PRI accountability mechanism fails, enables greenwashing by trillion dollar pension fund
December 13th, 2022
New York (US) – The Board of the UN-supported Principles for Responsible Investment (PRI) confirmed its decision to dismiss a complaint filed against the $1.2 trillion pension fund Teachers Insurance & Annuity Association (TIAA) by nearly 800 TIAA clients—faculty from a wide range of fields including climate science and medicine. The PRI’s refusal to act effectively enables TIAA to continue to “climate-wash,” through its status as a Signatory to the PRI, its $78 billion in fossil fuel investments and substantial land holdings linked to deforestation and human rights violations. TIAA’s bond investments include the notorious Adani Group, which is now developing more new thermal coal mining capacity than any other private company. TIAA is the world’s 4th largest holder of coal bonds and the world’s 8th largest holder of oil and gas bonds, among its many fossil fuel investments.
The PRI’s hands-off approach to TIAA’s egregious investments and systematic climate greenwashing marks the end of the PRI’s relevance as a symbol of responsible, climate-safe investment, unless stronger criteria and accountability processes are established for its membership.
The complaint, filed on October 19th against TIAA’s principal asset manager and wholly owned subsidiary Nuveen, a PRI signatory, documents how the firm has systematically violated each of the PRI’s six principles through its climate-harming investment practices, and called for its delisting if the problems are unaddressed. The complaint details TIAA’s $9.1 billion in coal industry bonds and investment practices that are clearly incompatible with a 1.5ºC aligned net zero pathway; systematic disregard for land rights and livelihoods in its investments in Brazilian soy farms; mislabeling of fossil fuel-laden funds as “sustainable”; and persistent greenwashing.
In an email to the complainants dated December 9th, PRI wrote “The PRI Board reviewed a complaint about Nuveen and Nuveen’s full response and decided that the allegations do not constitute a breach of the policy. As such, there is no reason to change Nuveen’s status as a PRI signatory.” PRI further stated, “Signatories ultimately choose how they go about implementing the Principles, in-line with their own investment beliefs, investor duties, commitments, and policies.” PRI declined complainants’ request to publish Nuveen’s response.
Caroline Levine, Ryan Professor of the Humanities at Cornell University and a TIAA-Divest coordinating committee member, said “Today, the PRI’s formal response to the complaint gives the green light to irresponsible investors like TIAA, who can make themselves look good by signing onto the Principles for Responsible Investment and then do exactly as they please, including pouring money into the likes of Adani, Exxon, Chevron, and Halliburton.”
Bill McKibben, author, climate expert, Schumann Distinguished Scholar at Middlebury College, TIAA client and complaint signatory, commented: “TIAA is going to be very sorry that PRI didn’t take action and save it from itself. Clearly it’s crazy for the pensions of the very people who did the research to understand global warming to be invested in the companies that are producing this crisis. And now those pensioners–like me–will have to stand up ourselves and insist. We’re watching the daily devastation of climate change, but we’re not standing idly as we do so. We’re angry and ready to push cynical institutions like TIAA.”
Last year, TIAA committed to achieve net zero emissions by 2050 for its $300 billion General Account, one third of which the complaint found was heavily weighted with fossil fuels in the form of public corporate bonds. However, TIAA has failed to set an emissions reduction target that covers all assets under management nor to set interim goals for its General Account, and TIAA has stated it will not consider Scope 3 emissions of its investments.
Hana Heineken, Senior Attorney at the Center for International Environmental Law (CIEL), who assisted in the filing of the complaint, said “TIAA’s conduct epitomizes the net-zero greenwashing that the UN Secretary General has called a sham and a ‘toxic cover-up.’ PRI’s refusal to act on the serious allegations in this complaint, in the midst of mounting climate chaos, sends the wrong message at the wrong time. TIAA has a fiduciary duty to act in the long-term interests of its beneficiaries, and that means taking meaningful climate action.”
Supporting Quotes:
Bill Kish, Co-Founder of TIAA-Divest!, said: “Unfortunately PRI has proven itself to be little more than a greenwash-enabler. However, there are many other avenues that we can and will pursue. We are confident that TIAA will eventually come to understand that giving their customers exactly what they don’t want is a poor business model.”
Coedie McAvoy, Wangan and Jagalingou Senior Cultural Custodian, said, “The damage enabled by TIAA’s investments in the Adani Group might be abstract for the boards of TIAA/Nuveen and the UN PRI. But for Wangan and Jagalingou people the harm is very real. We’ve been on Adani’s Carmichael mining lease conducting our Waddananngu cultural ceremony for over 470 days now – breathing the dust and pollution from Adani’s coal mine and bearing witness as Adani destroys the sacred lands and waters that our ancestors cared for for millenia. TIAA’s funding of Adani makes it complicit in Adani’s violation of our human rights and its destruction of our cultural heritage. We demand that TIAA divest from all Adani Group companies and refuse any further funding to Adani until it abandons its Carmichael coal mine.”
Amy Gray, Senior Climate Finance Strategist at Stand.earth and coordinator of the Climate Safe Pensions Network, said “We cannot afford any more stalling tactics from TIAA, and fossil fuel divestment is an investment in our collective future. Frontline communities won’t wait for financial institutions to appease fossil fuel corporations while our homes burn and flood, while our bodies are polluted, and while our children’s futures are destroyed for profit. TIAA/Nuveen must heed the writing on the wall, set the standard for the industry, and stop fossil fuel financing now.”
Soul Fire Farm, one of several grassroots organizations and nonprofits that have voiced support for the complaint, added, “As an Afro-Indigenous centered community farm, we are aware of the ways TIAA’s harmful land acquisition practices impact the communities in which our work is anchored. The complaint rightly identifies that ‘In the last decade, TIAA has increased its land accumulation in Mississippi by five-fold…precisely in the region where Black Farmers have lost the largest amount of land in recent decades due to discriminatory practices.’”
Press contact:
Cate Bonacini, CIEL +1-202-742-5847 press@ciel.org
Notes to Editors:
- Nuveen has been a member of the PRI since December 18, 2018.
- As of December 10, 2022, 782 faculty and staff from over 200 institutions have joined the PRI complaint against TIAA/Nuveen, including Bill McKibben, Michael Mann, Judith Butler, Amitav Ghosh, Noam Chomsky, Naomi Oreskes, and Ruth Wilson Gilmore.
- TIAA/Nuveen is one of the largest institutional investors of farmland and timberland in the world. As of Dec. 31st 2021, Nuveen Natural Capital had $10.5 billion of land-based assets under management and 3 million acres across 600 properties in ten countries, including over 1 million acres in Brazil and nearly 600,000 acres in the US. Nuveen’s investments in Brazil have been linked to landgrabbing, deforestation, and the illegal use of shell companies.
- TIAA/Nuveen’s fossil fuel investments were analyzed with the assistance of University College Dublin School of Business, using the Coal Exist List and Oil & Gas Exit List; and the Institute for Energy Economics and Financial Analysis (IEEFA) – their full analysis is available here.
- TIAA/Nuveen’s equity funds were analyzed using the Fossil Free Funds database.