Nuveen, a global asset manager, began it’s responsible investing (“RI”) journey in 1970 when clients asked them to engage on product safety and social issues. In 2020, Nuveen asked me to join their RI Leadership Council, representing an elite group of professionals identified as thought leaders who come together to share perspectives on RI developments, market opportunities, and ideas to better investor outcomes and the overall RI industry. Recently, Nuveen hosted our second formal meeting, and the most significant takeaway for me pertained to Nuveen’s stewardship report. Given RI is a core tenant across the firm, Nuveen proactively engages with portfolio companies to enhance the RI industry as a whole. Before Nuveen evaluates a portfolio company, it considers the company’s level of maturity about its unique RI journey. For example, a company just beginning its RI journey would primarily focus on reporting on environmental, social, and governance (“ESG”) issues. For this company, Nuveen would concentrate on evaluating this company’s transparency, or disclosure of ESG-related issues, such as climate risk. Over time, as a company fine-tunes its ESG reporting capabilities, then Nuveen would add a layer of assessing a company’s accountability in addition to transparency. For instance, a company launches an initiative focused on its workforce demographics, demonstrating a desire to incorporate ESG into business strategy and culture. As more time passes and a company’s ESG evolution continues, Nuveen would measure a mature ESG company’s impact in addition to this company’s transparency and accountability, as outlined above. When it comes to impact, an example would be a company that demonstrates it intentionally reduced its carbon emissions in alignment with a commitment to do so. In summary, Nuveen’s stewardship report has three focus areas: transparency, accountability, and impact. Nuveen evaluates each portfolio company across one, two, or three categories depending on where each company currently stands on its unique ESG journey. Ultimately, Nuveen’s expectation is for all companies to move beyond disclosure to build ESG into all aspects of the business intentionally.
