2022 – 2023 Annual Stewardship Report: Aligning advocacy with actions

• Welcome to the Nuveen 2022 – 2023 Stewardship Report. For more than 125 years, along with our parent company TIAA, we have helped millions of investors achieve long-term financial health.

Resiliency in the face of disruption

2023 was an unprecedented year. Companies and investors were challenged by persistent inflation, rising interest rates, a banking crisis in the U.S., and supply chain issues that sparked fears of a global economic downturn. Conflict in Ukraine and the Middle East further heightened political tensions, and we saw a surge of technological innovation in generative artificial intelligence. As asset managers, we look to achieve resiliency in the face of disruption. We recognize the responsibility we have as stewards of our clients' capital, aiming to manage risk and deliver on focused outcomes for over $1 trillion** of their assets.

Despite these challenges, we remain dedicated and focused on advancing responsible investing practices, with preserving and enhancing long-term shareholder value at the center of our approach.

In this report, we recap our efforts to remain diligent in our ability to produce meaningful outcomes for our clients. Our approach is rooted in our fiduciary duty to maximize shareholder value, and we utilize our relationships and influence with companies through the lens of materiality, practicality and feasibility. We recognize that ‘impact’ in the investing world can take several forms, and we believe that transparency and accountability are necessary foundations for producing real-world outcomes.

Throughout all this disruption, we believe it is important to celebrate our successes and the progress made from our stewardship efforts. This past year, we engaged with over 400* companies on topics including:

• The global energy transition and climate risk
• Natural capital and biodiversity
• Diversity and non-discrimination
• Labor standards and human rights
• Product and consumer responsibilities

We also recognize the need to continue to adapt to an ever-evolving set of complex and interconnected global challenges. In 2023, we engaged companies and industry leaders on emerging issues such as responsible use of artificial intelligence, customer privacy and the importance of a “just transition” to a low-carbon economy. Engaging in these conversations can help ensure that our stewardship program adapts to rapidly changing market conditions.

Institutional investors can employ a variety of tactics to address systemic challenges in the real-world economy and identify investment opportunities that are most resilient to macroeconomic, regulatory and market dynamics. We utilize proprietary frameworks, along with global standards of transparency, to help our investment teams make more informed investment decisions.

We believe understanding where a company is on its journey and where it will find its next milestone is critical to calibrating where stewardship can be most effective.

At the company or portfolio level, distinguishing between the possibility for improvement and the desired end-state for stakeholders more clearly establishes what can be achieved through stewardship and what is required to be achieved through investment (re)allocation. It is unlikely that every company in a traditional portfolio will adopt a best practice or that a benchmark portfolio will organically achieve a certain stakeholder outcome. The associated investment returns as companies adopt best practices or achieve a particular impact will also vary along the way.

In 2020, we developed a three-year escalation strategy that creates a roadmap for pushing companies that significantly lag versus peers and who have been unresponsive to engagement. This strategy has allowed us to connect more directly unaddressed environmental, social and governance concerns to our votes on shareholder proposals and company directors. We continue to evolve and iterate this escalation strategy in our Climate 2.0 program.

Beyond this, we developed a unique framework to organize the ESG information that our stewardship team is collecting from companies and clearly communicate positive outcomes without overstating what they achieve. Our framework buckets key performance indicators (KPIs) based on the objectives they service: transparency, accountability or impact. We have continued to find that distinguishing metrics and results based on where they fall in this framework adds value to our conversations with investee companies, gives us a strong foundation for regular evaluation of progress, and resonates with clients who want to understand the value of stewardship and seek credibility from asset managers.

And so, while disruption was ever-present throughout 2023, we remain encouraged by our ability to produce real-world outcomes for our clients over the long-term. Heading into 2024, we must remain resilient, and continue to evolve and adapt to an ever-changing world.

We are extremely thankful for the trust that our investors place in our process, and we look forward to serving you for years to come.

View our At-a-glance Stewardship report