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July 26, 2011
TIAA-CREF Publishes 2011 Socially Responsible Investing Annual Report
    by Robert Kropp

The report describes the accomplishments of the $470 billion financial services company in promoting sustainable investment according to environmental, social, and corporate governance (ESG) criteria.


The publication this month by the Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF) of its 2011 Socially Responsible Investing Annual Report comes at a time of notable accomplishments for the $470 billion financial services company.

This year marks the 20th anniversary of the launch of the company's CREF Social Choice Account, which invests in companies that meet environmental, social, and corporate governance (ESG) criteria. During the years of its existence, the Account's methodology has evolved from exclusionary screens to the incorporation of criteria such as "environmental stewardship, labor and human rights, and supply chain responsibility," according the report.

The Social Choice Account has grown to more than $10 million in assets under management, reflecting the growth in the US of sustainable investment in general. Citing the 2010 Trends Report by the Forum for Sustainable and Responsible Investment (US SIF), TIAA-CREF reported that sustainable assets in the US have reached more than $3 trillion, or nearly one out of every eight dollars under professional management. The amount represents a 34% increase since 2005, compared to an increase of three percent in the broader pool of professionally managed assets.

Also in 2011, TIAA-CREF joined with the Council of Institutional Investors (CII) and others in support of the proxy access rule included in Dodd-Frank. The Securities and Exchange Commission (SEC) rule on proxy access, which permits shareowners who have owned at least three percent of a company for at least three years to have their nominees for boards of directors included in corporate proxy materials, was targeted by a US Chamber of Commerce lawsuit, and last Friday the US Court of Appeals in Washington DC vacated the rule.

In 2010, TIAA-CREF published Responsible Investing and Corporate Governance: Lessons Learned from the Crises of the Last Decade. The report recommended that investors ensure that the interests of corporate boards of directors are aligned with those of long-term owners, and that investors emphasize a long-term orientation by companies in their portfolios.

On the environmental front, TIAA-CREF received the highest ranking of 46 mutual funds from Ceres for its votes in favor of shareowner proposals addressing climate change in 2010. TIAA-CREF was one of eight mutual funds that voted in favor of such proposals more than half the time.

To promote economic development in low-income areas often ignored by global financial institutions, TIAA-CREF established the Global Microfinance Investment Program (GMIP) in 2006. By 2010, the program had more than $800 million in investments and investment commitments. On the domestic front, TIAA-CREF's Community Bank Deposit Program, launched in 2007, now has more than $20 million deposited in five community banks to promote economic development in low-income neighborhoods.

 

 
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