On Monday, Nuveen, the $1 trillion asset manager of TIAA, announced that it is joining investor-led climate activist group Climate Action 100+, and rolling out a new portfolio climate risk management program in all of the asset classes in which it is invested.
Climate Action 100+, a five-year group initiative whose membership spans more than 450 investors with over $40 trillion in assets under management, engages with the world’s largest corporate greenhouse gas emitters.
The goal is to get these companies to take action toward meeting climate change mitigation targets under the Paris Agreement. Companies on the Climate Action 100+ engagement list include 100 “systemically important emitters,” accounting for two-thirds of annual global industrial emissions.
“These initiatives are just the latest evidence of our ongoing commitment to helping investors manage climate change’s impacts, both emerging and long-term, a commitment we are fulfilling every day through our firm’s Responsible Investing platform,” said Nuveen CEO Jose Minaya.
Portfolio effects
“Long-term investment performance depends, among other factors, on natural systems that provide clean water, abundant food, and many other global resources – systems that are threatened by worldwide climate change,” said Amy O’Brien, Global Head of Responsible Investing at Nuveen.
“The wildfires now raging through the western United States are only the latest, dramatic example of extreme events rooted in climate change that can both devastate communities and pose systemic risk across a broad spectrum of assets,” she said. “More and more, climate change will have a meaningful influence on economic growth; portfolios also are likely to be affected by the emerging public policy responses to climate change, focused on supporting the transition to a low-carbon economy. Understanding climate change risk in all of its forms is essential to mitigating its impact.”
Nuveen’s portfolio risk program, which will be implemented by more than 500 of its investment professionals across asset classes, is aligned with the UN-supported Principles for Responsible Investment’s Inevitable Policy Response initiative. This initiative is designed to prepare investors for near-term policy response to climate change. Nuveen’s program will focus on how and where climate change may impact investment portfolios, aiming to improve long-term investment outcomes for clients.
ESG factors in 100 percent of assets by year end
Nuveen is already incorporating environmental, social and governance (ESG) factors into its investment processes across the entire firm. By the end of 2020, this effort will cover 100 percent of assets, complementing the firm’s $29 billion in dedicated ESG and impact investment strategies currently under management.
“While Nuveen will continue to offer a diverse range of investment strategies that allow clients to align their investments to renewable and energy efficient projects, this initiative underscores our belief that climate risk is relevant to all of our clients’ investments to build portfolio with purpose while improving returns over the long term,” Mr. Minaya said.
Nuveen’s support for Climate Action 100+ builds on a track record of engagement and proxy voting on climate-related issues, having been ranked #1 by Share Action among U.S. asset managers in 2019.
Nuveen is also a long-time collaborator with and supporter of Ceres, a nonprofit sustainability organization that is one of founders of Climate Action 100+.
