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This report analyses the sustainability and financial risks of the farmland investment funds of the Teachers Insurance and Annuity Association of America (TIAA, formerly TIAA-CREF) in Brazil. Such risks are most prevalent in Matopiba, Brazil’s newest soy frontier, consisting of part of the states of Maranhão, Tocantins, Piauí and Bahia. TIAA farmland investments operate through various companies, such as Radar and its subsidiaries, that acquire and manage properties. CRR’s sustainability analysis shows that deforestation and fires have taken place on TIAA’s farmland portfolio, enabling negative social impacts on local communities.

Download the PDF here: TIAA’s Farmland Funds Linked to Fires, Conflicts and Legacy Deforestation Risks in Brazil

Key Findings:

  • Radar is part of a complex web of companies through which TIAA invests in Brazilian farmland assets. TIAA has been accused of using complicated corporate structures to circumvent legal restrictions on foreign land ownership. Farmland acquisitions are funded through investment vehicles financed by 20 different institutional investors.
  • Despite a recent increase in transparency, the land portfolio in TIAA’s investment vehicles remains unclear. TIAA’s asset manager, Nuveen, maintains a public map with farmland holdings. However, Nuveen’s information does not fully match public ownership records.
  • Between 2009 and 2018, a total of 2,970 ha were cleared on six TIAA portfolio farms in Matopiba. In August 2019, fires burned 2,350 ha on three farms. While pre-2018 deforestation is not in violation of Nuveen’s zero-deforestation policy, Nuveen may not be able to sell properties with post-2009 clearing to any counterparty with a similar or stricter zero-deforestation policy.
  • Radar properties may be linked to land-grabbing and conflicts with local communities in Matopiba. At least 22,834 ha on six of Radar’s properties were bought from companies linked to Euclides de Carli. The Brazilian Public Prosecutors Ministry is investigating De Carli’s land acquisitions and has suspended the titles of 124,000 ha in Piauí and Maranhão.
  • Value loss in Radar’s portfolio in Matopiba could amount to USD 192 million. Although this amount represents 23 percent of Radar’s assets, the loss would total only 0.6 percent of Nuveen’s global farmland fund and portfolio and 0.07 percent of Cosan’s enterprise value.
  • The lack of transparency may put investors in conflict with their climate change policies and lead to reputation risks. Lenders include BNP Paribas, Santander, Rabobank and HSBC; farmland fund participants with policies include AP2, Caisse de depot and ABP.

For more, please visit chainreactionresearch.com.