US pension giant TIAA-CREF attacked over Sudan engagement

TIAA–CREF, the giant $400bn (€314bn) US pension plan and investment fund group for US teachers and researchers, has come under fire from NGOs who accuse it of increasing its controversial equity holding in PetroChina while simultaneously lobbying the company to use its influence to challenge the Sudanese government over allegations of genocide in Darfur. Investors Against Genocide, which has been involved in similar campaigns against Fidelity, the US mutual fund manager, said TIAA–CREF had spent years in dialogue with PetroChina, which it said was “the worst company” for links to the Sudanese government, with no results to show – yet had recently increased its stake. The NGO said it believed TIAA–CREF should have a policy of engagement based on “escalation” to financial action such as divestment if the lobbying is not working. PetroChina’s signatory status to the UN Global Compact human and labour rights standards is a subject of controversy amongst campaigners who allege that CNPC, PetroChina’s parent company, is a major financer of the Sudanese government. Other large pension funds have set limits on the time they will engage for changewith PetroChina. Last year, PGGM, the €88bn ($127bn) Dutch pension investment giant, sold $37m of PetroChina shares after its own lobbying campaign failed to produce results. At the time, PGGM said: “CNPC has not taken adequate steps to avoid involvement in these human rights violations or to contribute to resolving human rights issues in that country.” TIAA–CREF owns approximately $18.5m of PetroChina shares. A spokeswoman for TIAA–CREF, one of the most active responsible investors in the US, said: “TIAA-CREF is very passionate about the issues in the Sudan and if the objective is either to divest or to make a difference we have chosen the latter. Our pressuring of these companies occurs regardless of the extent of our holdings. While our ownership of shares in the target companies fluctuates over time and may continue to do so, they comprise a very small percentage of our overall investment portfolios.” TIAA–CREF said it also engages with other European and Asian multinational companies with activities in Sudan, including Lundin Petroleum, Oil & Natural Gas Company, PETRONAS, and Sinopec. It said individuals wanting to avoid investing in these

companies could do so by investing in the screened CREF Social Choice Account or Social Choice Equity Mutual Fund. 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 andsocial fields, the CREF Social Choice fund, a $500m US mutual fund, and allocations made out of its sizeable in-house insurance assets. Since 2003, more than 200,000 people are estimated to have died as a result of the conflict in the Darfur region of Sudan where the government is accused of using militia death squads against its non-Arab population.