The $280 billion insurance investment account supports the flagship TIAA Traditional annuity.
As well as seeking to reduce the carbon footprint of its investments and balance any remaining emissions with investments that remove carbon, the General Account will increasingly seek out investments in climate solutions, such as holdings in renewable energy.
TIAA president and chief executive Thasunda Brown Duckett commented: “We believe climate risk is an investment risk that we must manage over time, so this pledge is an affirmation of our responsibility to achieve the best possible investment outcomes for our clients.
“As an active manager of a diversified investment account, we will get to net zero over time through investment selection, portfolio repositioning and continued engagement with companies and carbon producers to reduce emissions around the world.”
The company will implement five-year interim targets in the lead-up to 2050, with the first target set for 2025. The scope and level of each interim target will be tied to a variety of factors, including climate data availability, results of ongoing climate scenario analyses and market conditions.
TIAA has also signalled plans to release a climate report later in the year, with more detail on how the General Account anticipates achieving net-zero carbon.
Nick Liolis, chief investment officer of the General Account added: “We are making this important change to create a resilient portfolio that will perform better over the long run to meet our obligations to retirement investors, which extend into perpetuity.
“We believe that this new target and strengthened commitment to responsible investing will help us drive better results and reduce risk.”
TIAA’s third-party investment manager, Nuveen, manages its portfolios in accordance with the UN Principles for Responsible Investment (PRI), incorporating ESG factors.
In April, Nuveen Real Estate declared that every holding in its $133 billion portfolio would be operationally net-zero carbon by 2040.
Amy O’Brien, head of responsible investing at Nuveen, commented: “Engagement will remain a critical tool that supports the General Account’s efforts as we continue to press carbon-intensive companies and individual assets to align with the goals of the Paris Agreement.”
