Financial services firm TIAA faces academic backlash over energy holdings

By Ross Kerber

(Reuters) – Climate-minded academics called on a United Nations-backed group to sanction financial services firm TIAA unless it improves its environmental record, highlighting the divide between nonprofits moving away from fossil fuels and big investors sticking with oil and gas stocks.

Known for handling university professors’ retirement money, TIAA and its Nuveen asset-management arm have some $78 billion invested in fossil fuels out of total assets of $1.2 trillion, according to a complaint that activists plan to file on Wednesday with the U.N.-backed Principles for Responsible Investment.

London-based PRI’s network of more than 5,000 signatories including Nuveen agree to take steps like urging portfolio companies to disclose more about carbon emissions or workforce diversity.

But TIAA and Nuveen’s holdings and their lack of pressure on portfolio companies to cut emissions clash with the views of many TIAA participants who helped convince their own institutional endowments to divest from oil or gas stocks, said Hana Heineken (OTC:), senior attorney at the Center for International Environmental Law.

She helped draft the complaint to the PRI, signed by some 280 people, calling for steps including the removal of TIAA’s Nuveen arm from the PRI unless the company takes actions like selling fossil fuel stocks or shares of companies engaged in deforestation.

“There’s a real dichotomy where the universities are taking a stand in support of divestment and yet the retirement account managers they’re employing aren’t at the same point,” Heineken said.

She noted Princeton University recently moved to dissociate its $38 billion endowment from fossil fuel companies.

A spokesperson for TIAA of New York said it has taken steps including asking portfolio companies to cut emissions.

“Large-scale divestments by simply selling fossil-fuel-generating investments to other companies won’t necessarily reduce carbon output,” said the spokesperson. Other PRI signatories have also declined to sell off energy stocks.

A PRI representative said it will review the complaint. In 2020 PRI delisted five asset managers. It has since reinstated one, BPE, the private banking arm of France’s La Banque Postale.

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