Annual Stewardship Report 2024: Consistency and resilience through change

Consistency and resilience through change

Earlier this year we launched our new brand platform, ‘Invest like the future is watching’, which is both a reflection of our 125+ years of experience at adapting to the constantly changing needs of investors, and our focus on long-term, generational investing. Responsible Investing (RI) has played a key role in that history and approach, and the principles of effective stewardship remain a fundamental aspect of our RI program. Our commitment to stewardship reflects a belief that effective governance is critical to managing material risks and opportunities to achieve sustainable growth.

Grounding on strong governance

Given today’s global macroeconomic environment, good corporate governance – the rules, practices and processes by which a company is managed – has become more important than ever. Robust governance is foundational to ensuring that companies operate responsibly on behalf of, and in service to, their stakeholders, including investors. While governance practices and standards continue to evolve, its basic principle has remained consistent over time: address and mitigate the common ‘principal-agent problem’ that is inherent between the owners and managers of an asset. And that principle is critical to the efforts of stakeholders to ensure that companies promote transparency, accountability and a culture of integrity, ultimately supporting long-term performance.

Reflections on the macro context

Standing in the way of predictable long-term performance is a highly dynamic environment filled with challenges to overcome and opportunities to seize. That environment includes:

• Global economic fluctuations, with increasing protectionism and market volatility
• Central banks and policymakers continuing to address concerns over inflation, interest rates, public finances, growth and recession
• Ongoing conflicts in different regions, and rising geopolitical tensions
• Extreme weather events and natural disasters in many parts of the world
• Rapid advancements in technological innovations, from artificial intelligence to energy and healthcare

Against this backdrop, the evolving landscape of sustainability commitments has been a focal point for companies worldwide. In 2024, we observed renewed attention to growth and competitiveness. Sustainability remained important globally, but applications varied by sectors and regions. And while a number of companies reassessed their goals in that area, others acknowledged the critical importance of addressing sustainability-related factors for long-term resilience. Nuveen continues to engage with portfolio companies on these topics and support them in meeting varying expectations.

Additionally, we are noting positive signals towards greater standardization and simplification of reporting requirements across the investment and corporate sectors. Despite some complexities and differences in the paths towards real and effective harmonization, we remain hopeful that ongoing adjustments and calibration will ultimately lead to comparable and consistent frameworks that enable investors to make more informed decisions.

Our consistent and resilient approach

Through these dynamics, our role as stewards of our clients’ assets remains a priority. We recognize that external events play an important role in how companies and other stakeholders react and adapt, but at the same time, we focus on what we can control – constructive engagement and thoughtful exercise of our voting rights, prioritizing our clients’ best interest in support of long-term sustainable value creation.

We focus on key risks and opportunities in our portfolio, and approach them through the lens of materiality, practicality and feasibility to promote best practices and enhance transparency, accountability and impact. We are confident that the engagement and voting activities described in this report through numbers, examples and case studies illustrate the breadth and depth of our program and facilitate a more nuanced understanding of our approach.

As we look to the future, we remain committed to maintaining a consistent and resilient approach as responsible stewards of our clients’ assets, no matter the changes ahead.

We invite you to explore this report, engage to learn more, and share feedback.