Delivering near- and long-term value for Prudential’s shareholders and customers requires the company to invest in and achieve sustainable financial and operating performance annually. In particular, managing the risks of climate change and strengthening environmental resilience is both a challenge and an opportunity for Prudential and its customers.
PGIM, the asset management business of Prudential Financial, is a member of the Ceres Investor Network on Climate Risk and Sustainability. This network comprises more than 130 institutional investors, collectively representing more than $17 trillion in assets, advancing leading investment practices, corporate engagement strategies and policy solutions to build an equitable, sustainable global economy and planet.
As an investment fiduciary, PGIM follows client guidelines for their portfolios. As part of investment due diligence reviews, PGIM considers environmental, social and governance risks, as they may be material in an asset class or in a particular deal. In addition to managing risks, PGIM also has found opportunity in a variety of “green” businesses.
Alternative Energy Investments
Prudential invests its own and client assets in renewable power generation. During 2016, the market value of that portfolio increased nearly 18.75% percent over 2015, with more than $3.8 billion invested in a range of renewable power projects at year end 2016.
Green Real Estate
PGIM Real Estate is one of the largest managers of worldwide institutional real estate assets. As a business, it incorporates sustainability practices into the real estate investment process and the management of its global portfolio. The goals: increased operating efficiency, contributing to delivering superior risk-adjusted returns for investors, cost savings and health benefits for property occupants, while being a good global citizen and respecting the needs of all stakeholders. As of December 31, 2016, PGIM Real Estate managed 27.2 million square feet of LEED Green U.S. real estate totaling $13.7 billion. Including LEED certifications, internationally recognized green building certifications covered 34.9 million square feet and were valued at $17.7 billion (as of 12/31/16).
Click here to read PGIM Real Estate’s most recent Sustainability Report.
Prudential Fixed Income- a PGIM business- began investing in green bonds in 2013. “Green bonds” are debt instruments used to finance environmental initiatives like energy efficiency or renewable energy projects. The market value of Prudential’s green bonds totaled more than $380 million at the end of 2016.