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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 » Implementation processes

Implementation processes

FI 01. Incorporation strategies applied

01.1. Indicate 1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and 2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.

SSA
0 Screening alone
0 Thematic alone
0 Integration alone
95 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
5 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
0 Screening alone
0 Thematic alone
0 Integration alone
94 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
6 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
0 Integration alone
97 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
3 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
0 Screening alone
0 Thematic alone
0 Integration alone
98 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
2 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

At TIAA Investments, we believe that the integration of environmental, social and governance criteria in our investment process can help identify and mitigate credit risk across the diverse spectrum of fixed income issuers. By broadening the scope of our due diligence, financial modeling, and engagement, we can better capture a wider range of material information in our investment decisions.

Our ESG-focused fixed income funds meet specific client demand for investing in a way that explicitly accounts for ESG criteria within the investment process. These funds also include a thematic portion that follows proprietary ESG guidelines. All thematic investments seek clear and measurable social and environmental outcomes alongside competitive risk-adjusted returns.

Screening strategies are applied to meet specific goals at the firm level and for individual clients. At the firm level, we use negative screening to prevent investment in markets that are subject to legal state and federal sanctions, as well as for specific companies identified with material operations in Sudan. At the request of specific clients, we may also implement negative screening strategies in Separately Managed Accounts (SMAs).

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

03.2. Describe how your ESG information or analysis is shared among your investment team.

          Material ESG information is communicated between Research and Portfolio Management, and may be documented in earning notes or initial credit reviews.
        

03.3. Additional information. [Optional]

TIAA Investments' ESG integration strategy in public fixed income includes increasing access to ESG research and data, educating research analysts and portfolio managers through external speakers, events, and webinars, and gathering information about ESG integration progress through an investment team survey.

Our strategy further expanded in 2017 to emphasize capturing internal views on issuer ESG performance.  In support of this goal, future efforts will include in-depth internal ESG training and dedication of additional investment team resources.

For private fixed income investments, individual investment teams identify and manage risks that apply to the specific assets that they oversee. For example, our private direct equity investments in agriculture, timberland, energy and infrastructure are subject to policies that mandate pre-deal due diligence activities, selection of appropriate partners and agents, use of operating risk scorecards and ongoing monitoring activities that seek to measure and mitigate risks (including environmental) at the asset level.

For the thematic portion of our ESG-focused funds, ESG information is captured in a quarterly reporting process detailing how each investment aligns with one of four themes. These reports are used in a periodic review with the investment team, which covers the eligibility of individual investments and recommendations for process improvement.


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