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TIAA-CREF Says One Thing and Does Another: Corporate Social Responsibility Leader Falls Short

Submitted by: Make TIAA-CREF Ethical Coalition

Categories: Business Ethics, Corporate Social Responsibility

Posted: Feb 17, 2009 – 10:59 PM EST

 

- February 17, 2009 - Educational pension giant TIAA-CREF regularly touts its achievements in providing "financial services for the greater good." Yet it continues to fail on the most important way it can contribute to corporate social responsibility: changing the abusive behavior of industry leaders and of corporate contributors to the genocide in Sudan.

The Make TIAA-CREF Ethical Coalition* lobbied until TIAA-CREF agreed to engage its portfolio companies on issues of social responsibility. They agreed to talk to two of the Coalition's five target companies, Coca-Cola and Wal-Mart. However, years of talking has had little if any effect on their policies. Due to the actions of Coca-Cola, Wal-Mart, and Nike, people continue to suffer daily: workers in sweatshops, union leaders facing intimidation or death in Columbia, and people drinking polluted water. Waiting for years for possible change to come from "quiet diplomacy" is no longer an option.

Changes in Wal-Mart's environmental practices were prompted by the aggressive work of activist groups, asserted a January 24, 2009 article in the New York Times. Likewise, the very limited changes made by Coca-Cola were likely the result of aggressive actions taken by our Coalition group member, Campaign to Stop Killer Coke.

In 2007, resolutions were passed by the 600,000 member New York State United Teachers and 1.4 million member American Federation of Teachers critical of TIAA-CREF's continued investment in Nike, Coca-Cola, and Wal-Mart. They asked TIAA-CREF to hold these and other companies accountable on labor issues.

TIAA-CREF says it has no plans to move beyond dialogue with these companies. At the same time it asserts:

  • "While quiet diplomacy remains our core strategy,..., TIAA-CREF's engagement program involves many different activities and initiatives, including…engaging in public dialogue and commentary,...engaging in collective action with other investors,...seeking regulatory or legislative relief,...commencing or supporting litigation." (TIAA-CREF Policy Statement on Corporate Governance)
  • "...engagement is a multi-step process...;TIAA-CREF believes that we should explore the ways in which to influence the companies' behavior and thereby help bring about positive social change;" we "sometimes threaten tougher actions." "...we also advise some companies that we will explore escalated tactics...if they remain unresponsive." (TIAA-CREF press releases)


  • "Where necessary, we file shareholder resolutions or employ other methods to promote constructive dialogue." ("Socially Responsible Investment at TIAA-CREF")
At TIAA-CREF's annual meeting last July, CEO Roger Ferguson claimed to understand the concerns of our Coalition and promised to look over our requests. Coalition representatives met with Mr. Ferguson in early December, but the group is still waiting to see that concern translate into meaningful actions that reflect TIAA-CREF's policy and published statements. If TIAA-CREF officers directly observed these horrendous conditions themselves for one day, they would act differently and get tougher with these companies.

The Make TIAA-CREF Ethical coalition has worked hard to provide TIAA-CREF with a theoretical framework, practical suggestions, and experts on each company in order for them to move forward as we suggest:
  1. We have requested that TIAA-CREF create an individualized action plan for each company: If just talking works, fine, but if not, use tougher tactics on issues where companies resist, and then divest if all else fails. TIAA-CREF says it will a lose a voice if it divests. But if dialogue fails to influence a company, why not make a statement by pulling out and promising to reinvest if the company changes.
  2. We have provided TIAA-CREF with lists of specific ways it can apply its stated tactics to our companies of concern. Our experts are ready to collaborate with them to monitor and influence company practices:

    • Al Norman (director of Sprawl-Busters), called "the guru of the anti-Wal-Mart movement" by 60 Minutes

    • Jim Keady (founder of the international coalition Team Sweat), who has investigated Nike factories in Indonesia and written extensively on Nike

    • Ray Rogers (director of Campaign to stop Killer Coke), who has led many successful labor efforts

  3. We have told TIAA-CREF that it need not go it alone. There are groups, some of them members of our Coalition, that have successfully taken on these companies. The credibility and influence of TIAA-CREF can add much to these efforts.
Make TIAA-CREF Ethical coordinator Neil Wollman, Senior Fellow at Bentley University, says that "TIAA-CREF has come a long way in its own corporate social responsibility practices: a socially responsible fund and investment in microfinance and community development. Now it's time for it to become a national leader by getting corporate giants it invests in to do the same. That will likely prompt industry-wide reforms."


* Make TIAA-CREF Ethical Coalition includes: Corporate Accountability International (formerly Infact), World Bank Bonds Boycott, Press for Change, Social Choice for Social Change, Canadian Committee To Combat Crimes Against Humanity (CCCCH) , Citizens Coalition (Frente Civico), Educating for Justice, National Community Reinvestment Coalition, Campaign to Stop Killer Coke/Corporate Campaign, Inc., Campaign for a Commercial-Free Childhood, and Sprawl-Busters.


Investors Against Genocide and TIAA-CREF

Investors Against Genocide is asking TIAA-CREF to make a commitment to genocide-free investing. That would require TIAA-CREF to divest from those companies supporting the regime in Sudan. TIAA-CREF has dialogued with the worst company, PetroChina, for years with no results to show for it. Again, why doesn't TIAA-CREF follow the escalation pattern we suggest for companies it engages? Where talking has worked, great. Where it has not, escalate financially.

However, not only has TIAA-CREF refused to divest, they've refused to put a freeze on new purchases. TIAA-CREF has actually upped its investment in PetroChina and other problem companies, at the same time that it acknowledges those companies' problems. What kind of strategy is that?

TIAA-CREF shareholders will have a chance to vote on the issue when shareholder proposals for genocide-free investing are on the ballot in June for the shareholder meeting in July. Shareholder votes on the issue can establish healthier investment rules for TIAA-CREF. 

Read more at www.InvestorsAgainstGenocide.org.

For more information, please contact:

Neil Wollman; Ph. D. Bentley Alliance for Ethics and Social Responsibility; Bentley University
Phone: 260-568-0116

 

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