MetLife Investment Management Europe Limited (the “Company”)
Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (the “Sustainable Finance Disclosure Regulation” or “SFDR”)
Statement under the SFDR
The MetLife group is committed to sustainability. With our purpose at our core—Always with you, building a more confident future—sustainability at MetLife means managing business responsibly and driving long-term value for our stakeholders. Aligned to our New Frontier strategy, our sustainability efforts demonstrate how we live up to our purpose, generate meaningful impact and deliver on the promises we make to our customers, people, communities and shareholders. As the world changes, our purpose demands that we evolve our strategy to continue delivering for our shareholders and other stakeholders.
Additional information about the MetLife group’s sustainability initiatives can be found within our annual Sustainability Report at https://sustainabilityreport.metlife.com/report/.
MetLife Investment Management (MIM), the MetLife group’s institutional investment management business, which includes MetLife Investment Management, LLC, MetLife Investment Management Limited (the “Delegated Investment Managers”) and the Company, serves institutional investors globally by combining a client-centric approach with long-established asset class expertise. MIM’s investment capabilities include deal origination, asset acquisition, trading, portfolio construction and monitoring, risk analytics and risk management. The Company has delegated investment management services with respect to the funds and portfolios under its management to the Delegated Investment Managers.
In accordance with Article 3(1) of SFDR, the Company, in conjunction with its MIM affiliates, integrates financially material sustainability risks and opportunities into its research, analysis and investment decision-making processes with regard to the funds and portfolios under the Company’s management.
MIM aims to deliver strong, risk-adjusted returns by building tailored portfolio solutions for clients across its core investment teams including fixed income, equities, private capital, and real estate. As a result, the investment analysts, asset originators, and portfolio managers are tasked with building and managing resilient portfolios. These responsibilities can include incorporating financially material ESG assessments into risk management focused investment processes, as well as offering strategies for, and knowledge sharing with, those clients who have defined sustainability objectives.
Approach to Stewardship
The Company and MIM both believe stewardship is an important part of sustainable investing efforts and the primary means to conduct stewardship is via engagement.
Stewardship efforts seek to raise awareness and improve data transparency and reporting. MIM engages with issuers, intermediaries, market participants, and policy makers. Engagement is conducted in a variety of ways, from individual engagements on specific issues, to participating in and hosting thematic engagements on specialist sustainability topics.
For more information about stewardship, including engagement, please refer to the MIM Stewardship Policy, which can be found at https://investments.metlife.com/about/sustainability/policy-documents/
Implementing Specific Client Mandates
Client directed guidelines can be incorporated into our investment process. We work with clients to establish guidelines based on their needs, which may include emissions targets, minimum third-party ESG scores, controversy screening on human rights and other types of violations, and other specified criteria. We can also work with clients to find solutions to address asset owner net zero pathways.
Shareholder Engagement
The Company has not published a shareholder engagement policy as the Company does not currently manage any funds or portfolios which invest in the shares of companies which are admitted to trading on a regulated market situated or operating within a member state of the European Economic Area (“EEA”) nor does it invest directly in shares traded on a regulated market in the EEA. Additional information about the Company’s policy in this regard can be found on our website at: https://investments.metlife.com/europe/regulatory-disclosures/srd-statement/
The Company’s position in this regard will be kept under review, and the necessary measures will be taken should the Company in the future manage funds or portfolios that can invest in shares as described above.
Asset class-specific information on the integration of sustainability risks in the investment decision-making process
The Company has appointed the Delegated Investment Managers to provide investment management services to the funds and portfolios under its management. The integration of sustainability risks and how those risks are managed is determined on an asset class-by-asset class basis by teams of portfolio managers and analysts specialised in specific asset classes (Investment Teams).
Fixed Income and Private Credit
MIM’s fixed income and private credit teams’ investment methodology is based on a disciplined, bottom-up research driven, security selection process. The teams take a holistic view in their assessments, such that financially material ESG considerations are evaluated alongside other financially material risks and opportunities to determine fair value at the issuer and security level. Additionally, we believe that engagement provides MIM’s research analysts with an opportunity to better understand financially material, relevant risk factors, and improve data transparency.
Real Estate and Agriculture Lending
MIM takes a holistic approach to sustainable real estate lending and investing. Driven by the objectives of each client, MIM incorporates deep knowledge and understanding of the asset, market, and green building industry to integrate financially material ESG considerations into asset and portfolio management strategies. At acquisition and origination, sustainability attributes and risk factors such as energy efficiency performance, green building certifications, physical climate risk and regulatory transition risk are analysed to identify factors that may impact financial performance. During the hold of an asset, energy, water, waste, and emissions data quality is fundamental and informs property-level and portfolio-level strategies to manage risk and provide strong returns while investing in the long-term impact of our buildings on the environment and for our communities. MIM’s agricultural finance group provides intermediate and long-term financing to farmers, ranchers, agribusinesses, and timberland owners in the U.S. and in select non-U.S. markets. Our loan origination process involves assessing financially material risks, including sustainability factors, when evaluating investment opportunities.
Listed Equity
The public equity investments MIM manages for unaffiliated clients are primarily U.S. exchange-traded domestic common equity securities. MIM’s equity teams’ investment methodology is based on a top-down and bottom-up research driven security process. Consideration of financially material ESG factors is made within the fundamental assessment of macro, sector, and company specific trends. Certain ESG factors can have the potential to reduce the cost of capital, reduce operating costs or increase the profitability of a company, which can, in turn, lead to higher investment returns.
Many of MIM’s asset teams have published supplemental information in support of their asset class specific sustainable investing processes, including ESG integration efforts and case studies. These documents can be found at https://investments.metlife.com/about/sustainability/policy-documents/.
This section is provided in accordance with Article 4 of the SFDR, which encourages financial market participants to disclose whether and how they consider principal adverse impacts of investment decisions on sustainability factors.
The Company is supportive of the aim of this requirement which is to improve transparency and investor understanding of how investment decisions impact sustainability factors across society and the environment.
Currently, the Company does not consider the principal adverse impact of investment decisions on sustainability factors at entity level. This is principally because of a lack of consistent, accessible and accurate data from the underlying portfolio companies. This challenge is particularly pronounced in the private credit asset class, where disclosure standards and data availability are more limited compared to the public fixed income asset class.
However, the Company does consider the impacts of its investment decisions on sustainability factors at a product level for certain funds.
At entity level, the Company will maintain the position of not considering principal adverse impacts on sustainability factors until such time as it feels it has the necessary data to be able to make these considerations meaningfully and report on them clearly.
The Company will review this position regularly and will update investors accordingly with relevant information, should the position change.
The Company has a remuneration policy which complies with the requirements of:
- the European Union (Alternative Investment Fund Managers) Regulations 2013;
- the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011;
- the Commission Delegated Regulation (EU) 565/2017; and
- the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2019.
The Company’s remuneration policy includes information on how it is consistent with the integration of sustainability risks in accordance with Article 5 of the SFDR.
The Company affirms that its remuneration policy is aligned with the Company’s approach to responsible investment including the incorporation of financially material ESG factors into investment decisions (where relevant) and seeks to ensure that its remuneration structures do not encourage excessive risk‐taking with respect to sustainability risks.
The Company carries out an assessment of the performance of its identified staff (as defined in the remuneration policy) when assessing and determining variable remuneration. Individual performance is assessed holistically using both quantitative and qualitative measures which may include goals related to financial performance, people and culture, business and customer, and an assessment of whether the relevant employee has complied with the Company’s sustainability policies, as applicable.
The Company ensures that the remuneration of identified staff is reasonably aligned with the interests of the Company and the funds and individual portfolios it manages and will promote effective risk management (including with respect to long and short-term interests, and sustainability risks where relevant).
The Company is authorised by the Central Bank of Ireland as a UCITS management company and AIFM, with the ability to carry out additional activities including the provision of investment advice under the MiFID top up permission.
The Company is committed to incorporating sustainability risks into its investment analysis. The Delegated Investment Managers’ Sustainable Investment policy considers financially material environmental, social and governance factors when evaluating and selecting investments. The MIM Sustainable Investment policy is available at mim-sustainable-investment-policy.pdf
The Company recognises the significance of our clients’ sustainability preferences and integrates them into our investment advice.
Where the Company provides a personal recommendation, as defined under MiFID II, the Company will incorporate sustainability into the provision of investment advice in accordance with clients’ sustainability preferences.
The Company does not currently provide investment advice on any SFDR classified article 8 or article 9 funds or client mandates. As such, the Company doesn’t currently take adverse sustainability impacts into account in the provision of investment advice.
This statement will be kept under review and updated to comply with the Company’s obligations under the SFDR.
