Leading financial services provider TIAA announced today a new commitment to achieve net zero carbon emissions by 2050 in its General Account, the $280 billion insurance investment account that supports the flagship TIAA Traditional annuity.
TIAA President and CEO Thasunda Brown Duckett, said:
“We believe climate risk is an investment risk that we must manage over time, so this pledge is an affirmation of our responsibility to achieve the best possible investment outcomes for our clients. As an active manager of a diversified investment account, we will get to net zero over time through investment selection, portfolio repositioning and continued engagement with companies and carbon producers to reduce emissions around the world.”
The commitment follows recent announcements by TIAA’s third-party investment manager, Nuveen, regarding its own progress on climate-focused investing, including the launch earlier this year of net zero carbon strategy for its entire global real estate portfolio, committing to achieve net zero carbon across its $133 billion of assets by 2040. Nuveen has also emerged as a leading voice on climate engagement, joining investor initiative Climate Action 100+ in September 2020, targeting the world’s largest corporate greenhouse gas emitters to promote taking necessary action on climate change.
Amy O’Brien, Head of Responsible Investing at Nuveen, said:
“We engage with the management teams of thousands of companies every year to advocate for managing climate risk and other ESG initiatives. Engagement will remain a critical tool that supports the General Account’s efforts as we continue to press carbon-intensive companies and individual assets to align with the goals of the Paris Agreement.”
According to TIAA, the fund will reach net zero through efforts to significantly reduce the carbon footprint of its portfolio, seeking out investments in climate solution areas, such as renewable energy, energy efficient real estate, as well as in companies involved in the transition to a low carbon economy. Remaining portfolio emissions will offset through investments that remove carbon, such as nature-based solutions including afforestation, reforestation and sustainable farming.
As part of its new goal, TIAA has committed to implement five-year interim targets leading up to 2050, with the scope and level of emissions reduction for each target will be tied to a variety of factors, including climate data availability, results of on-going climate scenario analyses, prevailing market conditions, the current and future regulatory environment and best practices observed among peers with similar net zero targets.
Nick Liolis, Chief Investment Officer of the General Account, said:
“We are making this important change to create a resilient portfolio that will perform better over the long run to meet our obligations to retirement investors, which extend into perpetuity. We believe that this new target and strengthened commitment to responsible investing will help us drive better results and reduce risk.”