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Farmland sustainability report | 2019

Protecting Brazil’s forests


Nuveen’s zero deforestation policy reflects commitment to long-term stewardship

Nuveen understands long term investment horizons, holding many of our assets for decades. Accordingly, we strive to demonstrate sound environmental stewardship in our practices, whether in our pre-acquisition due diligence or in our post-acquisition management practices, including encouraging impartial, third-party certification of our sustainability efforts.

In pursuing this work, we are keenly aware of factors that threaten not only agricultural productivity but also the earth’s overall health. One of these factors — deforestation — is very troubling because forests sequester prodigious quantities of carbon, making them necessary to limit global temperature increases and changes in climate.

Deforestation is a particular concern in regions where agricultural development is occurring very quickly, such as in South America. Nuveen works to protect against deforestation in the region by avoiding recently deforested areas when we acquire new farmland. We adhere to the Brazilian Forest Code, which protects forests on private properties and encourages restoration of legal reserves for native reservations. We also protect more than 226,000 acres of native vegetation in Brazil.

As a further demonstration of our commitment to good stewardship, in 2018 Nuveen adopted a Zero Deforestation Policy for our farmland assets in Brazil. The Policy introduces deforestation cut-off dates for five biomes in Brazil and aims to ensure that our investments do not encourage the depletion of forested areas and native vegetation on owned land or land to be acquired.

We have integrated this Policy into our investment due diligence process. We use satellite-based mapping technologies, combined in some circumstances with biomass measurement information, to determine if a plot of land adheres to the Policy. A third party conducts the analysis and provides results to Nuveen.


Sustainability by the numbers: Brazil
  • 226K  
    Acres of land preserved by Westchester in Brazil as Areas of Permanent Preservation and Legal Reserves (approx.)
  • 1.7M
    Native trees planted on Westchester properties in Brazil.
  • 4.5x France
    Size of protected areas within rural private properties in Brazil
  • 1.1M
    Square miles of protected areas within rural private properties in Brazil, an area roughly 4.5 times the size of France. The protected land’s value is estimated to be nearly $800 billion USD.

A look inside: Zero deforestation policy

Nuveen’s Zero Deforestation Policy is one example of a continued commitment to sustainable land management and a direct contribution to SDG 15 — by avoiding deforestation, increasing afforestation and reforestation and halting biodiversity loss. Nuveen implements the Policy in Brazil, which is working to curb deforestation levels that were once the world’s highest.

The Policy is customized to five biomes in Brazil based on the distinct characteristics of each. We are committed to refraining from acquiring land that has been cleared of native vegetation after the dates in the table at right. These dates reflect relevant deforestation protocols such as the Soy Moratorium Protocol and Grãos Verdes Protocol. The Policy also aligns with the UN Convention to Combat Desertification, the Brazilian Forest Code and other Brazilian federal laws that protect natural resources.


Chart showing Biome's and their cut-off date

 

Going above and beyond

Catuaí Norte farm, purchased by Westchester in 2013, has a total area of 44,045 acres in the Cerrado biome. About 45% of the farm is covered in native vegetation, of which 38% is registered as a Legal Reserve to meet the government’s preservation requirements. Technically, this means that an additional 3,012 acres of the farm’s natural vegetation could be cleared while still complying with the law. However, due to Nuveen’s Zero Deforestation Policy, this area — 7% of the total acreage — will not be converted to cropland. We are being true to our Policy.

In the satellite image, the area just to the right of center — labeled Extra preserved vegetation — is where Westchester is refraining from cultivating in keeping with Nuveen’s Zero Deforestation Policy.

 

Satellite image of Catuai notre farm, Brazil

 


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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.