Early adoption has allowed the firm to develop in-house expertise, specifically a 28-person Responsible Investing team. That team oversees data collection from a variety of third-party sources and partners with the firm’s investment teams to identify where ESG data is most relevant. It has also built a robust internal platform that allows the creation of proprietary data points and which integrates with other common investment tools, ensuring that ESG data remains at the fingertips of the investment team. Certain members of this ESG team are dedicated to specific strategies and asset classes, while others work on proxy voting, active ownership, and reporting.
In most cases, the firm’s active ownership is handled by the centralized ESG team, which has developed thorough proxy-voting guidelines and works with issuers of social- and environmental-impact bonds to ensure accurate reporting. However, this only applies to the firm’s core investment teams; smaller affiliated teams can vote their proxies independently.
One meaningful drawback to the firm’s ESG efforts is that its multiaffiliate model means there has been uneven implementation. Integration with the ESG team is strongest on products managed by legacy TIAA investors, while more-boutique teams that joined with the 2014 TIAA/Nuveen merger are not as far along. The firm has no intention of turning every product into an ESG-branded one; rather, the goal is to systematically integrate ESG factors to improve investment processes in areas like risk management. The firm has already made strong progress in that effort, and, given its very public support for ESG investing through aggressive marketing and education, it will remain a priority into the future.