Redwood Trust, Inc.

Climate Impact & Sustainability Data (2021, 2022)

Principal offices are Energy Star Certified; adopted sustainability policies for headquarters and satellite offices including energy-efficient lighting and appliances, and recycling and composting facilities; encouraged employees to adopt environmentally friendly practices through telecommuting policy and public transit program.
Less than 4% of properties funded by loans in Business Purpose Mortgage Banking were in flood zones.

Investment in Mosser Capital Fund I, a 100% minority- and women-owned organization focused on acquiring, renovating, and enhancing rent-regulated apartment properties in California; expanded credit products to better serve self-employed borrowers.
In 2021, 82% of the units in properties secured by term loans originated were considered affordable housing, with rents below 30% of median household income; Corevest surpassed $1.0 billion in financing to sponsors of Build for Rent projects.

33% of Board members are female; 78% of Board members are independent; formed a cross-functional ESG Management Advisory Committee to support ongoing ESG efforts; implemented Employee Ethics and Compliance Hotline Procedure; all employees receive mandatory annual training on Code of Ethics.

Potential losses from weather-related natural catastrophes; potential environmental risks related to properties; rising interest rates impacting homeownership access.

Required appropriate flood and disaster insurance for loans; conducted environmental due diligence and engaged third-party report services; maintained geographically diverse portfolio; robust origination and underwriting practices; expanded credit products to serve self-employed borrowers.

Frameworks Used: SASB

Certifications: Energy Star

Launched employee well-being program, including a wellness stipend for fitness and mental health services, paid family leave, fertility benefits, and paid time off; resulting in relatively low employee turnover at 10% for the year.

Workforce reductions to better align organizational structure with financial results, decreasing headcount by approximately 24% since July 1, 2022.
Market volatility and extreme credit spread widening negatively impacted profitability in both residential and business purpose mortgage banking segments.
Limited securitization and whole loan sale activity due to market conditions.

Expense management initiatives to reduce run-rate fixed compensation expenses.
Strengthened balance sheet by holding $259 million of unrestricted cash and generating additional cash through a preferred stock issuance and asset sales.
Adjusted underwriting guidelines, including lowering loan-to-value and loan-to-cost limits, increasing stabilized debt yield requirements, and further stressing the viability of take-out financing for sponsors.
Expanded whole loan buyer base and issued a bespoke private securitization to one investor.

Frameworks Used: SASB