2021 Nuveen Investments Delivered Quantifiable Impact for Environment and Community Well-Being
Nuveen Asset Management holds the ELCA retirement plans’ two largest social impact first (SIF) fixed income portfolios — a combined $50 million through green bond and community and economic development bond portfolios — and recently reported positive outcomes achieved in 2021. This impact report represents the first year Nuveen is also reporting on Portico’s participation in its community and economic development bond portfolio, an investment Portico made in 2021.
ELCA retirement plan members invest in social purpose funds for two kinds of returns: financial returns and regular reports quantifying the positive social impact created. The infographics below describe 2021 results. Retirement plan members invested in Portico’s social purpose funds can review the positive impact their retirement savings are helping to create, ranging from clean energy alternatives and protecting the environment, to affordable housing and building a more sustainable economy.
“2021 represented a significant increase globally in the amount of money entering new socially responsible bonds, exceeding $1 trillion for the first time, making it twice the size of the U.S. commercial mortgage market,” said Erin Ripperger, Portico’s manager of socially responsible investing and investor advocacy. “This increasing desire among investors to participate in the social impact bond market has unlocked further opportunities to drive positive change, while also generating competitive returns.
Over the last few years, there’s been increasing focus on housing costs and energy sustainability, and what is or isn’t being done to open more low-income housing opportunities or fund alternative energy projects. The results in the Nuveen report shed light on some incredible work being done through these investments from participating ELCA retirement plan members, in the name of caring for our neighbors and our world.”
2021 Renewable Energy & Climate Change Impact
The following describes impact created by Portico and other participating investors investing in renewable energy projects including solar, wind, and small-scale hydroelectric; smart grid and other projects designed to make power generation and transmission systems more efficient; and energy efficiency projects that reduce greenhouse gas emissions.
Avoided 130.6 million metric tons of CO2-equivalent emissions
Equivalent to the annual emissions from 35 coal-fired power plants
Saved 4.3 billion kilowatts
Equivalent to energy used by 599,721 homes for a year
Added 3,934 megawatts of new renewable energy capacity
Equivalent to the output of 1,311 large wind turbines
Generated 36.9 million megawatt-hours annualized of renewable energy
Equivalent to powering 3.1 million homes for one year
2021 Natural Resource Impact
The following describes impact created by Portico and other participating investors investing in land conservation and sustainable forestry, fishing, and agriculture; certified green buildings; remediation and redevelopment of polluted or contaminated sites; improvement of clean drinking water supplies, sewer systems infrastructure, and waste management projects.
Constructed 31 LEED*-certified buildings
Conserved 670,997 acres of land
Roughly equivalent to three times the size of New York City
Supported 2 million people with clean water and wastewater projects
Roughly equivalent to the population of Nebraska
Delivered 44 million gallons of water per day
Saved 179.2 billion gallons of water
Equivalent to 1.4 times the amount of water in Lake Erie
Investment Spotlight: Key Player in North American Tire Recycling
Liberty Tire Recycling is the largest receiver of used tires in North America, taking in more than the number heading to landfills. The company has a mission to find new and better ways to reclaim, recycle, and reuse scrap tires — which can replace virgin materials in the creation of innovative, eco-friendly products.
Tire recycling is one of the United States’ most important and unheralded environmental success stories. In 1990, there were an estimated one billion scrap tires stockpiled in the country, filling up landfill space and creating toxic fire risk nationwide. Through government and industrial efforts to develop beneficial reuse markets for used tires, that number has dwindled to 56 million in 2019, a 94% reduction.
Still, North America produces approximately 500 million used tires annually and Liberty Tire diverts 190 million of them from the waste stream. The company evaluates used tires for reuse — sold as a used tire, processed into crumb rubber and mulch, stripped of wire for steel mill scrap, or converted to tire-derived fuel.
2021 Affordable Housing Impact
The following describes impact created by Portico and other participating investors investing in low-and moderate-income housing loans, transit-oriented development, walkable communities, and mixed-use development projects.
Guaranteed or provided 3.2 million affordable mortgages
Roughly equivalent to the number of housing units in Denmark
Built or supported 138,332 housing units, including those designated for low- to moderate-income residents
2021 Community & Economic Development Impact
The following describes impact created by Portico and other participating investors investing in benefits for underserved and/or economically disadvantaged communities; financial, hospital and medical, and educational services; urban revitalization efforts including the creation of community centers and reconstruction activities; and international development and humanitarian activities like disaster relief, economic aid, and agricultural support.
Created 1.8 million full-time jobs
Trained 1.1 million farmers
Benefitted 117.2 million people with access to basic products and services
Equivalent to 35% of the U.S. population
Reached 298.6 million people through community programs
Equivalent to 90% of the U.S. population
Investment Spotlight: New Bond to Serve 450,000 Women and Girls in Southeast Asia
The Women’s Livelihood Bond 4 (WLB4) provides capital to lenders and enterprises with workforces who are largely women — who in turn provide low-cost capital and financing to other women. The bond’s mission is to help transition women in Southeast Asia from subsistence to sustainable livelihoods and to provide these women with access to credit, market linkages, and affordable goods and services.
For WLB4, proceeds will be distributed to 10 borrowers in four countries — India, Cambodia, Indonesia, and the Philippines — that operate in six sectors: microfinance, small- and medium-enterprise lending, agriculture lending, clean and affordable energy, mobility lending, and skills development. The proceeds are anticipated to impact approximately 450,000 women and girls. For example, in the Philippines these loans empower women to purchase clean cook stoves that reduce carbon footprint while improving respiratory health.
Background
Portico’s Investments in Nuveen
Nuveen is recognized as a long-time leader in the green bond and community and economic development bond spaces.
In 2017, Portico invested $25 million in a Nuveen Green Bond strategy. A green bond is like a regular bond with one key difference — the money raised by the issuer is earmarked to finance environment-friendly investments and business activities. Nuveen green bonds are designed to deliver solid returns while reducing greenhouse gas emissions and preserving natural resources.
Pleased with Nuveen’s performance, Portico invested another $25 million in Nuveen’s Community & Economic Development (CED) bond portfolio through its social purpose funds in 2021. This investment is designed to foster affordable housing and economic development in communities of need while creating positive financial returns.
Social Impact First (SIF) Investments
To help achieve measurable social impact, Portico employs a form of positive social investing called social impact first (SIF) in 14 of its 15 social purpose funds** (Portico Stock Index Social Purpose Fund excluded). SIF investments can represent up to 10% of a social purpose fund’s assets. With the inclusion of the CED bond, the Nuveen investments bring overall SIF investments — in the environment, human rights, and community and economic development across 14 of Portico’s 15 social purpose funds — to nearly 8%, much closer to the 10% limit.
SIF investments can accept a somewhat lower projected financial return and/or somewhat higher projected risk on up to 10% of the fund’s investments in order to invest in companies and organizations that support initiatives like affordable housing, community and economic development, reduced greenhouse emissions, and renewable energy. ELCA retirement plan members have the option to invest a portion, or all, of their account in Portico’s social purpose funds.
For more information about all funds managed by Portico Benefit Services, please see Portico’s Investment Fund Descriptions.
*Leadership in Energy and Environmental Design (LEED) is an internationally recognized green building certification system.
**The ELCA social purpose balanced funds were replaced by Portico social purpose target date funds (TDFs) in October 2020. Because these target date funds were created from Portico’s existing investment pools, all social purpose TDF investors remain participants in these Nuveen investments.
Information regarding Portico funds should not be considered as advice or as a recommendation to hold, purchase, or sell those financial products and does not take into account your particular investment objectives, financial situation, or needs. For more information about all funds managed by Portico Benefit Services, please see the Investment Fund Descriptions for your retirement plan on the Fund Performance page of myPortico and speak with your tax, legal, or financial professional.
Members should carefully consider the target asset allocations, investment objectives, risks, charges, and expenses of any fund before investing in it. All funds, including the Portico funds, are subject to risk and uncertainty. Past performance is no guarantee of future performance. Funds managed by Portico Benefit Services, including the Portico funds and ELCA Participating Annuity Investment Fund, are not insured or guaranteed by the Federal Deposit Insurance Corporation, any other government agency, or the ELCA. Fund assets are invested in multiple sectors of the market. Sectors, like funds, may perform below expectations and lose money over short or extended periods. Review the Portico Investment Fund Descriptions and the Investment Memorandum for the ELCA Participating Annuity Trust for more information about the Portico funds.
Target date funds are designed for members expecting to retire around the year indicated in each fund’s name. When choosing a fund, members should consider whether they anticipate retiring significantly earlier or later than age 65, and select the target date fund that aligns with their expected retirement age. There are many considerations relevant to fund selection; members should choose the fund that best meets their individual circumstances and investment goals. Each fund’s asset allocation strategy becomes increasingly more conservative as it approaches the target date and beyond. Each fund’s investment risk changes over time as its asset allocation changes. The investment process used by the investment managers and the target asset allocation of the funds may change at any time, without notice.
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