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TIAA - CREF

PRI reporting framework 2018

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (A) Implementation: Screening

(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

04.2. Describe your approach to screening for internally managed active fixed income

All TIAA Investments holdings are subject to state and federal restrictions on holding securities issued by certain sovereigns or companies with ties to these sovereigns, such as Iran. We also restrict investment in both equity and debt securities issued by four companies with ties to Sudan due to concerns about potential involvement in human rights abuses.

TIAA Investments' ESG-focused funds are subject to certain positive/best-in-class and norms-based environmental, social and governance ("ESG") criteria for corporate and sovereign issuers.

For corporate issuers, the ESG evaluation process is conducted on an industry-specific basis and involves the identification of key performance indicators. The evaluation process favors companies with leadership in ESG performance relative to their peers. Typically, environmental assessment categories include climate change, natural resource use, waste management and environmental opportunities. Social evaluation categories include human capital, product safety and social opportunities. Governance assessment categories include corporate governance, business ethics.

Sovereign issuers must meet certain ESG criteria to be considered for inclusion in our ESG-focused funds. ESG assessments are based on risk management practices and ESG performance across several areas: natural resources, environmental externalities and vulnerability, human capital, economic environment, financial governance, and political governance.

04.3. Additional information. [Optional]

The Responsible Investing team manages the development, enhancement, and oversight processes for the ESG criteria used to establish the investment universes for TIAA Investments' ESG-focused funds. The team coordinates annually a comprehensive review of the firm's approach for implementing the Fund's ESG criteria and its primary ESG research partner, for approval by the Fund's Independent Board of Trustees.


FI 05. Negative screening - overview and rationale

05.1. Indicate why you conduct negative screening.

SSA

SSA

Corporate (financial)

Corporate (fin)

Corporate (non-financial)

Corporate (non-fin)

Securitised

Securitised

05.2. Describe your approach to ESG-based negative screening of issuers from your investable universe.

All TIAA Investments holdings are subject to negative/exclusionary screening based on state and federal restrictions on holding securities issued by certain sovereigns or companies with ties to these sovereigns, such as Iran. We also restrict investment in both equity and debt securities issued by four companies with ties to Sudan due to concerns about potential involvement in human rights abuses.

For clients who meet our minimum capital thresholds, TIAA Investments is also able to work with SMA (separately managed account) clients to implement custom solutions that incorporate ESG.

According to client preference, SMAs may be negatively screened for controversial business involvement, such as conventional and nuclear weapons, gambling, tobacco, and alcohol.

05.3. Additional information. [Optional]


FI 06. Examples of ESG factors in screening process (Private)


FI 07. Screening - ensuring criteria are met

07.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening?
Positive/best-in-class screening

other description

          Automated IT systems generate warnings for our portfolio managers if they attempt to invest in securities whose issuers do not meet the positive screening criteria.
        
Norms-based screening

other description

          Automated IT systems generate warnings for our portfolio managers if they attempt to invest in securities whose issuers do not meet the positive screening criteria.
        

07.2. Additional information. [Optional]

Explicit restrictions in the trading system prevent the execution of corporate and sovereign issuers on the state and federal restricted list.

Multiple checks also prevent the trading of securities from corporate and sovereign issuers that do not meet minimum ESG criteria for potential inclusion in our ESG-focused fund family or in our fixed income SMAs. However, an ineligible security could be held in the case where (1) an issuer previously held in the funds no longer met the minimum ESG criteria necessary for these portfolios or, in the case of corporate issuers, (2) a corporate action. In both cases, the portfolio manager will put the security up for sale. The trading desk will sell this security in an orderly fashion, to minimize market impact.


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