The story of responsible investing
- Is a philosophy that incorporates ESG factors
- Incorporates these factors into investment analysis, portfolio construction and monitoring across asset classes
- Pursues the objectives: to enhance long-term performance, manage risk and align client values
Different names. Similar goals.
RI has become the globally recognized umbrella term for:
- Social impact
- Impact investing
- Sustainable, responsible and impact
- Socially responsible investing
Pursue competitive returns. Deliver positive social and environmental results.
Responsible investing (RI) is an expanding investment discipline that recognizes the
importance of environmental, social and governance (ESG) factors across asset classes.
Though RI goes by many different names, its approaches all share similar goals: better
long-term performance and risk management while promoting positive outcomes in the
world around us.
RI has moved into the mainstream as investors have begun to recognize that companies’ willingness to embrace ethical criteria is a hallmark of any well-run organization. Ignoring ESG factors in investing is ignoring important risks and opportunities that may have a material effect on performance. Over time, investors have begun to view RI as analogous and even superior to ‘conventional’ investing.
How RI is applied
Investors apply RI in a variety of ways across asset classes,
The broadening RI landscape
More investors around the world have begun using RI in an increasing variety of ways and demand for new approaches has increased at an impressive rate. With a commitment to RI that dates back five decades, we have played a key role in that growth.
A unique set of opportunities and risks
As more investors recognize its unique potential for attractive performance coupled with positive outcomes, RI principles have been accepted widely throughout the industry.
Increased interest in RI
AUM in the US on the rise1
Broad, public interest in responsible investing approaches is
The United Nations Principles for Responsible Investment4 is the world’s leading proponent of responsible investing. Launched in 2006, its global investor network has over 1,900 signatory firms and represents $81.7T in assets under management.5
Why responsible investing ... now.
As a globally recognized investment approach, RI is gaining momentum among all kinds
of investors. The increasing interest reflects twin concerns with achieving competitive
returns while considering an investment’s ESG ramifications. The industry has
responded by refining and expanding RI capabilities in the marketplace, leading to the
development of more, sophisticated RI data, tools and strategies.
The mind of an RI investor
RI isn’t just for socially conscious investors. Applying ESG criteria offers additional analysis during the security selection process. Today, investors apply RI approaches for a variety of reasons:
RI expectations are changing
Demand and evolving marketplace expectations are driving much of the growth in RI.
The primary reasons?
More than one way to apply RI
In recent years, RI has seen the introduction of new approaches as well as numerous refinements. Investors adopt RI for different reasons and many portfolios include multiple RI approaches. What they all seek to accomplish is the application of ESG factors to create better outcomes for investors, our communities and the planet.
Assets in which ESG factors are used to make investment decisions overlap with those
involving shareholder engagement or active ownership.
Although RI began by emphasizing shareholder engagement, it has progressed to include other approaches, especially the systematic integration of ESG factors within portfolio management.
RI is in our DNA
Beginning with our engagement on product and social issues in the 1970s, we were an early and influential proponent of responsible investing. Our RI program offers a unifying RI framework across the firm that guides RI implementation in our daily activities. The framework maintains the firm’s RI philosophy and guidelines for integration in our investment decisions and products.
Portfolios with a purpose
Today Nuveen aims to apply RI principles across more than $988B in AUM, including
over $650B committed to UN Principles for RI.8
With more than $21B under management in ESG-focused products, Nuveen is one of the largest US managers of portfolios that reflect ESG criteria explicitly.9
Unlock investment potential with Nuveen
We believe alignment to these principles can provide enduring benefits for our clients and communities.
- Integrate ESG factors into our investment process across funds and asset classes.
- Engage using our influence with companies and issuers to help them innovate and operate more effectively, and partnering with stakeholders to define and advance environmental, social, and governance best practices.
- Impact by working to drive positive environmental and social outcomes through our investing practices.
Tomorrow's performance for tomorrow's world
At Nuveen, we apply all three principles in an overall business and portfolio
management framework designed to deliver competitive performance.
How we do it:
- By collaborating and sharing actionable insights with our investment professionals to facilitate better investing decisions
- By meeting with company CEOs, senior management and boards of directors to produce measurable outcomes, collaborating with industry peers to set and follow standards, and influencing legislation, public policy and best practices
- By investing in opportunities with measurable outcomes in public and private markets, such as affordable housing and low carbon; and by setting best practices for measuring investment outcomes to help clients understand, quantify and communicate the social and environmental impact of investment portfolios
More on responsible investing at Nuveen
GIIN: Global Impact Investing Network
ILG: Investment Leaders Group
Morningstar Sustainability Initiative
UNPRI: UN Principles for Responsible Investment
USSIF: Forum for Sustainable and Responsible Investment
In 2014, TIAA and Nuveen came together to expand our capabilities across all investment types. Today, our customers fully benefit from our combined history of stability, retirement leadership and innovation.11
2 Nuveen Fourth Annual Responsible Investing Survey, 2018.
3 UN PRI website: www.unpri.org/about, Apr 2018.
4 UN PRI website: www.unpri.org/directory.
5 UN PRI website: www.unpri.org/pri/about-the-pri, Aug 2018.
6 US SIF Foundation; note: ESG incorporation assets in this figure include those in Community Investing Institutions.
7 US SIF Foundation, 2018.
8 As of 30 Sept 2018.
9 TIAA Investments is one of the largest managers among ESG mutual fund, ETFs and variable insurance managers as of 30 Sept 2018 according to analysis of Morningstar Direct data from FUSE Research Network. Fuse Research Network is a source for industry guidance to firms in the asset management industry and for obtaining ongoing research and market intelligence.
10 Commitments data is as of 31 Dec 2016.
11 Reference to financial stability does not apply to the investment products offered.
Risks and other important considerations
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.
An investment deemed consistent with applicable Environmental Social Governance (ESG) guidelines may forgo some market opportunities available to investments that don’t use ESG criteria.