Nuveen mulls change to sustainability reporting

‘You shouldn’t be surprised if soil health comes into the KPI process,’ says the firm’s head of sustainability.

Nuveen head of sustainability Sanaz Raczynski says the firm’s approach to communicating progress on soil health initiatives could change next year.

The firm’s reporting practices were criticised by the Soil Wealth: Investing in Regenerative Agriculture Across Asset Classes report, which said Nuveen’s sustainability report should include details from its soil health tests as well as whether the tests took place.

Nuveen reported progress towards a KPI defined by the percentage of the firm’s total acreage that undergoes soil testing at least every four years, but did not include the results of the tests.

“For an investor seeking to deploy capital into regenerative agriculture, one would naturally want to have KPIs about the results of those tests in addition to whether soil testing occurs,” the report’s authors wrote.

Raczynski told Agri Investor the KPIs in Nuveen’s annual sustainability report are not the whole of the firm’s approach to sustainability, which she said is a process of continuous improvement resulting from consultation with a variety of stakeholders.

Given there is no universally agreed framework, Nuveen chose to create its own KPIs as a starting point, which has been complemented by third-party certification bodies and adherence to issue-specific codes of conduct, Raczynski said.

“Just because something is not reflected as a KPI in our public documents doesn’t mean we don’t measure it,” Raczynski explained, adding that an ESG advisory committee comprised of investors in Nuveen’s funds already has access to more detailed information about farmland assets and strategy.

Raczynski noted that debate surrounding how best to measure and communicate progress on matters like soil health initiatives takes place in a broader context, where an increased focus on ESG across asset classes has encouraged LPs to ask more sophisticated questions.

Nuveen is currently in the process of updating its KPIs for the next edition of its sustainability report.

“You shouldn’t be surprised if soil health comes into the KPI process,” she said.

The Soil Wealth report compared Nuveen’s approach to soil quality reporting with that of Iroquois Valley Farmland REIT, an Illinois-headquartered vehicle focused on organic farmland. Iroquois uses third-party verification of its farms and has been recognised as a leader among verified B Corps in impact assessment.

“Although both are farmland investors, TIAA [of which Nuveen is an affiliate and manages its farmland investments] and Iroquois Valley seem to inhabit almost parallel universes, when it comes to reporting the social and environmental activity,” wrote the report’s authors.

Looking at agri investment more broadly, the report said real asset farmland funds should integrate regenerative agricultural practices more deeply, adopt more robust impact measurements and encourage an effort to monitor for weak or misleading claims.

With a market of 127 US-focused investment strategies managing $321.1 billion through strategies that explicitly integrate criteria for “sustainable” agriculture, a set of 70 strategies managing $47.5 billion include criteria associated with “regenerative” practices.

The report was sponsored by the USDA and drew on research from a coalition of 19 organisations, and was led by the Delta Institute, the Croatan Institute and the Organic Agricultural Revitalization Strategy.