On Wednesday, Fannie Mae, the U.S. home mortgage financier that operates under a charter from the U.S. Congress but is publicly traded, released its annual Green Bonds report detailing the environmental, social and economic benefits of its Green Bonds program. Fannie Mae’s issuance of $88 billion of Multifamily Green Mortgage-Backed Securities (MBS) from 2012 through 2020 make it the largest green bond issuer in the world, along with another $11 billion in re-securitizations of Multifamily Green MBS into the pooled investment vehicles known as Real Estate Mortgage Investment Conduits (REMICs).
In 2020 alone, the company reports, it issued $13 billion of Multifamily Green MBS, and after introducing its first Single-Family Green MBS in April 2020, issued nearly $94 million in Single-Family Green MBS during the year.
Cumulatively, per the report, Fannie Mae Green Bonds resulted in resource savings of 9.5 billion kilo British Thermal Units (kBtu) of source energy, 8.5 billion gallons of water, and 634,000 metric tons of carbon dioxide equivalent of greenhouse gas emissions.
At the household level, this translated to $146 million in utility cost savings by multifamily tenants (averaging $184 per family per year), and $843 in average homeowner utility cost savings per single-family home per year. As part of the Green Bond program, the company says 872,000 properties have been retrofitted or green-building-certified since 2012, creating or supporting 224,000 well-paid jobs and generating $2.83 in economic output per dollar invested.
Shades o’ Green
Fannie Mae Green Bonds, which are aligned to the ICMA (International City/County Management Association) Green Bond Principles, incentivize retrofitting existing properties with efficiency measures, installing renewable energy systems, and building new green-building-certified properties and homes to increase energy- and water-efficiency and reduce greenhouse gas emissions. The company’s Green Bond Frameworks have been evaluated as “Light Green” or better by CICERO, a global provider of green ratings for bonds that evaluates sustainable debt instruments on a “Shades of Green” scale.
“We are proud to share the positive impacts enabled by Fannie Mae’s Green Bond Business and the role it continues to play in building more sustainable housing across the country,” said Laurel Davis, Fannie Mae’s Senior Vice President and Head of Environmental, Social, and Governance. “Our Green Bonds reflect Fannie Mae’s long-standing mission to ensure that affordable and stable housing is accessible and that innovative, high-quality green investment opportunities are available for fixed-income investors worldwide.
“We are excited to expand on our progress to help more industry participants take advantage of the opportunities green bonds provide and to further grow an active global green bond market through the quality, transparency, and impact for which Fannie Mae is recognized,” she said.
