2019 – 2020 Engagement Report: Challenge and opportunity
In our clients’ best interests: a focus on active ownership
A letter from Jose Minaya, Chief Executive Officer, Nuveen and Amy O'Brien, Global Head of Responsible Investing, Nuveen
The year 2020 reminded the world once again how profoundly sudden shocks can upset economies and markets — and just how critical it is for companies to plan for both short- and long-term disruptions.
As the coronavirus pandemic took hold, we were also reminded of how a company’s interests and future depend on multiple, critical stakeholders, including employees, clients, suppliers, communities and the world at large.
As the asset manager of TIAA, Nuveen helps safeguard the retirements of millions of people, including educators, medical professionals and institutional and individual investors of all types, and we saw first-hand the sacrifices of those whose jobs are literally about anticipating and trying to prevent crises. This has reinforced our sense of responsibility for both the financial security of our clients and the well-being of the world we live in and furthers our belief that the two are inextricably linked.
As both an asset owner and an asset manager, we have long recognized that companies that attend to the issues and needs of their many stakeholders will simply perform better than their peers over the long-term, supporting enduring shareholder value and lasting societal change. However, as ESG-related risks become even more imminent and better understood, we find that the performance implications of strong or weak management can become even more immediate. The fact is that considering ESG factors and engaging with issuers where there are areas for concern or opportunity is in the best interest of our clients. And by championing the importance of companies’ resilience and care for all of their stakeholders, we also serve our core purpose: We invest to create an enduring impact on our world.
This conviction underpins our commitment to Responsible Investing (RI) across all of our assets. In collaboration, dedicated RI specialists and investment teams bring key environmental, social and governance (ESG) factors into the evaluation and management of our investments, encompassing crucial factors such as climate change, inclusion and diversity, workforce equity, board quality, business ethics and many more. In effect, such factors provide management teams with a road map for driving attractive long-term investor returns while creating a more sustainable economic system. As “active owners,” we also engage consistently with companies and other issuers to encourage broader adoption of practices and policies for better management of ESG factors.
In this report, you will find numerous highlights of our RI engagement activities, describing:
- How we use our influence, relationships and proxy voting to encourage issuers to effectively measure and manage their ESG risks and opportunities
- How we use constructive dialogue with regulators, public policy makers and industry bodies to help promote RI best practice globally
- How the outcomes of our engagement efforts demonstrate that “active ownership” truly can generate change by:
- Illuminating the relationship between a broader stakeholder lens and long-term value creation and risk mitigation
- Driving the disclosure of more standardized, actionable ESG information
- Proactively addressing the potential impact of change and disruption and the implications for business operations and corporate strategy
A straightforward conviction
RI is deeply embedded in Nuveen and TIAA’s DNA. We are one of the asset management industry’s pioneers in this area, with five decades of RI leadership. Our engagement work is a potent expression of that leadership.
From the beginning, we have held that responsible investing is sound investing and delivers powerful, demonstrable financial advantages for clients alongside societal benefits. We state this conviction clearly in our policy statement on responsible investing (7th edition):
… In our view, issuers that exercise diligence in their consideration of ESG issues are more competitive and can take better advantage of operational efficiencies, advance product innovation and reduce reputational risk. Failure to proactively address these issues can negatively affect individual businesses, investor returns and the market as a whole.
Adapting to a rapidly changing world
Responsible investing is fast evolving, driven by the emergence of new risks, challenges and opportunities across the worldwide economy. The challenges include globalization and technological innovation as well as climate change and the coronavirus, which has threatened both the global economy as well as public health. But we also see the emergence of new approaches for managing the negative impacts of such forces and encouraging beneficial outcomes.
We have the tools and insights necessary to navigate this complex landscape, and we are proud of our achievements for our clients. But we realize too that we must constantly strengthen our commitment to investing responsibly. We hope you consider this report a meaningful illustration of this pledge.
We deeply appreciate the trust that you have placed in Nuveen and encourage you to let us know if you have questions.