Long before the term “impact investing” was coined, we recognized that our financial capital could – and should – do more than generate a financial return. During the Great Depression, Prudential’s farm and home mortgage business went to great lengths to help customers avoid foreclosure. After World War II, Prudential established a loan department to provide financing to small and medium enterprises that were desperately in need of capital. These business lines still exist in some form today, living proof that being a responsible corporate citizen and focusing on long term outcomes is actually good for business.
We continue to invest in established sectors that benefit society such as affordable housing, renewable energy and agriculture. Nevertheless, there still exist communities and individuals whose needs are underserved by traditional capital markets. Prudential formalized its impact investing program in 1976 to identify these market inefficiencies and craft investment solutions that generate an appropriate risk-adjusted return while driving social change. As markets evolve, many impactful assets have become investable assets by mainstream investment standards.
- Prudential founded
- Invests in affordable housing project in Newark, NJ
- Establishes a Loan Department to finance small and medium enterprises
- Impact Investing Program is formalized
- $1 billion in impact investments made to date
Prudential Mortgage Capital Company begins affordable housing production
- Commits to building a $1 billion impact investment portfolio by 2020
How We Work
Our strategy targets three core approaches, with the goal to have a positive, measurable impact on a pressing social challenge across our shared focus areas. We believe that impact measurement is a critical tool to gauge the success of our investments and utilize third-party standards and measurement tools wherever available.
- Social Purpose Enterprises—We invest directly and indirectly in for-profit and nonprofit social purpose enterprises that create affirmative social good. As a GIIRS (Global Impact Investing Network) Pioneer Investor, we have an investment preference for GIIRS-rated companies and funds to measure social impact.
- Through both impact investments and grants, Prudential supports the Freelancers Insurance Company, a social purpose business owned by Freelancers Union which supports efforts to promote the interests of independent workers through advocacy, education, and services. Founded in 2009, it provides high-quality, affordable health coverage to over 25,000 freelancers and their families, 37 percent of whom previously lacked coverage.
- Financial Intermediaries—We support community banks, microfinance institutions and nonprofit financial intermediaries that are able to redeploy institutional capital to nonprofits, small businesses and individuals.
- Prudential helped launch The Disability Opportunity Fund, the first ever Community Development Financial Institution focused exclusively on housing and other social services for individuals with disabilities. Since its inception, Prudential remains its largest investor.
- Real Assets—Capitalizing on the company’s deep roots in urban communities such as Newark, NJ, we continue to invest in real assets that improve the lives of both individuals and communities at large.
- Habitat for Humanity International developed the FlexCAP Program to provide liquidity to its local affiliates and generate more building activity. Since 1997, Habitat has raised approximately $156 million in FlexCAP financing for more than 280 affiliates. Among the first institutional investors in the FlexCAP program, Prudential has invested over $32 million to date and is the program’s largest investor.
Since 1976, Prudential has invested more than $2 billion in impact investments, of which nearly $360 million has been deployed in our headquarters city of Newark, NJ in the last decade alone. We invest across a broad array of asset classes, including long-term private debt and equity, real estate equity and mortgages, REITs, preferred stock, asset-backed securities and other structured products. The current portfolio has just over $850 million in total commitments.
Learn more about Impact Investing from the Global Impact Investing Network
Learn more about B Analytics and GIIRS