ImpactAlpha, Oct. 4 – The $1 trillion asset-management arm of TIAA is the world’s largest farmland owner and an increasingly visible impact investor. “You cannot be in farmland and not look at water conservation,” Advani said at this week’s GIIN investor forum. “You cannot buy Nike stock, or Volkswagen or Exxon or IBM, without looking at governance, the environment and sustainability.”
The Mumbai-born CEO, who spent two decades at Franklin Templeton Investments, has committed Nuveen to align its entire portfolio with the Principles for Responsible Investment by the end of 2020, from about $650 billion now. About $30 billion is in environmental, social and governance, or ESG, products and $5 billion in impact investments. The firm invested in the Seychelles’ $15 million “blue bond” last year and International Finance Corp.’s $152-million forests bond in 2016. Nuveen produces about one-quarter of all of Napa Valley’s wine and owns 1.9 million acres of farmland, including more than 700,000 acres in Brazil.
The vast holdings and lofty rhetoric are bringing added scrutiny. Last year, Nuveen adopted a zero-deforestation policy for its current and future assets in Brazil, but a report last year said earlier purchases may have contributed to deforestation and land grabs. Nearly half of the institutional mandates Nuveen competes for require an accounting for the firm’s ESG performance.
“Impact investors, including Nuveen, are seeking to make a difference while earning competitive returns,” Advani said upon joining the GIIN’s board last month. Environmental and social considerations are being absorbed into the financial mainstream, he said this week. “I’m an optimist that the arrow has left the bow.”