In December 2023, TIAA published “Rising to the Challenge,” its latest annual climate report.
 
First, the good news. The company is clearly responding to our pressure to reduce its $78 billion in fossil fuels and its land-grabbing agribusiness. For the first time, TIAA claims that “our focus is squarely on leading our operations and steering our investment portfolios to address the challenge of climate change.” TIAA deserves some credit for actively decarbonizing its properties—TIAA’s own buildings as well its commercial real estate.
 
But there’s bad news too. There’s a lot of public relations rhetoric here and not a lot of substance. TIAA is not being transparent about its carbon exposure, and it’s not offering any details about how exactly the company plans to reduce its fossil fuel investments. For example, the report leaves out most of the company’s assets, focusing only on the General Account and Real Estate, which amount to about a quarter of its $1.3 trillion portfolio. What is happening with the other 75% of its assets?

In order to determine the credibility of TIAA’s climate commitments, it is crucial to have a full understanding of how TIAA manages its investments. In this respect, “Rising to the Challenge” raises many more questions than it answers. It offers only the haziest sense of the company’s methods, goals, specific investments, and progress.

When a group of organizations—TIAA-Divest!, Action Aid, and the Institute for Energy Economics and Financial Analysis—read it carefully, “Rising to the Challenge” prompted more than 100 specific questions, which we have sent to Amy O’Brien, Head of TIAA’s Global Responsible Investing. Although “transparency” is one of TIAA’s favorite words—appearing ten times in the report, we never received a response. 

Here are a few of the questions we asked:

  • When will TIAA publish a detailed list of their investments, so that the public can understand the portfolio’s current fossil fuel exposure and allow us to measure their progress?
  • What surveys, studies, and reports by third party sources and TIAA staff does TIAA use to guide its investment decisions? TIAA cites a survey of 100 portfolio companies, asking that they “disclose material climate-related information”. How were the 100 companies selected? Which companies participated? What information was requested? What were the replies? What is/was the consequence for not responding or responding in a misleading manner?
  • The report names TIAA’s four core “beliefs” about climate, but it is not clear whether the company believes that by providing capital to carbon-intensive industries TIAA is accelerating climate change. Is that in fact one of TIAA’s beliefs?
  • Do TIAA’s Net Zero targets include carbon credits from land grabbed from small farmers? Can TIAA provide the documentation for of all their carbon credit projects? For example, will Nuveen Natural Capital produce carbon credits for the market or offsets for TIAA on its million acres of land? 
  • How does TIAA calculate its emissions figures for its land and agribusiness investments? Do their figures show the full scope of the upstream and downstream emissions of the industrial food system they are helping to expand? How will the harms coming from loss of access to land for local communities and environmental damage of the current practices be addressed? What are the carbon plans over time for timber, permanent crops, and row cropping? Why doesn’t TIAA provide the exact locations on a satellite map of all of its farmland and its timberland?
  • Please explain why the TIAA-CREF Social Choice Low Carbon Equity Fund contains $6.72M in coal industry investments, $32.37M in oil & gas industry investments and $13.13M in fossil-fired utilities (per fossilfreefunds.org 1/13/24). What offerings with no fossil fuel exposure are available to the majority of your participants?
  • TIAA’s reported fossil fuel exposure includes fossil fuel reserve owners, companies directly operating in the production of oil, coal, and natural gas, or companies involved in fossil fuel value chain. Please explain why utilities/power generation were excluded. These sectors comprised 3% of the General Account according to the December 2022 VA-1 annual report (which does not include significant private investments such as TIAA’s 730 Power Development, LLC.
  • With respect to Public Corporate Debt, Please explain why scope 3 emissions are excluded. Please provide additional information on the unit by which carbon intensity will be measured. I.e. mt CO2e/ million USD sales. What is the logic behind the use of this formula this calculation? What is the scientific basis for using a metric that conflates real emissions with revenue? What is the policy rationale? And please explain how the formula works and accounts for various scenarios. For example, why should a high GHG emitter receive a pass for realizing a high level of sales? Eg. Exxon’s revenue in 2022 was $413.68B. Would its greenhouse emissions have been less harmful had prices been higher and its revenue exceeded $500B?