Environmentally Responsible Investing at TIAA-CREF

November 10, 2009

Many participants have expressed concern about the environmental impact of their investments. TIAA-CREF takes these concerns seriously, viewing environmental issues through the lens of our fiduciary responsibility to provide a safe and secure retirement for those who entrust their savings to us.

The TIAA-CREF group of companies believes that in the long run, continued economic prosperity depends on responsible stewardship of natural resources. And we believe that companies which incorporate environmental responsibility into business planning will be better positioned to manage the growing risks and opportunities associated with these issues.

Environmental awareness among the public is higher than ever before as issues such as climate change take center stage. Consumers are more concerned about the environmental impact of products, and these concerns also apply more broadly to the companies generating those products and services.

Our work on each of the following fronts reflects our view that environmental stewardship contributes significantly to the long-term success of companies in which we invest, and consequently, benefits the 3.6 million who entrust their savings to us.

Prioritizing Companies’ Environmental Stewardship
TIAA-CREF’s policy on corporate governance enshrines our commitment to environmental sustainability. According to the policy:

“TIAA-CREF recognizes that as a matter of good corporate governance and from the perspective of shareholder value, boards should carefully consider the strategic impact of issues relating to the environment and social responsibility. There is a growing body of research examining the economic consequences of companies’ efforts to promote good environmental and social practices. We support companies’ efforts to evaluate the strategic relevance of these factors, including their impact on business risk, reputation, competitive position and opportunities for growth.”

We work to promote long-term investment value by exercising our shareholder rights to impact the environmental, social and governance policies of the companies in which we invest across the entire TIAA-CREF portfolio – not just in our socially-screened funds and accounts

To engage a company to influence its environmental behavior is better than simply selling shares which only assumes we will have no voice in a company’s environmental stewardship.

Across all our portfolios, TIAA-CREF generally votes in favor of proxy resolutions asking for policies or disclosure on how a company is managing its environmental impact. Those can include asking the company to set specific goals for the reduction of greenhouse gas emissions. Sometimes we are unable to support a resolution because it seeks to micromanage the company or because the company has already taken steps to resolve the issue. However, even then we often speak directly with management to explain our vote, allow them to clarify their environmental policies and encourage greater disclosure of environmental policies and results. This year we supported over half of all proposals submitted on environmental issues, including about 63% relating to climate change.

In addition to proxy voting, we also initiate dialogue with companies to promote environmental responsibility, both singly and in collaboration with our investor partners. One of our Corporate Governance priorities for 2010 is a Climate Risk Initiative to encourage portfolio companies in high-emissions sectors to adopt policies that address risk and opportunities related to global warming. We have identified several companies in these “high-emitting” sectors to talk with directly on climate risk, and will be contacting them soon to talk about their strategies for managing their impact on the environment.

Also as a part of this initiative, TIAA-CREF has written to more than 150 companies in our portfolios to ask them to report on their greenhouse gas emissions through the Carbon Disclosure Project, a group that measures corporations’ carbon output. Read more about the group here.

Finally, we have joined with other investors associated with the Investor Network on Climate Risk, a network of institutional investors and financial institutions that promotes better understanding of the financial risks and investment opportunities posed by climate change. TIAA-CREF will ask oil companies operating in the Canadian tar sands to explain their environmental and community relations policies.

Our votes on shareholder proposals with an environmental impact illustrate our independent, case-by-case analysis of key issues and why we may support some resolutions but not others.

In addition, TIAA-CREF executives and board members regularly raise public awareness of the importance of environmental responsibility in presentations to the public and other stakeholders.

Partnering with Others
Because our voice is more influential when combined with those of others, TIAA-CREF works with other, like-minded investors and other groups to encourage good governance and sustainability.

In March 2009, we became a signatory to the Principles for Responsible Investment (PRI), a global project of the United Nations Environmental Program Finance Initiative and the U.N. Global Compact. The PRI provides a framework for integrating environmental stewardship into investment decision-making and ownership practices.

Some other examples of our partnerships include:

• Carbon Disclosure Project
• Energy Star (Partner of the Year, 2008 and 2009)
• Global Reporting Initiative
• Interfaith Center on Corporate Responsibility (affiliate member)
• Investor Network on Climate Risk
• Social Investment Forum
• US Green Buildings Council
• Urban Land Institute (Responsible Property Investment Council)
• Responsible Property Investment Center
• Green Building Finance & Investment Forum

Managing Environmentally-Friendly Real Estate Holdings
As the owner of 43 million square feet of office buildings, as well as a large portfolio of other commercial and multifamily real estate assets, TIAA-CREF is one of America’s largest institutional real estate investors. By teaming with 35 third-party onsite management companies, we led numerous energy-efficiency projects in 2008 to reduce our environmental footprint while continuing to create value for our clients.

In 2007 our Global Real Estate group created a dedicated unit called Strategic Initiatives which is charged with “green” strategies across TIAA-CREF’s entire real estate portfolio. Since 2002, we have been an EPA Energy Star Partner, and recognized by EPA in 2003 for mandating that its entire office portfolio be benchmarked with this valuable tool.
In 2007, we established a goal to effect a 10% reduction in energy intensity by 2010 across all the office buildings in our real estate portfolio.

So far, we have reduced our office portfolio’s energy intensity by about seven percent. This reduction represents:

• $7.7 million in reduced energy cost
• 75 million kilowatt hours saved
• 52,500 metric tons of carbon dioxide emissions prevented

In November 2008, One Boston Place – a property TIAA has co-owned since 2002 – became the first building in the world to earn a Leadership in Energy and Environmental Design Existing Building Operations & Maintenance (LEED-EBOM) Gold designation from the U.S. Green Building Council. In March 2009, the U.S. Environmental Protection Agency named TIAA-CREF an Energy Star Partner of the Year, the second consecutive year we have won this award. TIAA-CREF remains the only financial services firm to have achieved this honor.

Going forward, our real estate group has a mandate of seeking LEED certification for all new development projects, establishing that threshold as the minimum acceptable standard for building design. Projects that currently fall under this mandate are targeted to achieve LEED-GOLD. Further, we have two LEED Accredited Professionals on the GRE team.

Investing Directly in Environmental Solutions
Environmental stewardship is a central theme for our community investment programs within the TIAA General Account, including our Corporate Social Real Estate Investment Program. For example, our investment in the Thomas Properties Group High Performance Green Fund, a $30 million commitment to a private equity fund investing in commercial properties that seeks substantial reductions in energy use, water consumption, carbon impact and waste output, potentially leading to a LEED rating from the U.S. Green Building Council.

Through our Community Bank Deposit Investment Program, we are a major depositor in ShoreBank Pacific, the first commercial bank in the United States with a commitment to environmentally sustainable community development.

Adhering to Green Policies at our Own Facilities
We also aim to be as good stewards of the environment in our own operations as what we demand of the companies in our portfolios.

We take steps in our own offices to cut our use of resources. For example, in our New York headquarters we’ve cut energy use by nearly 20% compared to 2007 through the use of occupancy sensors to turn lights off in empty offices, and the installation of a high-efficiency cooling system. In our Charlotte campus, energy use is down 13% from 2007 and water use is down by more than a third thanks to low-flow water fixtures and more effective landscaping using native flora. Recycling efforts in our Denver office are helping to divert six tons of trash a month from landfills.

Social Screening
We realize that some participants may choose to invest in a fund that gives special consideration to environmental responsibility. Both the CREF Social Choice Account and the TIAA-CREF Funds - Social Choice Equity Fund incorporate numerous environmental indicators into their comprehensive screening criteria. The portfolios invest in companies which give special consideration to certain environmental, social and governance (ESG) criteria. The ESG evaluation process favors companies that are:

• Strong stewards of the environment
• Devoted to serving local communities and society generally
• Committed to high labor standards for their own employees and those in the supply chain
• Dedicated to producing high quality and safe products
• Managing their companies in an exemplary and ethical manner

To identify these companies, TIAA-CREF uses criteria implemented by KLD Research & Analytics, Inc. (KLD), a leading firm specializing in ESG assessments and social index construction. We consider for our Social Choice products those companies among FTSE KLD US All Cap Sustainability Index and FTSE KLD Global Sustainability ex-US Index to meet or exceed the screening criteria.

Key indicators for different industry sectors are used to evaluate a company’s environmental performance relative to that of sector peers. Examples of environmental assessment categories are management systems, types of products and services produced, natural resource use, effect on climate change, and waste and emissions. Companies are subsequently ranked by industry sector peer group according to the ESG performance ratings. Companies in industries with the largest footprints face particular challenges in meeting the minimum screening criteria: Oil and Gas; Chemicals; Mining; and Transportation. In all sectors, companies with exemplary initiatives with respect to alternative energy, clean technologies, pollution prevention, recycling, and environmental management systems will generally score higher.

Socially-screened assets under management at TIAA-CREF have grown substantially since the launch of our first socially screened portfolio, the CREF Social Choice Account, in 1990. As of September 30, 2009, our socially screened assets totaled nearly $9 billion. In addition to the CREF Social Choice Account, which includes both equity and fixed-income segments, we offer socially screened equity-only portfolios through mutual funds and other investments available to individuals and institutions.

Through our social screening process, we offer investors the opportunity to align their social values with competitive long-term returns.

To learn more, refer to the prospectus documents at:
CREF Social Choice Account
Social Choice Equity Mutual Fund