PRI accountability mechanism fails, enables greenwashing by trillion dollar pension fund
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.
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.
“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.”
– Caroline Levine, Ryan Professor of the Humanities at Cornell University and a TIAA-Divest coordinating committee member
“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.”
– Bill McKibben, author, climate expert, Schumann Distinguished Scholar at Middlebury College, TIAA client and complaint signatory
“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.”
– Hana Heineken, Senior Attorney at the Center for International Environmental Law (CIEL), who assisted in the filing of the complaint