Responsible Investments

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CHAPTER 3

Responsible Investments

5 min read June 17, 2020
Responsible Investments

MIM’s ESG integration efforts identify investment practices that MIM believes will support a better, more confident world for everyone.

MIM has a long history of responsible investing. We define responsible investments as investments that achieve both a market financial return and promote social and/or environmental benefits. MIM’s responsible investments focus on the following core areas:

RESPONSIBLE INVESTMENTS UNDER MANAGEMENT1

(in millions)
Infrastructure - $23,318 - 40%
Green Investments - $18,329 - 31%
Municipal Bonds - $13,586 - 23%
Affordable Housing - $2,972 - 5%
Impact Investments - $240 - 1%

Energy efficiency

MIM’s real estate equity team and other asset managers conduct due diligence on all new acquisitions, including a formal review of a broad spectrum of ESG risks and opportunities. Risks and opportunities evaluated include factors such as overall building performance and energy efficiency, viability of green certifications like LEED and ENERGY STAR®, indoor environmental quality, occupant health and safety, toxic materials, environmental assessments, and compliance with accessibility regulations.

In 2019, new MIM-directed responsible investments increased by almost $10 billion.

Access to energy helps combat poverty in Peru

In 2019, MIM partnered with the Peruvian government for a first-of-its-kind project to bring electricity to rural communities in Peru through solar installations. Access to energy represents one of the most critical steps in combating poverty. In all, the project financed 200,000 rural off-grid solar kits, and helped resolve several important elements that are intrinsically tied to access to energy. With solar-powered energy, the community now has ready access for charging mobile phones, better healthcare services delivered around the clock with access to lights and refrigeration, and new education opportunities with schools operating outside daylight hours and incorporating new technologies to enrich the experience. The project also marked the first time MIM financed an off-grid solar project in Latin America, with our investment team making significant efforts to understand, underwrite, and explain the transaction (including knowledge of the Peruvian electricity system, government concessions, and local laws) in order to bring the project to fruition.

Protecting natural resources with
The Conservation Fund

MIM directed a $25 million investment in The Conservation Fund, a nonprofit organization founded in 1985 with a mission to protect America’s land and water resources through land acquisition and sustainable economic development. The funding was to facilitate expansion in the Conservation Fund’s Working Forest Fund program, which aims to conserve large intact forests that can be sustainably managed for timber production and recreational uses under conservation easements. These forests would otherwise be at high risk of fragmentation and the eventual loss of both their climate and environmental values, as well as their vital role in many local communities. The Conservation Fund’s other primary business is providing capital and technical help to conserve their most important natural and cultural resources, usually by acting on behalf of public agencies to temporarily acquire lands and buy time for permanent conservation outcomes.

Solar Renewable Energy
Off-Grid Solar Renewable Energy Project, Peru. Photo provided by Ergon.

Building affordable homes in the U.K.

MIM directed a £110 million investment in GreenSquare Group (“GreenSquare”), a U.K.-based company specializing in providing affordable housing for social rental and shared ownership. In 2019/2020, GreenSquare completed 290 new homes in its operating area of Oxfordshire, Wiltshire, and Gloucestershire in the U.K. For MIM, helping underserved low- and moderate-income people and communities achieve financial independence through affordable homes is an important element of responsible investing.

Affordable loans for affordable housing

Habitat for Humanity affiliates across the U.S. will have access to flexible and affordable loans to expand affordable housing through a 2019 $15 million MetLife term loan commitment to the organization’s U.S. Treasury-certified Community Development Financial Institution (CDFI).

Habitat for Humanity International created a CDFI to lend to the local Habitat affiliates across the U.S. through its Habitat Mortgage Solutions platform. MetLife is the first term lender to support the Habitat CDFI. The transaction builds on more than 20 years of lending by MetLife to support Habitat’s work in the U.S. Habitat supports the financial health of homebuyers with financial education and affordable mortgages, with monthly payments limited to no more than 30% of the family’s income.

The Terraces
The Terraces, Atlanta, Georgia. 2019 ESG Challenge National Champion and Southeast Regional Winner.

Encouraging energy conservation with the ESG Challenge

As a responsible real estate investor, MIM manages and operates our real estate investment portfolio with a focus on ESG integration, which we believe results in enhanced value for our clients, tenants, residents, and local communities. We aim to create value for our investment portfolio by increasing efficiency and sustainability as well as improving operational and financial performance.

To illustrate our commitment to ESG integration efforts, we’ve developed an annual program, referred to as the “ESG Challenge,” to encourage third-party property teams to reduce energy consumption. This program recognizes and celebrates investment properties that have made significant progress toward our energy efficiency and sustainability goals. Each year, an ESG assessment survey is sent to all investment property teams, asking them to highlight innovative sustainability initiatives and/ or successful energy reduction efforts. MIM reviews applications and awards winners with a plaque recognizing their achievements.

In 2019, winners were given additional recognition through case studies, highlighting the value of ENERGY STAR resources and achieving ENERGY STAR certification. To promote further progress and further embed best practices across the MIM-managed real estate investment portfolio, successful energy efficiency strategies implemented by the winners were summarized and circulated to all property teams in an educational document called “10 Winning ESG Strategies.”

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1 As of December 31, 2019