On October 19, 2022, nearly 300 TIAA account holders filed a complaint against the financial services giant and its wholly-owned subsidiary Nuveen at the United Nations-sponsored Principles for Responsible Investment (PRI). The complaint alleges that TIAA’s substantial investments in fossil fuels and deforestation violate the company’s climate pledges and commitment to the PRI Principles and therefore constitute a serious violation of the integrity of the PRI initiative. It was drafted with the assistance of TIAA-Divest! and the Center for International Environmental Law (CIEL).

What is the complaint about?

The complaint calls on the PRI to investigate the significant gaps between TIAA/Nuveen’s commitments to Environmental, Social, and Governance (ESG) principles as a PRI signatory and TIAA/Nuveen’s actual climate-destructive investment practices. The complaint requests that the PRI Board investigate and address both TIAA/Nuveen’s irresponsible investments and systematic greenwashing practices or delist TIAA/Nuveen as a PRI signatory.

Extensive research revealed that TIAA is the fourth largest holder of coal industry bonds in the world — 17.2% of its $136.5 billion General Account corporate bond portfolio is invested in fossil fuel and utility companies, and at least $78 billion of fossil fuel risks exist within TIAA’s $1.2 trillion portfolio. The complaint also takes issue with TIAA’s 3 million acres of landholdings worldwide, including 1 million acres in the Brazilian Cerrado, which is experiencing unprecedented deforestation. While TIAA pledged last year to achieve an emissions reduction target of net zero by 2050 for its General Account, that is only one part (about 25% according to this analyst) of TIAA’s total assets under management, and there is no indication that TIAA/Nuveen is on track to achieve that goal.

The complaint argues that TIAA/Nuveen violated the six PRI Principles by showing failure to:

1. “Incorporate ESG issues into investment analysis and decision-making processes.”
2. “Incorporate ESG issues into [TIAA/Nuveen’s] ownership policies and practice.”
3. “Seek appropriate disclosure on ESG issues by the entities in which [TIAA] invests,” including supporting shareholder initiatives and resolutions which promote ESG disclosure.
4. Promote acceptance and implementation of the Principles within the investment industry,” most notably by supporting regulatory or policy developments that enable implementation of the Principles.
5. “Work together to enhance our effectiveness in implementing the Principles.”
6. “Report on [TIAA’s] activities and progress towards implementing the Principles.”

Who are the complainants?

The complaint against TIAA/Nuveen is being brought by nearly 300 TIAA participants from 87 different institutions. The list of complainants includes educators, researchers, authors, and staff from every region of the US, including folks like Bill McKibben, Bob Howarth, Judith Butler, Robin D. G. Kelley, Yael Niv, and Melissa Lane.

What are the demands of the complainants?

The complainants are making ten demands of TIAA/Nuveen.

1. Measure and disclose TIAA’s portfolio-wide emissions, including Scope 3 emissions of its portfolio companies.
2. Be fully transparent with respect to the methodology used to calculate financed emissions and any gaps in climate-related data.
3. Set and disclose short and medium-term targets that would align TIAA/Nuveen’s entire portfolio with a 1.5°C pathway.
4. Report on concrete impacts resulting from its engagement with portfolio companies and its progress in reducing portfolio-wide emissions.
5. Work with a panel of independent scientific and human rights experts and community stakeholders to assess and report transparently on TIAA’s climate and social impacts.
6. Develop clear policies on company exclusions and divestment consistent with the fiduciary duties outlined in this complaint. Such policies should entail the following:
   • Divesting from all current fossil fuel investments and activities, in line with a 1.5°C pathway and no later than 2025; and
   • Divesting from all companies engaged in deforestation, land grabs that are harmful to Indigenous communities and small farmers, and those that facilitate environmentally destructive industrial agriculture.
7. Enact an immediate moratorium on all new direct investments in fossil fuels and all other highly-emitting assets, as well as all new investments in farmland, timberland, and industrial agriculture production.
8. Restore lands to communities in cases where they had earlier been grabbed from legitimate rights holders or grabbed from the public lands before being sold to TIAA or purchased in violation of national laws.
9. End false and misleading advertising regarding its climate-related activities.
10. Link TIAA/Nuveen’s executive compensation with meaningful climate action.

If TIAA/Nuveen is unable to come into compliance, the complainants are asking PRI to expel Nuveen from the PRI initiative.

What is the Principles for Responsible Investment?

The Principles for Responsible Investment (PRI) is a UN-sponsored group of the world’s largest institutional investors, including TIAA/Nuveen. PRI works on both understanding the investment implications of ESG factors and supporting its signatories in incorporating these factors into their investment and ownership decisions. There are more than 3,500 signatories from more than 50 nations. Its six Principles for Responsible Investment outline possible actions by which investors themselves can incorporate ESG into their practices. Although the group has been around since 2006, its accountability mechanism is relatively new and has only been around since 2020.

Why is it necessary to bring forward a complaint about TIAA/Nuveen?

TIAA/Nuveen, like a large number of financial institutions, carefully constructs a public image around their commitment to ESG values and their concern around climate change when in reality, they fail to fulfill the most basic commitments and lag far behind their peers on progress toward an investment strategy that aligns with IPCC recommendations. TIAA remains invested in fossil fuels and companies causing massive deforestation and has set no interim climate goals before 2050. TIAA does not fulfill its obligation to submit reports, measures only Scope 1 and 2 emissions for only a small sector of its assets, and consistently votes against policies requiring transparency on these issues. TIAA/Nuveen lags far behind peer institutions that have clear commitments for emission reductions by 2025, 2030, etc., which publish emissions benchmarks and report on progress. This complaint is an effort to hold TIAA accountable for the chasm between its professed values and the destructive impact of its investments.

Whose retirement investments are affected by TIAA/Nuveen’s investments?

TIAA (Teacher’s Investment Insurance and Annuity Association of America) is a Fortune 100 financial services organization with over 5 million active and retired employees participating at more than 15,000 institutions. It has over $1.2 trillion in combined assets with major financial holdings in Brazil, Australia, and Eastern Europe. TIAA is the largest provider of retirement services for workers at academic, research, medical, cultural, and non-profit institutions. Nuveen is a wholly-owned subsidiary of TIAA and manages 100% of TIAA’s assets.

What will filing a complaint at PRI accomplish?

Filing a complaint will increase scrutiny of TIAA’s failure to fulfill its commitments to ESG principles, particularly with respect to addressing the climate crisis, and highlight that TIAA/Nuveen actively misleads the public and participants by promoting itself as an investment institution whose core value is its commitment to these principles and climate action. The complaint seeks to bring TIAA’s investment practices in alignment with the Paris Agreement objectives and a 1.5ºC pathway and ensure individuals’ hard-earned savings are not being used to exacerbate climate change.

The complaint, by implication, will put all financial institutions on notice that stakeholders like retirement account holders will not accept the institution’s green claims at face value. TIAA participants have allied themselves with financial and legal experts who have examined the data behind the claims. Complainants are clear — they do not want to and passively allow TIAA to use their retirement savings to contribute to the climate crisis recklessly. In pointing to data and successful examples of divestment from fossil fuels, they show that it is possible to achieve divestment with no loss of financial value. Moreover, divestment is consistent with an institution’s fiduciary responsibilities. Account holders have the right to reject the undue financial risk of investment in fossil fuels and to direct their savings to be invested in a world they want to live in, a future they believe in.

Are there other examples of complaints at PRI?

In 2021, the Australian community of South Baralaba completely opposed the building of a coal mine because of the expected, resulting pollution and potential flooding, became the Save the Dawson project, and filed a complaint with the PRI about Liberty Mutual’s commitment to insure the coal investment. This caused Liberty Mutual to withdraw from the financing. In April 2021, the South Baralaba Coal mine was pronounced dead. The review and the outcome received significant international media attention.

What is TIAA-Divest!?

TIAA-Divest! is a national campaign of TIAA participants and supporters to push TIAA to divest from investments that are accelerating the climate crisis. The American Federation of Teachers (AFT), the Union of University Professors, and more than 16 educational institutions have passed Resolutions calling on TIAA to divest from fossil fuels. Divestment has proven a powerful strategy, with more than $40 trillion in assets under management divested from fossil fuels from a wide array of institutions.