Green Real Estate & FHA
PGIM Real Estate invests across all property sectors throughout the United States. The business’s ESG objectives are to increase operational efficiencies and cost savings, to become a landlord of choice and align values with stakeholders. During 2019, PGIM Real Estate submitted 15 submissions to the 2019 GRESB survey representing more than 75% of PGIM Real Estate’s global AUM as of December 31, 2018. As of December 31, 2019, PGIM Real Estate managed 20.3 million square feet of LEED certified U.S. real estate totaling $10.9 billion (GAV). Global certifications totaled $18.1 billion (GAV) covering 31.9 million square feet.
In 2019, 15% of PGIM Real Estate Finance’s total FHA/ agency multifamily originations have been through green programs, 29% in 2018. The volume continues to decline solely because in 2019, Federal Housing Finance Agency (Fannie Mae and Freddie Mac’s regulator) changed the requirements for green financing by increasing the required energy and water savings to qualify.
Green Bonds
“Green bonds” are debt instruments used to finance environmental initiatives such as renewable energy efficiency projects.
Prudential through PGIM Fixed Income has invested in renewable energy, “green” bonds and “green” real estate. The market value for green bonds (corporates and munis) managed by PGIM Fixed Income is $2.72 billion as of year-end 2019.
In 2020, Prudential issued the firm’s first green bond with a principal amount of $500 million.