2020 Proxy Season Will See Heightened Focus On Environmental and Social Factors Amid Regulatory, Market and Economic Uncertainty

Nuveen’s 2020 Proxy Season Preview predicts that a broader range of stakeholders will demand corporate action on climate change, gender parity and workforce diversity

NEW YORK--(BUSINESS WIRE)--Nuveen, a leading global investment manager and subsidiary of TIAA, released its 2020 Proxy Season Preview, which predicts that corporations failing to adequately address environmental and social issues will face intense scrutiny from shareholders during the 2020 proxy season. Climate change, board diversity, human capital management and compensation issues will dominate investors’ top priorities.

“Amid unprecedented market uncertainty and the COVID-19 pandemic, driving positive outcomes at the companies in which we invest, through our proxy voting and our environmental, social and governance engagement work is more important than ever to help mitigate risk and bolster value for our clients,” said Amy O’Brien, global head of responsible investing at Nuveen. “We believe 2020 will see the awakening of a broad swath of investors highly attuned to the relationship between a company’s financial performance and how effectively it manages these issues.”

Nuveen manages assets, including voting on proxy issues, on behalf of its clients and TIAA and implements TIAA’s Policy on Responsible Investing.

“This year’s proxy season will test companies’ ability to handle a significant crisis,” added Peter Reali, head of engagement at Nuveen. “We expect companies that prioritize strong corporate governance and conviction on environmental, social and governance-related issues will be better positioned to preserve long-term value for their shareholders.”

Backed by Nuveen’s deep expertise in responsible investing leadership and its approach to proxy voting, the firm’s proxy season preview outlines five key trends to watch in 2020:

1. Environmental and Social Topics are Investor Hot Buttons: The number of environmental and social proposals, and support for them, is likely to hit an all-time high for the fourth consecutive year. Already, these proposals account for 66 percent of all submitted proposals in 2020. Similar to 2019, political contributions and lobbying proposals, and climate change-related proposals, are expected to dominate in light of the 2020 U.S. elections and growing environmental concerns worldwide.
2. Shareholders Will Expect Action on Climate Change: Once focused on disclosure around corporate sustainability, environmental shareholder proposals now expect tangible action beyond just disclosure, such as measurable carbon reduction goals – aligning with the Paris Agreement on climate change. To date, 77 percent of environmental shareholder proposals filed in 2020 focus on climate change versus other environmental stewardship topics, and 66 percent request action rather than just disclosure.
3. Stakeholders Will Seek Transparency on Gender Parity and Workplace Diversity: Now that every company in the S&P 500 has at least one female board member, the focus will shift toward ensuring other under-represented groups have a seat at the table, especially in board leadership positions. Companies today recognize that workforce diversity, equal pay for equal work, and inclusive workplace cultures are a key competitive strength, which will likely spark an increase in proposals requesting transparency on pay equity, as well as goals for promoting, recruiting and retaining minority employees.
4. Executives Should Expect the Integration of Environmental and Social Metrics into Compensation: Shareholders recognize they have the power to link environmental and social measures and objectives to executive pay, creating an opportunity to align incentive pay with these business strategies. While these topics will not dominate the 2020 proxy season, it is an emerging trend poised to gain traction over time, with a few prominent companies already in receipt of proposals targeting this objective in 2020.
5. Regulatory Changes Will Create Hurdles Making the Future of Environmental and Social Proposals Uncertain: Regulatory changes recently proposed by the Securities and Exchange Commission (SEC) will create new impediments for environmental and social proposals in the long term. Although the SEC’s proposed changes will not go into effect in the 2020 proxy season, the amendments create an environment of uncertainty around important shareholder rights that will restrict shareholders’ ability to meaningfully engage with company management.

Nuveen’s 2020 Proxy Season Preview is available HERE. For more information about Responsible Investing, visit www.nuveen.com/en-us/thinking/responsible-investing.

About TIAA

With an award-winning¹ track record for consistent investment performance, TIAA (TIAA.org) is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $1.1 trillion in assets under management (as of 12/31/2019²) and offers a wide range of financial solutions, including investing, banking, advice and education, and retirement services.

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 $1.1 trillion in assets under management as of 31 December 2019 and operations in 24 countries. Its investment specialists 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 Awarded Refinitiv Lipper 2020 Best Mixed Assets Large Fund Company United States among 30 mutual fund families. The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. Lipper Fund Awards from Refinitiv, ©2020 Refinitiv. All rights reserved. Used under license. The Award is based on a review of risk-adjusted performance of 39 companies for 2016, 36 for 2017, 35 for 2018 & 2019, and 30 for 2020. The award pertains only to the TIAA-CREF mutual funds in the mixed-asset category. Without such waivers ratings could be lower. Past performance does not guarantee future results. For current performance, rankings and prospectuses, please visit TIAA.org. 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. TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products.

² Based on $1.1 trillion of assets under management across Nuveen Investments affiliates and TIAA investment management teams as of 12/31/19.

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