TIAA, the huge nonprofit financial services organization founded 100 years ago, outlined its efforts to maximize its positive impact on society in a new report.
“Throughout our first 100 years, TIAA has made a positive impact in many ways — from volunteering in our local schools to pursuing responsible investing around the globe,” Roger Ferguson Jr., president and CEO of TIAA, said in a statement. “As we enter our second century of operation, we remain guided by the values that have brought us this far and committed to improving the lives of our customers and stakeholders through responsible business practices.”
TIAA’s second annual corporate social responsibility report details how the firm has put its values into action in recent years through responsible investing policies and programs.
TIAA — along with its investment management arm, Nuveen, which it acquired four years ago — has had a long-term commitment to applying its proprietary responsible investing framework across its $973 billion in assets under management.
According to the report, more than $650 billion of TIAA’s total firm assets adhere to the United Nations’ Principles for Responsible Investment (UNPRI). In addition, Nuveen manages more than $20 billion in environmental, social and governance (ESG) strategies for institutional investors, advisors, and individuals in public markets.
The report focuses on TIAA and Nuveen’s impact in four key areas: governance, diversity and inclusion, community and sustainability.
Nuveen’s Responsible Investing team supported 100% of shareholder proposals requesting disclosure of a company’s climate risk and plans to manage its carbon footprint in 2018, according to the report.
The Responsible Investing team’s approach to engagement encompasses both long-term engagement with companies and industry groups on priority themes (for example, board effectiveness, shareholder rights, climate change, human capital management and human rights) and more time-sensitive tactical engagements with specific companies.
Nuveen’s Responsible Investing team voted approximately 13,900 times during the 2018 Securities and Exchange Commission proxy voting year.
According to the report, Nuveen often is more supportive of shareholder proposals relative to its peers on issues such as climate risk, sustainability and diversity.
Diversity and Inclusion
Nuveen also reinforces the value of inclusion through its shareholder voting and engagement activities.
Nuveen’s consistent diversity and inclusion advocacy with companies and boards through its engagement work is centered around the following key areas: disclosure, board composition, workforce diversity, workplace policy and talent pipeline.
Since 2015, Nuveen has discussed diversity and inclusion approaches and disclosure with more than two-thirds of the public companies with which it engaged. Nuveen has also offered annual enrichment programming for women on public company boards since 2015 to equip them with insight on ESG priorities that are important to long-term shareholders.
In addition, in 2016, 2017 and 2018, Nuveen voted in favor of the majority of shareholder proposals requesting that public companies review and address diversity-related pay gaps among employees.
Currently, the firm is engaging with boards in the U.S. and Japan who have no female directors, encouraging them to consider adding women to their nominee pool and/or commit to appointing at least one female director to their board.
Nuveen’s community investment initiatives address gaps in essential support services for low-income and underserved populations globally.
For example, the TIAA General Account’s $1.1 billion social impact portfolio deployed $182 million in new capital commitments in 2017, including affordable housing, inclusive finance, and community and economic development.
(Related: Social Responsibility Is No Longer a ‘Niche’)
The portfolio’s $70 million affordable housing commitment includes a $50 million private equity investment to purchase 35 properties with 3,500 rental units in Maryland, Pennsylvania, and Virginia. This project provides high-quality, attractive, and affordable housing with social programs for low- and moderate-income families and the elderly.
The inclusive finance commitment includes $22 million for investments in companies that provide banking and other financial services for low- and moderate-income families and the underserved.
To help further community and economic development, the social impact portfolio has $40 million invested in providers of affordable options for health care, education, and other basic services, as well as $50 million invested in a green building technology company to reduce energy consumption and environmental impact.
Sustainability goals are incorporated in Nuveen’s selection of real asset investments — farmland, timberland, and commercial real estate — and other investments such as fixed income that incorporate ESG criteria.
Real assets must pass strict due diligence showing the ability to support sustainable operations.
“Before acquiring farmland, we assess environmental risks, including pesticide storage, harvesting practices, water use efficiency, and presence of endangered species,” the report states. “For farmland and timberland investments, our investment teams, including technical experts, conduct site inspections to evaluate environmental risks.”
Nuveen relies partly on third-party certifications to verify that farmers use sustainable agriculture practices on our farmland properties. For example, more than 3,500 acres of Nuveen’s almond cropland in the U.S. have achieved USDA Good Agricultural Practices certification and almost 9,000 acres of wine grapes have earned Certified Sustainable or Sustainability In Practice certifications.
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