The fixed income impact investment team at Nuveen scooped two Environmental Finance IMPACT Awards, including the asset manager investment team of the year and fixed income fund of the year award for its $130 million TIAA-CREF Green Bond Fund.
The Nuveen team has been praised for its history of helping to bring one-of-a-kind sustainable fixed income deals to fruition, assisting in tackling the highly complex work of structuring and underwriting the transactions in the hope they can serve as a blueprint for future deals.
One IMPACT Awards judge said Nuveen remains a “standout” fixed income impact investor due to its ongoing innovation in the market.
Nuveen was praised by another judge for its role as one of the two anchor investors in the World Bank emission reduction-linked bond issued in February 2023 – which secured an Environmental Finance Impact Award in the Impact project/investment of the year – climate category.
The judge said the critical support – through the five-year old TIAA-CREF Green Bond Fund – for the $50 million World Bank outcome bond was “laudable,” and underlined their general appreciation of Nuveen’s impact investment activity.
The five-year World Bank emission reduction-linked bond uses the coupon payment to finance a project in Vietnam to manufacture and distribute ceramic water purification filters to school children. As the filters replace combustion of biomass to boil water, certified carbon credits are generated and sold to a contractual offtaker, with the proceeds distributed to investors as an alternative coupon.
Nuveen has backed numerous unique impact-focused sustainable fixed income instruments as a lead investor, including both the Barbados 'blue' debt-for-nature bond and World Bank 'rhino' bond in 2022.
Overall, Nuveen invests more than $8 billion in fixed income assets which align with one of its four public market impact themes: affordable housing, community & economic development, renewable energy & climate change, and natural resources.
The fixed income impact investment team – which includes Steve Liberatore, Jessica Zarzycki, Adam Guerino and Brian Donnegan as well as product specialist Alan Papier – was also recognised for its influential engagement activity with issuers.
In particular, Nuveen was praised for its work encouraging improved impact data quality from issuers. For example, engagement with US government-owned mortgage provider Fannie Mae resulted in it providing more granular instrument-level reporting data for its sustainable bonds.
The Nuveen team has also increased its engagement with the energy sector since June 2022. In particular, they have been advocating for energy firms to issue use-of-proceeds instruments – such as green bonds – and improving reporting transparency in order for them to increase the sources of capital these companies can draw on for their renewable energy operations.
Another IMPACT Awards judge said the impact data quality from Nuveen also “sets them apart,” with the asset manager increasingly looking to narrow the scope of its own impact data to only those activities financed by their investments.
As a result, in 2022, Nuveen said that more than three-fifths of its impact outcome data was from security-level data – its most preferred issuer disclosure, ahead of project-, programme- and issuer-level data. This allowed the asset manager to provide an increasingly high degree of granularity and transparency in its impact reporting.
“Four key areas highlight Nuveen’s leadership in fixed income impact investing: engagement with issuers, diversification of impact investments, innovation of impact structures, and our impact reporting,” Nuveen’s Zarzycki said.
“All four areas are critical to the success of impact investing and driving large-scale capital towards positive environmental and social outcomes. While we continue to drive innovations, our team remains anchored by our 2007 impact framework focused on direct use of proceeds and measurable impact outcomes.”
