MetLife Investment Management

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ESG Integration

MIM serves institutional investors by combining a client-centric approach with long-established asset class expertise. MIM believes in the importance of investing sustainably and incorporating ESG factors, as appropriate, into investment decision making. As a well-established global investment manager, our investment teams are responsible for appropriately incorporating financially material ESG factors into their risk management-focused investment process. Focused on managing public fixed income, private capital and real estate assets, we aim to deliver strong, risk-adjusted returns by building tailored portfolio solutions that successfully integrate client-specified ESG investment considerations today and beyond. 

As ESG integration efforts in our industry evolve, so too will MIM’s approach. We seek to review and refresh our ESG Investment Policy at least annually. We work closely with our clients to provide transparency to our approach and adapt it, as needed, to meet our clients’ guidelines.

MIM

MIM applies 

Active Engagement

MIM believes active engagement with company and issuer leadership is key to managing investment risk. Investment analysts regularly interact and engage in discussions with a firm’s senior management. Ongoing dialogue helps raise awareness of sustainable business practices. Further details supporting our active engagement practices can be found within MIM’s Engagement Policy

Public Fixed Income1 

564

 incidents of active engagement: 

366

 related to environmental issues

99

related to social issues

99

related to governance issues

The

The

Active Engagement Tracking And Reporting

MIM’s public fixed income and private capital teams have recently developed in-house solutions to tag, track and report on our active engagement conversations. Our engagement conversations are guided by the Sustainable Accounting Standards Board (SASB) materiality mapping framework, which identifies relevant industry-specific ESG risks and opportunities for discussion with our investee companies. Notably, MIM’s Real Estate Debt and Agricultural Lending teams have developed in-house solutions to collect ESG-related data from borrowers at the time of loan origination. This data is also categorized in alignment with SASB’s framework. 

Public Fixed Income

Beginning with the initial due diligence process and as part of the ongoing monitoring process, analysts engage in ongoing dialogue with senior leadership to assess their business model resilience and responsiveness to the ESG factors impacting their business. Our proprietary Engagement Database is designed to be fully integrated into the research process and to allow each analyst to log and update engagement on ESG factors. The database includes deals that have been rejected due to a negative evaluation of these factors. 

Private Capital

MIM’s private capital team sees active engagement with investee companies and projects as key to both its initial underwriting process and ongoing portfolio management. When considering a potential investment opportunity, our credit analysts meet directly with the company’s senior management team to understand the sustainability of the company’s business model as well as management’s philosophy and how ESG risks are managed. 

If adverse findings are identified, we may pursue appropriate measures, which could include corrective action by the issuer, requirement of improved terms and conditions or not proceeding with a transaction. 

ESG Integration In Real Estate

MIM has been involved in real estate since 1878, and today provides debt and equity origination and asset management capabilities across offices in the U.S. and international markets, including the U.K., Japan, Korea, Chile and Mexico. MIM embraces our role as a responsible real estate investment manager and lender. We understand the impact buildings have on people, communities and the environment. We also know that issues such as climate change, regulatory environments and building operational efficiencies will increasingly impact lending decisions and financial performance.

Real Estate Equity

MIM offers investors strategies that seek to achieve income growth and capital appreciation by investing in competitively positioned properties in markets with favorable demand drivers.

Multiple MIM equity portfolios have achieved 5-Star status and been designated as “Sector Leaders” over the past two years in the Global Real Estate Sustainability Benchmark (GRESB).3

Real Estate Debt—Commercial Mortgage Lending

Our commercial mortgage loan business has a focus on office buildings, retail centers, apartment complexes, industrial properties and hotels. For example, MIM originated a $180 million commercial mortgage loan on Heron Water Street, a newly built LEED Gold apartment building in downtown Tampa, Florida, in the heart of the world’s first WELL4 pre-certified neighborhood, Water Street Tampa, which envisions a sustainable and environmentally friendly community. The property includes smart thermostats, WaterSense plumbing fixtures, solar shades, Energy Star appliances, electric vehicle charging stations and a bike storage and repair room. 

25% of all investments2 were powered with renewable electricity as of year-end 2021, and a power-procurement strategy was put in place to increase green power procurement.

25%

ESG Integration in Agricultural Lending

MIM’s Agricultural Finance Group clients provide long-term debt capital for farmers, ranchers, agribusinesses, forest products facilities and timberland owners, and we are proud of our role in building resilient communities and supporting sustainable agriculture for more than a century. 

ESG Integration in Private Equity

MIM’s Next Horizon Manager program is an initiative to support diverse emerging talent. The program helps female and/or ethnically and racially diverse-owned firms, with a focus on newer firms that target 50% ownership by females and/or professionals of color, who are looking to raise a fund of $500 million or less. MIM’s Next Horizon Manager program launched with a $50 million annual deployment target. MIM has engaged with more than 100 diverse managers and invested with five of them, for a total of $50 million on behalf of MetLife’s general account5 investment portfolio. 

 

MetLife is not only identifying opportunities to plant 5 million trees as part of our broader 2030 climate goals, we also facilitate transactions that have financial returns complemented by ESG outcomes. Although these financial transactions do not contribute to our goal count of 5 million trees, they help promote sustainable forest ecosystems in many different ways. 

MIM provided financing for a $625 million timberland transaction, consisting of long-term, first mortgage loans secured by approximately 832,000 acres of timberland and timber across the Southeastern United States. The financing allows Tamarack Timberlands, LLC, which is owned by Ontario Teachers’ Pension Plan and whose assets are managed by Resource Management Service, LLC, to complete this multimillion-dollar redemption transaction and assume direct ownership of its timberland assets in the U.S. South. The approach supports the protection of biodiversity, water and soil resources while contributing to climate change mitigation. 

More from this chapter

Learn more about our approach for our investments in the links below:

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MIM Public Fixed Income ESG-related active engagement conversations conducted in 2021.

2 MIM surveyed tenants to assess their interest in participating in the ENERGY STAR Tenant Space recognition program. Represents percentage of such MIM-managed and controlled real estate investments.

GRESB issues an annual assessment benchmarking properties’ performance in achieving ESG goals and compares each sector’s progress in achieving global sustainability standards. The top 20% within each sector of the benchmark receives the five-star rating.

4 Learn more about the WELL Community Standard.