In the early 1970s, we became one of the first institutional investors to engage with companies on social issues.
We believe that effective social responsibility policies may help companies manage risk and improve financial performance.
This in turn contributes to the strength of the return we seek for our participants. And it is their financial well-being that is our first and foremost concern.
Where appropriate, we incorporate Environmental, Social and Governance (ESG) considerations into the selection and monitoring of our investments across a variety of asset classes and products, including our responsible investment funds, community and impact investing programs, alternative investments, real estate, as well as the individual portfolios that we offer at our clients’ request.
For example, our Social Choice Fund family seeks investment returns that reflect the broad investment performance of the financial markets while giving special consideration to ESG criteria.
The Social Choice Account — initially launched in 1990 — has more than $12 billion in assets under management as of March 31, 2013.
Our process for determining which companies are eligible for investment in the Funds is rigorous and transparent, implemented through partnership with a well-respected independent investment research firm
All companies must meet or exceed minimum ESG performance standards to be considered for our portfolio. The selection process favors companies who are industry leaders in managing risks and opportunities related to key ESG issues.
Companies are evaluated on the most relevant ESG issues for their industry group. A company’s involvement in ESG-related controversies and violations of international standards are other considerations we take into account.
Ongoing monitoring of our investment holdings to make sure they continue to satisfy the ESG criteria is an important part of our Social Choice portfolio management process.
In keeping with the mission of our organization, we are dedicated to protecting the long-term interests of our participants and other stakeholders by closely monitoring the ESG practices of corporations in which we invest.
We do this by thoughtfully voting our proxies, engaging in dialogue with portfolio companies, and contributing to the broader discussion about best practice standards for corporate governance and sustainability.
Over the years, we’ve developed procedures to carefully analyze and vote on all proxy proposals brought before our portfolio companies. We make voting decisions on a case-by-case basis according to the policies approved by the TIAA and CREF Committees on Corporate Governance and Social Responsibility.
We also communicate with hundreds of companies each year by writing letters and meeting directly with board directors and corporate management. We engage privately with portfolio companies when we sense potential shortcomings in their governance or sustainability policies that we believe may impact their performance.
This strategy of “quiet diplomacy” reflects our belief and past experience that informed dialogue with board members and senior executives — rather than public confrontation — will most likely lead to a mutually productive outcome. For this reason, we do not disclose the names of companies with whom we communicate.
For more information about our process for determining priorities for corporate engagement, please see our frequently asked questions .
We seek to increase the amount and quality of information available to investors regarding ESG issues. We work with others to establish frameworks for the disclosure of this information by investors and companies.
For many years TIAA-CREF has been known as a thought leader in the area of responsible investment. We collaborate with other financial and corporate institutions in developing standards on best practices for corporate governance and social responsibility.
For example, TIAA-CREF’s own President and CEO Roger Ferguson served as the Chairman of a Group of 30 Steering Committee for a project on the governance of major financial institutions.
Their research resulted in a report titled “Toward Effective Governance of Financial Institutions” which provides some insight to those with policymaking and operations responsibilities for effective governance in the world’s greatest financial institutions.
We are also:
We also collaborate with like-minded organizations to magnify our impact, ensure that our own approaches reflect best practices and actively contribute to future needs.
Reporting on our activities is an important part of our ongoing engagement with stakeholders. Follow the statuses of some of our initiatives by reading the reports below.