NEW YORK--(BUSINESS WIRE)--Nuveen, a leading global investment manager, released a report detailing strategies for managing the risks of climate change to long-term investment strategies across asset classes.
In Addressing Climate Change Can Help Add Alpha and Manage Risk, experts from a range of disciplines share insights on the importance of adapting to a low-carbon economy and mitigating the costs associated with the increasingly perilous impact of climate change.
“For investors, climate change poses both risks and opportunities,” said Jose Minaya, President of Nuveen Global Investments. “Based on what we’ve learned over the past 50 years as a leader in responsible investing, we believe it’s possible for investors to manage the risks to their investments from the negative effects of climate risk while capitalizing on related opportunities that will help them stay on track to meet their long-term financial goals.”
Financial institutions and leaders share an important duty to identify and counteract the potential impact of climate change on the global economy and financial well-being of investors. Increasingly, reports Nuveen, it will be critical to look at investments through the lens of climate change in order to mitigate negative impact and seek optimal portfolio performance.
“Climate change represents a defining issue for the investor community. The realities we’re experiencing have strengthened our resolve to keep it at the forefront of our investment policies, strategies and practices every day,” said Amy O’Brien, Global Head of Responsible Investing at Nuveen. “As the world convenes to discuss global issues during Climate Week and the UN General Assembly, we remind investors to focus on the value of understanding how this long-standing issue is transforming markets, policy and our financial well-being as investors.”
In its white paper, Nuveen highlights four asset classes presenting opportunities for investors to climate-proof their portfolio while optimizing long-term gains:
- Equities – Reduce risk and improve alpha: Climate-attuned portfolios have the potential to outperform amid tighter regulations, faster technological changes and more frequent catastrophic weather events.
- Fixed-income – The “double bottom line”: As the third largest investor in labeled green bonds – and largest in U.S. dollar denominated issues – globally, Nuveen expects to see an expansion of investment opportunities that meets their financial and environmental objectives of competitive total returns, outperformance potential, and demonstrable climate-aligned outcomes.
- Real Assets/Natural Resources – Deforestation vis-à-vis climate change and farmland: Managing agricultural assets with climate change in mind is better for the planet and for long-term investors. One key threat to agriculture, and the planet at large, is deforestation, which creates about 15% of CO2 emissions globally1.
- Real Estate – Introducing “net zero buildings,” the future of real estate: “Net zero carbon” buildings may be easier to sell, more attractive to tenants and less vulnerable to obsolescence – these properties provide “future proof” investments opportunities that seek the best returns.
With nearly five decades of responsible investing leadership, Nuveen is committed to applying principles of environmental, social and governance responsibility across the asset classes it manages to champion and advance better outcomes for investors, communities and the environment. With one of the industry’s largest responsible investment teams including more than 20 dedicated experts, along with a comprehensive offering of ESG mutual funds and ETFs, Nuveen continues to play an active role at the forefront of socially responsible innovation and impact.
To download the full report and access a series of video interviews with Nuveen’s asset class experts about the impact of climate change risk on investments, visit www.nuveen.com/NuveenKnowsRI.
A comprehensive overview of Nuveen’s Responsible Investing initiatives is presented in its 2018 Responsible Investing Summary Report.
About Nuveen
Nuveen, the investment manager of TIAA, offers a comprehensive range of outcome-focused investment solutions designed to secure the long-term financial goals of institutional and individual investors. Nuveen has $973 billion in assets under management as of 6/30/18 and operations in 16 countries. Its affiliates offer deep expertise across a comprehensive range of traditional and alternative investments through a wide array of vehicles and customized strategies. For more information, please visit www.nuveen.com.
1. Nuveen Knows Responsible Investing Addressing Climate Change Can Help Add Alpha and Manage Risk, September 2018
An investment which includes only holdings deemed consistent with the applicable Environmental Social Governance (ESG) guidelines may result in available investments that are more limited than other investments that do not apply such guidelines. ESG criteria risk is the risk that because the criteria excludes securities of certain issuers for nonfinancial reasons, an investment may forgo some market opportunities available to investments that don’t use these criteria.
The investment advisory services, strategies and expertise of TIAA Investments, a division of Nuveen, are provided by Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC. Securities offered through Nuveen Securities, LLC, member FINRA and SIPC.
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