Federal Housing Head Touts ESG: Agency is ‘One of the Biggest, Most Successful Social-Impact Enterprises’

A home is being constructed at a housing development in Lemont, Ill., on June 21, 2023. Scott Olson/Getty Images

The head of Ginnie Mae, a federal corporation that helps people get home mortgages, touted her organization’s commitment to Environmental, Social, and Corporate Governance (ESG).

Appearing at the Bipartisan Policy Center in Washington on Aug. 8, Alanna McCargo, stated that ESG should not be a hot-button issue.

“As I travel the world and talk to investors, they are demanding more information,” she said. “And they have mandates from their governments or from their boards or whatever it may be to do more work that is socially conscious, sustainable, supporting climate and all the different environmental factors.

“And so they’re looking at us, saying, ‘We do big investing in you. Can you tell us what is in these securities?’”

Ms. McCargo went on to say it was incumbent upon Ginnie Mae, which is under the Department of Housing and Urban Development, to provide data about what was behind their loans. She called this a “game changer.”

Ms. McCargo lauded Ginnie Mae as “probably one of the biggest, most successful social-impact enterprises” even though the organization has “never talked about” itself that way “because if you think about who we’re serving through this platform, when you start to look at that and break it down, it’s pretty incredible, and you can tell a really good story.”

ESG has come under fire for what critics say is an imposition of a left-wing agenda by corporations and other entities.

“It’s an investment strategy that’s catching on fast—roughly one-third of professionally managed assets in the United States now adhere to ESG criteria,” wrote Sarah Coffey of the right-wing Foundation for Government Accountability. “ESG is, essentially, politically motivated investing, directing investor dollars not toward success for the individual’s portfolio, but in pursuit of ‘woke’ policy goals like climate change.”

Ms. McCargo remarked that “there’s a really big connection between ESG and [the Community Reinvestment Act]. And I think a lot of good can be done in the secondary markets participation around both of those initiatives. The Community Reinvestment Act, or CRA, was a law from the 1970s that pushes the Federal Reserve and other U.S. financial institutions to service low- and moderate-income borrowers.

As part of Ginnie Mae’s ESG agenda, Ms. McCargo said they “are doing green bonds” and that they “won a climate bond award for the most asset-backed issuance in green last year.” She added that Ginnie Mae is inherently a social bond by identifying the communities they serve, and inform investors of this.

ESG, said Ms. McCargo, is “a win-win” for Ginnie Mae. The ESG aspect of Ginnie Mae, she said, is “not a new construct, not a new program. It’s truly just supporting investors to do more to put money into the U.S. housing finance system so we can lend to more people.”