For most middle-class Latin Americans, buying a home is the biggest financial investment they will make in their lives. It represents their most valuable asset, one they expect will grow in value over the years. But how can they ensure that their property will appreciate?
A good bet is to invest in a sustainable house. That has been the case, at least, for buyers of homes developed by Mexico’s Vinte, a company that has benefitted from the long-term support of IDB Invest, the IDB Group’s private-sector arm. They put the annual growth rate of their homes at 9.3%.
Since its founding in 2001, Vinte has distinguished itself by building housing complexes for different socioeconomic groups —from lower-middle-class through upper-middle-class households— with high social and environmental standards.
In 2010, the company launched a pilot to study the feasibility of creating affordable housing with a low carbon footprint. A bioclimatic design features efficient spatial orientation of homes, solar panels and thermodynamic elements such as ecological windows with polarized films. Electricity, gas and water are monitored in real time through telemetry systems, and structural elements efficiently absorb radiation. The result: households reduced electricity consumption by 77% and greenhouse gas emissions by 2.4 tons per year. In fact, these “Zero Energy” homes produce almost as much renewable energy as the amount of energy they consume through public utilities.
According to the U.S. government’s Oak Ridge National Laboratory, the average CO2 emitted per person worldwide amounts to 4.9 metric tons. While the figure in Mexico is 4 tons, there is much progress still to be made. Acquiring a Zero Energy home could be part of the solution, as each unit could mean a reduction of about 13% in the inhabitant’s CO2 contribution. That’s akin to staying off the road for 2,142 kilometers.
“For us, the amenities that seem to be luxuries are necessities to be happy,” says Domingo Valdés, Vinte’s CFO. “We have a business model where what we are looking for is that everyone wins.”
In 2018, the company issued the first three sustainable bonds in Latin America in order to finance the construction of new homes based on the pilot. Sustainable bonds are fixed-income financial instruments used to fund companies or projects that actively contribute to the fight against climate change and create a positive social impact. The environmental and social impact of the investment must also be evaluated by a third party.
The Vinte bonds were issued for 1,500 million Mexican pesos, or approximately $77 million at the current exchange rate. Netherlands-based firm Sustainalytics will analyze the results over the seven-year duration of the bonds and report back to the investors on its impact.
“From the first time I got to know Vinte, I realized that it is a company we want to do business with,” says Rodrigo Navas, head of the Manufacturing Unit at IDB Invest. “Their approach and values in combating climate change, their corporate governance and their social and environmental responsibility are completely aligned with what we want.”
IDB Invest's relationship with Vinte began in 2012. Six loan operations with the company have followed.
"We have accompanied them since they were something small until they became a public company that is listed on the Mexican stock exchange," says Navas.
The most recent operation was as a partial guarantee in the issuance of the green bond, for up to 250 million pesos. The collaboration between IDB Invest and Vinte has directly contributed to the construction of 5,000 houses, according to Vinte CFO Valdés.
“For a middle-class person, the greatest wealth generator is their home,” says Navas. “What Vinte has proven is that doing business in a sustainable way is very good business – even more profitable than those who don’t operate that way.”