Risk & Compliance

Tasting One’s Own Medicine

Pension fund giant TIAA- CREF has some shareholder problems of its own. It's agreeing to disagree.
George DonnellyMay 1, 2000

It’s a pension fund that makes companies flinch. Some may find it ironic, then, that the friend of shareholders, pension giant TIAA- CREF, has shareholder problems of its own.

The $280 billion fund has been nagged lately by a group of advocates for “socially positive” investing, who claim TIAA-CREF doesn’t do enough to reward companies with enlightened business policies. Although TIAA-CREF, after years of pressure, started a Social Choice Balanced Account in 1990 (assets: approximately $4 billion), critics say the fund only screens out perceived bad apples.

They want the fund to invest 5 to 10 percent of its assets in companies that are actively socially responsible, and a survey says that 81 percent of Social Choice Balanced Account participants endorse the active approach.

TIAA-CREF hasn’t budged, and it cut off communications with the group in March, making the fund seem a little like the cobbler whose children go barefoot. A TIAA-CREF spokesman, noting that advocates have had plenty of face time with senior management on the issue, says it was time to agree to disagree.