the CEO's total compensation at $85,381,842 and median employee pay at $240,000.

Employee reviews on Glassdoor show an overall rating of 3.9 out of 5 stars, with 70% of employees recommending the company and 80% having a positive business outlook. In the past three years (2022-2024), there have been 7 substantiated labor-law violations, including 4 workplace safety or health violations, 2 wage and hour violations, and 1 labor relations violation, with associated penalties.

Kind to Animals

Ares Capital Corporation (ARCC.US) is a financial services company that invests in other businesses. While one article notes that ARCC invests in companies that exploit animals, such as American Seafoods Group LLC, ADF Restaurant Group, LLC, and Yum! Brands, Inc.

, the provided evidence does not contain specific data points for any of the 'Kind to Animals' KPIs directly related to ARCC's own operations or its direct control over the animal welfare practices of its portfolio companies. The articles explicitly state that there is no information available regarding cruelty-free certifications, animal testing, humane certifications, wildlife conservation impact, ethical input substitution, supplier audits for animal welfare, cage-free sourcing, animal agriculture ethics, or any related policies, volumes, or investments in animal-free alternatives. Therefore, no KPIs can be scored based on the provided evidence.

No War, No Weapons

The provided articles indicate that Ares Capital Corporation (ARCC.US) has investments in companies involved in the defense and military aerospace industries, including manufacturers of precision components for defense platforms, providers of military aircraft aftermarket parts, and systems engineering support for the US Department of Defense.

However, the articles do not provide specific quantitative data on the percentage of ARCC.US's revenue derived from these defense-related investments. While Ares (the parent company) made a $1 million donation for humanitarian aid, the proportion of ARCC.US's revenue allocated to peacebuilding or disarmament initiatives is not disclosed. Information regarding dual-use technology R&D, sales to embargoed regimes, conflict divestment policies, board oversight of defense activities, export controls, lobbying for arms control, human rights due diligence in conflict zones, or any other specific KPIs for the 'No War, No Weapons' value is not available for ARCC.US. Therefore, there is insufficient evidence to score any of the KPIs.

Planet-Friendly Business

Ares Management's total carbon footprint for 2024, including Scope 1, 2, and 3 emissions (primarily financed emissions), was 60,020,540 tCO2e, which increased by 10.67% from 2023.

The company has no SBTi-aligned targets in place for its own operations, though one portfolio company is aiming for validation. In 2023, 28% of new corporate office leases were in LEED/BREEAM certified buildings. Waste management initiatives include eliminating plastic water bottles and enhancing recycling and composting, but a specific diversion rate is not provided. A whole life cycle carbon assessment was conducted for one construction project. For a specific project, lower carbon cement with 36% higher recycled content and steel with over 20% recycled content were used. Ares procures carbon credits from nature-based carbon removal projects, validated by Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB) Standards, and evaluates them using Core Carbon Principals. Ares Climate Infrastructure Partners has invested over $2.7 billion in assets and projects for a decarbonized future. The company is expanding its ESG survey to cover more asset classes and climate-related questions. Biodiversity efforts include planting 4,551 trees at operating locations and supporting grassland restoration through carbon credits. Ares Management has incurred $4,535,430 in environment-related penalties since 2000, with 14 records, including a $2,362,500 hazardous waste violation in 2015. The company completed 12-15 environmental impact assessments annually for real estate investments. A net-zero target year is not publicly committed for the company, though a portfolio company has a 2040 carbon neutrality goal. The company's TCFD reports are aligned with recommendations, and it evaluates methods for portfolio-wide climate risk assessment and scenario analysis. Fossil fuels represent less than 5% of Ares' footprinted invested assets. The CREST program, a 5-year, $25 million initiative, has placed over 25,000 individuals in green jobs and reskilled 1,000 workers in India. Ares Real Estate incorporates physical climate risk assessments into diligence, with examples of adaptation measures like flood gates and elevated electrical equipment.

Respect for Cultures & Communities

No cultural appropriation incidents are reported.

The company's business model as a finance company does not typically involve activities that would necessitate a cultural impact assessment protocol or Free, Prior, and Informed Consent (FPIC) processes, nor does it operate near cultural or heritage sites in a way that would lead to disruptions.

Safe & Smart Tech

Ares Capital Corp has not experienced an information security breach incident that has materially affected its business strategy, results of operations, or financial condition, with immaterial expenses from any incidents.

The company's cybersecurity program is aligned with the NIST Cybersecurity Framework, includes technical controls, monitoring, and periodic internal and external security reviews. It states compliance with GDPR and CCPA, and uses European Commission’s model contracts for international data transfers. The company uses reasonable electronic safeguards to protect personal information and undertakes periodic identification and testing of vulnerabilities. Annual general cybersecurity awareness and data protection training is provided for employees, along with annual certification requirements. Security testing includes troubleshooting, data analysis, testing, research, statistical, and survey analysis. However, the company retains personal information from its 'Contact Us' page for seven years and Google Analytics cookies for two years, which are longer retention periods. Authentication security is limited, with only registered investors having access to a private portal, and no mention of multi-factor authentication (MFA) availability. Privacy considerations are mentioned for website personalization and improvement, but there is no evidence of comprehensive privacy-by-design integration across products.

Zero Waste & Sustainable Products

No specific data or metrics related to waste diversion rates, product recyclability, packaging sustainability, recycled content, single-use plastic reduction, take-back programs, circular design principles, waste reduction initiatives, hazardous waste management, product durability, repairability, waste audit frequency, zero waste certification, waste disposal violations, material efficiency, packaging-to-product ratio, waste reduction targets, supplier waste requirements, or customer waste education for ARCC.US were found in the provided articles.

The articles primarily focus on carbon emissions or general ESG strategy for Ares Management Corporation, without granular data on waste and sustainable products for Ares Capital Corporation (ARCC.US).