Since the Annual Meeting of participants in the College Retirement Equities Fund (CREF) last July, TIAA-CREF has continued to promote social responsibility and sound governing practices at companies in which it invests.
TIAA-CREF issued the following statement after a meeting today with members of social investing groups:
"TIAA-CREF believes that responsible corporate behavior and sound governing practices contribute to the performance of portfolio companies," said Hye-Won Choi, Senior Vice President and Head of Corporate Governance, TIAA-CREF. "By using a broad range of activities, including engaging companies, offering socially screened investment products and voting our proxies, we aim to encourage companies in which we invest to act in a way that contributes to their economic health and enhances investors' long-term interests."
As part of its mission to help meet the financial needs of the 3.6 million individuals and more than 26,000 retirement plans who entrust their savings to TIAA-CREF, the organization is:
Promoting long-term value for shareholders. TIAA-CREF encourages companies in which it invests to adopt practices that promote long-term value for shareholders. In the past year, TIAA-CREF voted against directors who comprised the audit or risk committees of Bank of America, Washington Mutual, Morgan Stanley, Citigroup, Wachovia and Capital One in order to hold the boards of those companies responsible for failing to adequately oversee investment risk. TIAA-CREF also voted against many of the executive compensation plans that came up for a vote this year, including the one at Lehman Brothers, because the organization viewed them as excessive.
We also supported proposals on environmental and social proposals that met our governance standards. For example, we voted in favor of a number of proposals asking companies to issue sustainability reports, adopt human rights principles and set targets for greenhouse gas emissions. In February 2008, the Investor Environmental Health Network and the Rose Foundation for Communities and the Environment cited our leadership on proxy voting on environmental issues. In dialogue with companies, we encourage them to disclose their greenhouse gas emissions and submit their executive compensation plans to a shareholder vote.
Engaging with companies that have business ties to Sudan. TIAA-CREF continues a campaign of letter writing and corporate dialogue to encourage 22 portfolio companies (comprising less than one percent of assets managed by TIAA-CREF) that have ties to the government of Sudan to sever those ties or undertake humanitarian initiatives in the region.
Offering socially screened accounts and funds. TIAA-CREF selects companies for inclusion in its Social Choice Account and Social Choice Equity Mutual Fund via the Broad Market Social Index (BMSI), and Global Sustainability Index Ex-US (GSIXUS) a group of companies screened by KLD Research & Analytics, Inc, a leading independent provider of social research. KLD's comprehensive assessment includes companies' employee relations and human rights records. Companies currently excluded from the BMSI include the Coca-Cola Company, Wal-Mart and Altria.
Investing in affordable housing and environmentally-friendly development. TIAA-CREF's Corporate Social Real Estate Program focuses on investments in affordable housing, workforce housing, urban and transit-oriented commercial development, and sustainable ("green") development. Investments in the program this year include a $30 million commitment to the Thomas Properties High-Performance Green Fund, a private equity fund which will invest in commercial properties that will potentially merit a LEED rating from the U.S. Green Building Council (USGBC). This Investment Program also includes a recent commitment of $10 million in the Northwest Louisiana Community Development Fund, a "double-bottom line" fund that will invest in real estate in underserved communities in a ten-parish region of Northwest Louisiana. As of November 2008, TIAA-CREF had an aggregate committed amount of approximately $582 million representing multiple investments in areas earmarked as Economic Development Areas and/or Lower to Moderate Income census tracts.
Investing in Microfinance. In 2008, TIAA-CREF made a $10 million investment in Catalyst Microfinance Investors (CMI), a private equity investment fund focused on microfinance opportunities in Asia and Africa. This investment is part of a $100 million, four-year Global Microfinance Investment Program.
More about TIAA-CREF's work in socially responsible investing is available in "Socially Responsible Investing at TIAA-CREF," available at the company's website.
Participants and the public may also wish to review TIAA-CREF's Policy Statement on Corporate Governance and Social Responsibility, which is available online.
The CREF Social Choice Account is a variable annuity option available through contracts issued by CREF. These contracts are designed for retirement or other long-term goals, and offer a variety of income options, including lifetime income. Payments from the variable annuity accounts [and mutual funds] are not guaranteed and will rise or fall based on investment performance.
The Microfinance and Social Real Estate Program are currently funded through the TIAA General Account. The TIAA General Account is not an insurance or investment offering to the public.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 1 877 518-9161, or go to www.tiaa-cref.org for a current prospectus that contains this and other information. Please read the prospectus carefully before investing.
Annuity products are issued by TIAA (Teachers Insurance and Annuity Association), New York, NY.
© 2009 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017
