Climate Change Data

Environmental Metrics

ESG Focus Areas

• Equitable and sustainable access to homeownership
• Quality affordable rental housing
• Diversity in capital markets
• Environmental sustainability
• Social impact

Environmental Achievements

• 10.9B projected kilo British Thermal Units (kBtu) of source energy saved
• 9.0B projected gallons of water saved
• 717K projected metric tons carbon dioxide equivalent (MTCO2e) of GHG emissions prevented
• 24.1K housing units retrofitted or green building-certified
• Awarded the 2022 ENERGY STAR® Partner of the Year – Sustained Excellence Award

Social Achievements

• Launched Homeview™, a free online homeownership education course
• Enhanced Desktop Underwriter® (DU®) to deliver new benefits to borrowers with no credit score
• Launched pilot programs for multifamily positive rent payment and special purpose credit program (SPCP)
• Released the Single-Family Social Index
• Basis Investment Group, a certified Minority- & Women-Owned Business Enterprise (MWBE) joined our DUS® program

Governance Achievements

• Celebrated Awarded Best Places to Work for LGBTQ+ Equality, Human Rights Campaign, Corporate Equality Index (100% score) in 2022.
• Continued service on ICMA’s Executive Committee of the Principles for Sustainable Finance.

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB, TCFD

Awards & Recognition

• 2022 ENERGY STAR® Partner of the Year – Sustained Excellence Award

Environmental Metrics

ESG Focus Areas

• Business ethics
• Climate resilience
• Climate risk
• Community engagement
• Data privacy & security
• Diversity & inclusion
• ESG integration
• Green homes
• Housing affordability
• Housing stability
• Human capital management
• Racial equity in housing finance
• Regulatory engagement
• Risk management

Environmental Achievements

• $10.5B in Green Bonds issued in 2022 backed by loans that were estimated to achieve: 59K more energy- and water-efficient housing units financed in 2022 through our Green Rewards and Green Building Certification multifamily financing products and mortgages backing our Single-Family Green Bonds. 888M kBtu of projected source energy savings, 341K mtCO2e of projected greenhouse gas emissions prevented, 116M gallons of projected water savings

Social Achievements

• Increased our paid parental leave benefit to 12 weeks of paid leave and added a caregiver benefit with the same amount to take care of a seriously ill family member(s). 9 in 10 employees would recommend Fannie Mae to friends and family as a great place to work. $10.3B in financing provided in 2022 for Multifamily Affordable Housing properties with restrictions that limit rents or impose income limits on renters. $32.7B single-family mortgages acquired in 2022 from minority- and/or women-owned firms. 330 scholarships provided to aspiring appraisal professionals in 2022 through the Appraisal Diversity Initiative. Launched the Single-Family Social Index Framework. 179K people completed the HomeView® homeownership education course in 2022. 105K rental units onboarded into our Multifamily Positive Rent Payment Reporting Pilot program in the last four months of 2022, enabling these households to make their on-time rent payments count toward building their credit.

Governance Achievements

• Appointed a Chief Diversity & Inclusion Officer who reports to the President and is a member of our management committee.

Climate Goals & Targets

Environmental Challenges

• Climate change presents both immediate and long-term risks to Fannie Mae and other stakeholders in the housing system, including borrowers, renters, lenders, investors, and insurers.
• The costs of insurance, resiliency and retrofit measures, and rebuilding could put quality housing out of reach for many more people.
• Increases in the intensity or frequency of weather-related disasters could strain the mitigants we currently employ.
• As coverage for certain perils (e.g., wind, wildfire) becomes unavailable or prohibitively expensive in an area, home prices or multifamily property values may be negatively impacted, borrowers may face increased financial strain, and fewer loans in the area may be eligible for acquisition by Fannie Mae.

Mitigation Strategies

• Our climate strategy is built around three pillars: Exposure, Mitigation, and Awareness.
• For physical hazards, insurance is our most important buffer and mitigation measure.
• Risk sharing or credit risk transfers.
• Fannie Mae’s Incident Management Center, which assesses Fannie Mae assets for potential impacts from natural disasters.
• Working to increase awareness of climate-related risks, protecting current and future housing stock, and supporting disaster recovery and rebuild efforts.

Supply Chain Management

Responsible Procurement

• Equal Opportunity in Employment and Contracting statement
• Business Partner Code of Conduct
• Supplier Diversity program

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Wildfires
• Major storms
• Sea level rise
• Sustained higher temperatures
• Droughts
• Heat waves
• Decreased arability of farmland
• Decreased habitability of land
• Decreased availability of fresh water

Transition Risks

• Regulatory changes
• Market shifts
• Changes in consumer perceptions of value on home location, price, and other characteristics

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB, TCFD

Third-party Assurance: Deloitte & Touche LLP

UN Sustainable Development Goals

• Goal 1 (No Poverty)
• Goal 7 (Affordable and Clean Energy)
• Goal 10 (Reduced Inequalities)
• Goal 11 (Sustainable Cities and Communities)

Our Sustainable Bond Framework, first published in 2020 and updated in 2022, details the processes and criteria we use to distinguish our Social and Green Bond offerings.

Sustainable Products & Innovation

• Green Rewards Mortgage Loans
• Green Building Certification Mortgage Loans
• HomeStyle Energy® mortgage loan
• Single-Family Green Bonds
• Multifamily Green Bonds
• Multifamily Social Bonds

Awards & Recognition

• 2023 ENERGY STAR® Sustained Excellence designation for being “Partner of the Year” for nine years running.

Environmental Metrics

ESG Focus Areas

• Climate transition risk
• Physical climate risk
• Access and affordability of housing
• Impact on communities

Environmental Achievements

• More than a decade of track record of green MBS investments and is one of the largest issuers of green financing in the U.S.
• Successful track record of green MBS financing with positive environmental impact in terms of energy efficiency, avoiding greenhouse gas (GHG) emissions, through its financed projects.

Social Achievements

• Indirectly funding affordable housing through various programs
• Offering unique housing solutions to make loans affordable for low-income and first-time buyers, with schemes such as low down-payments home mortgage offerings to credit-deprived and underserved populations.

Governance Achievements

• Commitments to verify certifications and energy use reductions for financed properties
• Successful track record of impact reporting for the past issuances with metrics for both environmental and social outcomes.

Climate Goals & Targets

Environmental Challenges

• Eligible projects may include new construction with fossil fuel boilers, which may reduce the potential emissions savings.
• Physical climate risk is a significant issue not directly addressed in the financing framework.
• The framework lacks considerations for the embodied and end-of-life materials management of the properties financed.
• Water stress and scarcity definitions can vary. Given Fannie Mae’s broad service area, the achieved environmental benefit from water certifications will depend largely on where the financed projects are located.

Mitigation Strategies

• Demanding energy efficiency requirements of the eligible projects
• Fannie Mae addresses climate transition risk through its single-family green financing program, which finances buildings that are environmentally sustainable, having either green building certifications or use of onsite renewable energy.
• Fannie Mae aims to mitigate climate transition risk through the projects financed under its single-family Green Bond framework.
• The framework's focus on financing single-family housing green building projects ties directly to transition risk for the issuer's loan portfolio through financed risk and the exposure of the buildings themselves.
• Issuer is currently working to improve its physical and transition risk analysis and has committed to re-evaluating metrics at a minimum every three years as it updates the framework.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• wildfires, floods, and storms
• rising sea levels

Transition Risks

• growing public, political, legal, and regulatory pressure to accelerate climate goals
• higher energy bills as power prices rise
• higher capital expenditures as upgrades are required to accommodate the energy transition and meet more stringent efficiency standards

Opportunities

• Incremental climate-related investments can require significant capital outlays but will potentially reduce the risk of obsolescence due to changes in regulation or climate goals.

Reporting Standards

Frameworks Used: Green Bond Principles, ICMA, 2021 (with June 2022 Appendix 1)