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Nuveen, a TIAA Company

PRI reporting framework 2020

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - HF 01]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Direct - Listed Equity Incorporation
ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (A) Implementation: Screening [LEI 04 - 06] (B) Implementation: Thematic [LEI 07] (C) Implementation: Integration of ESG factors [LEI 08 - 10] ESG incorporation in passively managed listed equities [LEI 11] Outputs and outcomes [LEI 12 - 13]
Direct - Listed Equity Active Ownership
Overview [LEA 01] Engagement [LEA 02 - 08] Outputs and outcomes [LEA 09 - 11] (Proxy) voting and shareholder resolutions [LEA 12 - 21]
Direct - Fixed Income
ESG incorporation in actively managed fixed income [FI 01 - 12] Implementation processes [FI 01 - 03] (A) Implementation: Screening [FI 04 - 06] (B) Implementation: Thematic [FI 07 - 09] (C) Implementation: Integration [FI 10 - 12] ESG incorporation in passively managed fixed income [FI 13] Fixed income - Engagement [FI 14 - 16] Outputs and outcomes [FI 17 - 18]
Direct - Property
Overview [PR 01] Fundraising of property funds [PR 02 - 03] Pre-investment (selection) [PR 04 - 06] Post-investment (monitoring and active ownership) [PR 08 - 14] Overview [PR 08] Property monitoring and management [PR 09 - 10] Property developments and major renovations [PR 11] Occupier engagement [PR 12 - 13] Community engagement [PR 14] Outputs and outcomes [PR 15 - 16]
Direct - Inclusive Finance
Context [IFD 01 - 06] PIIF Principle 1: Range of services [IFD 07 - 10] PIIF Principle 2: Client protection [IFD 11 - 13] PIIF Principle 3: Fair treatment [IFD 14 - 17] PIIF Principle 4: Responsible investment [IFD 18 - 24] PIIF Principle 5: Transparency [IFD 25 - 27] PIIF Principle 6: Balanced returns [IFD 28 - 31] PIIF Principle 7: Standards [IFD 32 - 34]
Indirect - Inclusive Finance
Context [IFI 01] Selection [IFI 02] Contractual agreements and mandate design [IFI 03] Investment manager monitoring and reporting [IFI 04 - 05] Disclosure [IFI 06 - 07]
Confidence building measures
Confidence building measures [CM1 01 - 07]
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You are in Strategy and Governance » ESG issues in asset allocation

ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation carries out scenario analysis and/or modelling, and if it does, provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe See the response to Question 13.4 CC for more information.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

SG 13 CC.

13.4 CC. Describe how your organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, its results, and any future plans.

Describe

Nuveen has engaged with a vendor partner whom we are working closely with to develop scenario analysis processes across multiple asset classes utilizing their proprietary software capabilities. This software incorporates emissions scenarios known as Representative Concentration Pathways (RCPs) from the International Panel on Climate Change (IPCC). Four RCPs are included in the IPCC AR5: RCP8.5, RCP6, RCP4.5, and RCP2.6.

While our process for identifying financially material climate risks in the public markets is still under development, we are working to develop both a bottom up approach (at the individual investment level) which will be informed by scenario analysis, as well as a top down approach across all asset classes.

Describe

The maturity of our use of scenario analysis varies by asset class. Due to liquidity and holding periods, our real assets (farmland, timber, and infrastructure) and real estate assets may have more exposure to physical risks such as severe storms, floods, droughts and wildfires than public market investments, and therefore have a more systematic process in place for understanding the financial implications of climate risk on current and future assets. For example, in 2019, Nuveen Real Estate conducted an in-depth climate risk and financial loss analysis for 100 locations globally over the next 80 years which will be used to better understand the financial implications of physical risk to existing assets and regions for potential investment.

13.5 CC. Indicate who uses this analysis.

13.6 CC. Indicate whether your organisation has evaluated the potential impact of climate-related risks, beyond the investment time horizon, on its investment strategy.

Describe

Our climate scenario model goes out to 2090, however as previously stated, our investment time horizon can be longer and shorter than this depending on the parameters set by our clients.

We recognize that impacts from climate change may include significant risks to global financial assets and economic growth. As investors, our primary objective is to mitigate investment risks stemming from climate change. We recognize that long-term investment performance depends on other well-functioning systems, including natural systems that provide clean water, abundant food, and many other resources to the global economy. These systems are threatened by global climate change, which in turn threatens economic growth and investment performance. Therefore, our focus on mitigating climate risk is grounded in this orientation.

13.7 CC. Indicate whether a range of climate scenarios is used.

13.8 CC. Indicate the climate scenarios your organisation uses.

Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other
Other
Other

SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

other description (1) 

          We view investment risks and opportunities as material ESG factors that can be industry-and location specific

other description (2) 

          Changing global policy landscape, rise of responsible investment, shift of power from west to east

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

Within TIAA's General Account, the investment portfolio supporting our guaranteed fixed-annuity products, we use the Social Impact Investment Portfolio to direct capital to quality investment opportunities that also create measurable social outcomes across three investment themes that benefit low- to moderate-income communities globally: affordable housing, inclusive growth and resource efficiency. Within affordable housing, a portion of AUM is committed to Green Buildings.

Our proprietary impact framework, for identifying and classifying publicly traded fixed income securities, seek competitive risk-adjusted returns alongside direct and measurable environmental or social outcomes. The framework targets investment opportunities along four broad themes, two of which are climate related: Renewable Energy and Climate Change, and Natural Resources.

We offer 13 strategies across equity and fixed income that explicitly include low carbon criteria relating to companies' current and future carbon emissions.

Within Real Assets, we have investments in renewable power generation (solar, wind, biogas) and sustainably managed timberland and farmland.

Within Nuveen’s global real estate portfolio, we have voluntary sustainability building certifications (e.g. LEED, BREEAM, Energy Star, BOMA 360, DGNB, NABERS, HQE).

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

other description 

          View investment risks/opps as material ESG factors that can be industry/location specific. Real Estate investment committee assesses energy exposure to current/future impacts.

14.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

In 2018, we developed our Responsible Investing Data Platform (RIDP) - a big data technology platform which enables us to centralize, standardize and manage Nuveen’s RI intellectual property providing our organization with unique ESG data, functionality and insight. Examples of climate related data used within the platform includes MSCI’s carbon data. This data highlights emissions performance as a risk indicator for industries where we view emissions as a material issue.

Beyond our RIDP, TIAA’s General Account utilizes data and tools on emissions risks from Bloomberg and CDP as well COIN.

For scenario analysis, our vendor’s software quantifies climate risk, including both transition risk and physical risk, in financial terms that are aligned with the Task Force for Climate-related Financial Disclosure (TCFD). 

Nuveen’s real asset investments utilize Verisk Maplecroft Climate Change and Environmental Risk Dataset and uses it to screen locations for future climate change risk.

Nuveen Real Estate utilizes NREV sustainability reporting recommendations and GHG protocol standards, and GRI.

14.5. Additional information [Optional]

Prior to moving forward with our current scenario analysis vendor, we evaluated multiple industry leading competitors. Criteria we looked at included: assets covered, issuers and securities covered, coverage of transition and physical risk, climate scenarios used, climate risk measurement output (risk score, value at risk), and overall process.

Through our evaluation process we found the concept of tying public companies or other entities to a wide variety of physical locations is relatively nascent and requires a lot of bottoms up development work on our part to build that out.

SG 14 CC.

14.6 CC. Provide further details on the key metric(s) used to assess climate-related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Climate-related targets
Carbon footprint (scope 1 and 2) 
          For all real estate equity investments - To identify areas of risk and to provide transparency to investors
        
          Tonnes CO2
        
          Energy consumption is monitored and reported by property managers – this is then converted into carbon emissions using publicly available emissions conversion factors
Portfolio carbon footprint 
          For select pilot real estate portfolios an exercise to incorporate scope 3 emissions and therefore provide portfolio carbon footprint has been undertaken to give a more complete picture of transition risk than would be possible by looking at scope 1 and 2 emissions only
        
          Tonnes CO2
        
          Data on energy procured directly by tenants was gathered or estimated and then converted to carbon emissions  using publicly available emissions conversion factors
Total carbon emissions
Carbon intensity 
          For all real estate equity investments – we normalise carbon emissions by floor area to give greater insight into the level of transition risk across assets.
        
          kgCO2/m2
        
          Carbon emissions total per asset is divided by floor area

14.7 CC. Describe in further detail the key targets.

Target type
Baseline year
Target year
Description
Attachments 
          2015
        
          2030
        
          Reduce the energy intensity of Nuveen Real Estate’s entire global equity portfolio by 30% by the year 2030, based on a 2015 baseline
        

          2020
        
          2050
        
          All buildings to be net zero carbon

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risk management processes used for identifying, assessing and managing climate-related risks.

Please describe

With respect to its investment portfolio, Nuveen’s investment discipline and risk management are executed at the asset class and strategy level by specialized teams, while overall portfolio exposures to the underlying asset classes are managed in a top-down manner through the enterprise risk management framework. Nuveen is now working to formally embed climate risk in the enterprise risk management framework through the work of the Climate Risk Task Force (CRTF). The CRTF is co-owned by TIAA’s Chief Risk Officer and Nuveen’s Global Head of Responsible Investing to oversee this process.

Individual investment teams identify and manage risks that apply to the specific assets that they oversee. For example, our private direct equity investments in real estate, 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. 

14.9 CC. Indicate whether your organisation, and/or external investment manager or service providers acting on your behalf, undertake active ownership activities to encourage TCFD adoption.

Please describe

Our Responsible Investment Team monitors public company’s governance practices to help protect against downside investment risk related to corporate ESG practices.  The Responsible Investing team engages with boards and executives of our public equities and fixed income portfolios to advocate for effective oversight and risk management approaches. In particular, we deploy engagement and proxy voting strategies that encourage companies and their boards to exercise diligence in their (a) assessment of climate risk, (b) analysis of related strategic and economic implications and (c) disclosure of climate policies and progress on related performance indicators. 

During our conversations with portfolio companies on ESG issues, we will often advise them to consider reporting using global ESG reporting frameworks that we believe will help us in our mission to integrate ESG into the investment process. Examples include TCFD, CDP and GRI.

SG 15. Allocation of assets to environmental and social themed areas

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

3.9 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

0.013725891 Percentage of AUM (+/-5%) per asset class invested in the area
0.001020957437 Percentage of AUM (+/-5%) per asset class invested in the area
0.006957216 Percentage of AUM (+/-5%) per asset class invested in the area
0.016280641 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within Fixed Income, we have securities issued by federal, state or local government entities or corporations, which seek to: conserve natural resources including energy, reduce emissions, waste and pollution.

Asset class invested

0.084128589 Percentage of AUM (+/-5%) per asset class invested in the area
0.011029734 Percentage of AUM (+/-5%) per asset class invested in the area
0.075155853 Percentage of AUM (+/-5%) per asset class invested in the area
0.011595361 Percentage of AUM (+/-5%) per asset class invested in the area
0.207396709 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within Real Assets, we have investments in renewable power generation (solar, wind, biogas). 

Within fixed income, we invest in securities issued by federal, state or local government entities or corporations which seek to finance projects that increase the share of renewable energy in the global energy mix, increase energy efficiency and reduce greenhouse emissions.

 

Asset class invested

.00414322 Percentage of AUM (+/-5%) per asset class invested in the area
0.011218276 Percentage of AUM (+/-5%) per asset class invested in the area
0.049539532 Percentage of AUM (+/-5%) per asset class invested in the area
2.139956955 Percentage of AUM (+/-5%) per asset class invested in the area
0.001403698 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within Nuveen’s global real estate portfolio, we have voluntary sustainability building certifications (e.g. LEED, BREEAM, Energy Star, BOMA 360, DGNB, NABERS, HQE).

Within Fixed Income, we invest in securities issued by federal, or state or local government entities or corporations that support sustainable building projects.

Within TIAA's General Account, the investment portfolio supporting our guaranteed fixed-annuity products, we use the Social Impact Investment Portfolio to direct capital to quality investment opportunities that also create measurable social outcomes across three investment themes that benefit low- to moderate-income communities globally: inclusive growth, affordable housing, resource efficiency.

Asset class invested

0.007287166 Percentage of AUM (+/-5%) per asset class invested in the area
0.014074694 Percentage of AUM (+/-5%) per asset class invested in the area
0.179115339 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within Real Assets, we have investments in sustainably managed timberland. 

Within Fixed Income, we invest in securities issued by federal, state or local government entities or corporations which finance sustainable forestry or land preservation/ conservation.

Asset class invested

0.002545323 Percentage of AUM (+/-5%) per asset class invested in the area
0.005128354 Percentage of AUM (+/-5%) per asset class invested in the area
0.773024098 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within Real Assets, we have investments in sustainably managed farmland. 

Within Fixed Income, we invest is securities issued by federal, state or local government entities or corporations which finance sustainable agriculture practices, including sustainable marine practices.  

 

Asset class invested

0.015583034 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within TIAA's General Account, the investment portfolio supporting our guaranteed fixed-annuity products, we use the Social Impact Investment Portfolio to direct capital to quality investment opportunities that also create measurable social outcomes across three investment themes that benefit low- to moderate-income communities globally: inclusive growth, affordable housing, resource efficiency.

Asset class invested

0.017930388 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within TIAA's General Account, the investment portfolio supporting our guaranteed fixed-annuity products, we use the Social Impact Investment Portfolio to direct capital to quality investment opportunities that also create measurable social outcomes across three investment themes that benefit low- to moderate-income communities globally: inclusive growth, affordable housing, resource efficiency. 

Asset class invested

0.027338657 Percentage of AUM (+/-5%) per asset class invested in the area
0.0000000754 Percentage of AUM (+/-5%) per asset class invested in the area
0.06787528 Percentage of AUM (+/-5%) per asset class invested in the area
0.006316172 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within the Social Choice Bond Proprietary Impact Framework, we invest in securities issued by supranational, federal, state or local government entities or corporations to support community economic development projects, humanitarian, disaster, and international aid services inclusive of underserved and/or economically disadvantaged communities.

Within TIAA's General Account, the investment portfolio supporting our guaranteed fixed-annuity products, we use the Social Impact Investment Portfolio to direct capital to quality investment opportunities that also create measurable social outcomes across three investment themes that benefit low- to moderate-income communities globally: inclusive growth, affordable housing, resource efficiency.

Asset class invested

0.019891229 Percentage of AUM (+/-5%) per asset class invested in the area
0.003148659 Percentage of AUM (+/-5%) per asset class invested in the area
0.011633069 Percentage of AUM (+/-5%) per asset class invested in the area
0.041242721 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within the Social Choice Bond Proprietary Impact Framework, we invest in securities issued by supranational, federal, state or local government or corporate entities to support increasing the availability of affordable housing, reducing the rent burden, increasing home ownership, with a focus on low and moderate income households and increasing access housing near to transit oriented hubs. 

Within TIAA's General Account, the investment portfolio supporting our guaranteed fixed-annuity products, we use the Social Impact Investment Portfolio to direct capital to quality investment opportunities that also create measurable social outcomes across three investment themes that benefit low- to moderate-income communities globally: inclusive growth, affordable housing, resource efficiency.

Asset class invested

0.002073967 Percentage of AUM (+/-5%) per asset class invested in the area
0.001216098 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within the Social Choice Bond Proprietary Impact Framework, we invest in securities issued by supranational, federal, state or local government or corporate entities to increase availability of education services for underserved populations, including access to vocational training.

Within TIAA's General Account, the investment portfolio supporting our guaranteed fixed-annuity products, we use the Social Impact Investment Portfolio to direct capital to quality investment opportunities that also create measurable social outcomes across three investment themes that benefit low- to moderate-income communities globally: inclusive growth, affordable housing, resource efficiency.

Within the inclusive growth theme, our Social Impact Investment Portfolio invests in strategies that provides financial services, healthcare and education to reduce poverty among underserved populations, particularly in emerging markets. By providing higher-quality services at lower cost, these investments help the poor contribute to and benefit from broader economic growth.

Asset class invested

0.005486585 Percentage of AUM (+/-5%) per asset class invested in the area
0.001385787 Percentage of AUM (+/-5%) per asset class invested in the area
0.004807832 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Within the Social Choice Bond Proprietary Impact Framework, we invest in securities issued by supranational, federal, state or local government or corporate entities to increase availability of healthcare and medical services. 

Within the inclusive growth theme, our Social Impact Investment Portfolio invests in strategies that provides financial services, healthcare and education to reduce poverty among underserved populations, particularly in emerging markets. By providing higher-quality services at lower cost, these investments help the poor contribute to and benefit from broader economic growth.

Asset class invested

0.046287174 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Securities issued by federal, or state or local government entities or corporations support development of water infrastructure that improves   clean drinking water supplies and/or sewer systems, and protects local water sources.

Investments include Fixed Income SSA, Fixed Income Corporate Financial, and Fixed Income. 

 
          Low Carbon

Asset class invested

0.090641789 Percentage of AUM (+/-5%) per asset class invested in the area
0.012434375 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

We offer 13 strategies that explicitly include low carbon criteria relating to companies' current and future carbon emissions

15.4. Please attach any supporting information you wish to include. [OPTIONAL]


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