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Making an impact

Farmland sustainability report | 2019

Sustainability in focus – making an impact

TIAA has been making a difference in the world for more than a century. Nuveen carries on this tradition by sponsoring educational opportunities and research in the industry, engaging proactively in the communities where we live and work, and supporting important causes around the world through volunteerism and philanthropy.

Nuffield Scholarship

For Carla Borges and Luciano Loman, opportunity has blossomed into innovation

Through Nuffield I have learned key skills for sustainable agriculture and how to apply them for the sustainable development of society. I am able to be more active in the industry and more resilient as I face the challenges of being a farmer and farm manager.

— Carla Borges, Nuffield Scholarship recipient

Read this article on page 26 of the full report.

Preserving local heritage in Brazil: Alliance with Abaçaí

In 2009, Westchester purchased a farm in Rafard, Brazil, which included a 30-building village that was the birthplace of renowned modernist artist Tarsila do Amaral. At the time, local stakeholders, led by a historian and former mayor, had been trying to have the neglected village buildings protected as a heritage site.

In light of this effort, Westchester engaged a local non-governmental entity, Abaçaí, to determine what role the village might play in the community’s future. Abaçaí, which has decades of experience in cultural promotion, envisioned the creation of a cultural center where local traditions could be shared with visitors and the village’s assets would be preserved for future generations. Westchester donated the village site to Abaçaí, a move that local stakeholders welcomed and which coincided with the village’s receipt of federal protection.

The dream of making the village a vital cultural resource is coming true through dynamic quarterly activities. For example, in spring 2019 Abaçaí hosted a six-day event that paid tribute to indigenous cultures from native Brazilian remnant tribes. More than 7,000 people took part, including 4,200 students from nine surrounding cities.

After Westchester’s arrival, eyes were opened to the importance of this property’s heritage, and doors were opened for its preservation.

— Toninho Macedo, Founder and Director of Abaçaí

Social assessments in Brazil

Engaging local communities from the very beginning

In 2018, Nuveen and Westchester developed a new social assessment for farmland investments in rural communities to deepen our pre-acquisition due diligence activities in Brazil. The assessment gathers and analyzes community-level social, economic and environmental data to holistically gauge the risks and opportunities of specific property acquisitions.

To gain a holistic view, the assessment draws from onsite evaluations, secondary sources and interviews with local community members such as NGO representatives, workers, priests and town hall employees. The assessment explores many community and investment factors, such as:

  • Historical narratives related to the farmland site and the local community
  • Land title and ownership history for the site
  • Government policy and planning efforts that may affect the site or local economy
  • Socioeconomic development near the farmland site
  • Economic development issues and opportunities related to labour, agricultural production, logistics, technical assistance to farmers, and agricultural credit
  • Community members’ impression of the state of natural resources — water, soil and forestry
  • Availability of goods and services, especially electricity, drinking water, health care and recreation

The assessment represents an exciting new tool in our responsible investment efforts. By including community-level social, economic and environmental data in the investment process Westchester can identify and proactively engage with stakeholders surrounding the farms under management.

Looking ahead

As part of TIAA, Nuveen proudly embraces core values of acting with integrity and delivering excellence. One facet of our commitment to these values is to pursue continuous improvement, which is reflected in the ongoing refinement of our sustainability approach.

ESG Committee

This year Westchester established a dedicated Environmental, Social and Governance (ESG) committee, with representatives from every region where Westchester operates, as well as members of the portfolio management team and dedicated ESG staff. This committee will work to integrate our ESG goals and objectives across our local business structures to help address regional intricacies in the evolution of our ESG strategy, and will oversee Westchester’s global sustainability performance.

Setting a higher benchmark with revised KPIs

TIAA and Westchester originally developed our customized ESG Key Performance Indicators (KPIs) in 2013 to assess our farmland sustainability performance against the UN-backed Principles for Responsible Investment in Farmland. Since then we’re proud to have reached 100% in almost all of these benchmarks. Now it is time to raise the bar higher and adapt our KPIs to foster even greater performance improvement. Once we’ve revised our KPIs we will develop specific ESG targets as well. Both the targets and revised KPIs will seek to address the UN SDGs and will have a 5-year horizon.

Develop a monitoring and benchmarking framework

We also plan to expand our Environmental, Social and Governance (ESG) audit program to track and benchmark sustainability performance across our global portfolio. This business-wide approach will allow us to compare and contrast regional performance, providing a tool to manage implementation of our goals and leading to a more holistic view of sustainability efforts across the organization.

Carbon and climate change

Climate change represents a major threat to agriculture’s ability to deliver food and vital goods to the world’s growing population. The effects of climate change — from floods and droughts, to wildfires and storms — can also severely impact farmland assets over both the short and long term. As a farmland investor, we understand how farm management activities can impact climate change, both in negative and positive ways. That’s why we are committed to better understanding how our own agricultural activities relate to changes in climate — specifically by quantifying and accounting for our carbon footprint and by employing specific climate change risk analyses to understand the exposure of our assets.

These initiatives represent just a few ways in which we’re innovating to make our sustainability practices stronger, our measurement techniques more accurate, and our management capabilities more effective in this important area of what we do.

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Risks and other important considerations

Farmland investments are less developed, more illiquid and less transparent compared to traditional asset classes. Investments will be subject to risks generally associated with the ownership of real estate-related assets and foreign investing, including changes in economic conditions, currency values, environmental risks, the cost of and ability to obtain insurance and risks related to leasing of properties.

This material is provided for informational or educational purposes only and does not constitute a solicitation of any securities in any jurisdiction in which such solicitation is unlawful or to any person to whom it is unlawful. Moreover, it neither constitutes an offer to enter into an investment agreement with the recipient of this document nor an invitation to respond to it by making an offer to enter into an investment agreement. 

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, certain historical performance information of other investment vehicles or composite accounts managed by Nuveen may be included in this material and such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Nuveen to be reliable, and not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Company name is only for explanatory purposes and does not constitute as investment advice and is subject to change. Any investments named within this material may not necessarily be held in any funds/accounts managed by Nuveen. Reliance upon information in this material is at the sole discretion of the reader. Views of the author may not necessarily reflect the view s of Nuveen as a whole or any part thereof. 

Past performance is not a guide to future performance
. Investment involves risk, including loss of principal. The value of investments and the income from them can fall as well as rise and is not guaranteed. Changes in the rates of exchange between currencies may cause the value of investments to fluctuate.

This information does not constitute investment research as defined under MiFID.

The investment advisory services, strategies and expertise of TIAA Investments, a division of Nuveen, are provided by Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC.