Responsible Investor

US Special: TIAA-CREF, head of the SRI class

Company plans new SRI strategy to add to microfinance, sustainable real estate and community banking.

Like all good academics, TIAA-CREF is busy preparing its next thesis to build on an impressive body of work on socially responsible investment. The subject is ingrained in its history. The organisation, set up almost 90 years ago by philanthropist Andrew Carnegie as a non-profit provider of low-cost retirement plans and insurance for teachers and researchers in the United States, is today a mixed pension and insurance fund with a financial services arm that runs third-party money. Combined assets are more than $435bn (€300bn). The company runs dedicated socially responsible investment across three core parts of its structure: the $9.19bn CREF Social choice account, a defined contribution fund available only to traditional member institutions in the higher-education, medical and social fields, the CREF Social Choice fund, a $500m US mutual fund, and allocations made out of its sizeable in-house insurance assets.
The insurance portion is where TIAA-CREF has been taking innovative steps in areas such as microfinance, social real estate and community banking. Amy O’Brien, TIAA-CREF’s director of social investing, says the group

will soon launch a new dedicated SRI investment strategy for assets within the insurance account, but that it is too early to give details. A move into clean tech investment could be a logical step for a company that has been at the forefront of environmental and social investing.
O’Brien says: “We are also looking at ways we can add elements to the CREF social choice fund because we see growing market interest in specialist products.” Within the insurance segment, TIAA-CREF’s programmes represent what O’Brien calls a “win-win” policy: “Our approach is the so-called double-bottom line: financial returns comparable with what is in the market, allied to social commitment.” Importantly, the approach has the backing of clients. In February 2006, the group conducted telephone interviews with 501 investors in the CREF Social Choice Account (SCA) and 501 non-SRI participants. Of the non-SCA participants, 67% said shareholder activism was important, with 65% giving the same support to social screening and 66% to community investing. O’Brien says: “The kind of people we serve

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