ScholarShare 529 has offered the Social Choice Equity Portfolio for nearly two decades. With the addition of 12 new portfolios that build upon the strength and popularity of the current offering, we stand out as a forward-thinking plan.


What is socially responsible investing?

Socially responsible investing is an investment strategy that considers certain environmental, social and governance (ESG) criteria as part of portfolio construction. It considers both investment rationales for the companies in a portfolio, and how those companies compare to their industry peers based on ESG metrics.


ScholarShare 529 choices

We offer ESG Enrollment Year Portfolios that include a mix of stocks, bonds and cash that become more conservative over time, as well as single-fund ESG portfolios like the Social Choice Equity, International Equity, and Bond. Your ESG investment options:


Answers to ESG questions

Read these articles to get your head around ESG investing.

A Socially Responsible Way to Save for College

Whether you’re a parent who cares deeply about the world around you or a savvy investor who seeks healthy returns, consider saving for college with sustainable investments.

What is sustainable investing?

Sustainable investing, also called ESG investing, includes environmental, social and governance (ESG) factors in the investment decision-making process. An ESG fund is comprised of companies that are known as ESG leaders, or that demonstrate best practices with regard to corporate ESG standards. Investors benefit from the long-term financial return potential, knowing that the investment process that specifically considers these societal factors aligns with their personal values.

This strategy of investing is increasingly popular due to demand from millennials who prefer to invest in companies with firm-wide policies that drive positive change and address growing concern over climate change and other social issues. Sustainable investing prioritizes companies that embrace sustainable principles, which can provide social and financial gains over the long-term.

How is ESG calculated?

While there are efforts to unify existing standards on ESG, scores are generally calculated by different companies using varying methodologies, and the way providers acquire data differs as well. That means there is no one authority on ESG scores. For example, some providers use data collected from company disclosures as well as government, academic and non-governmental organization (NGO) databases. Others use industry-specific questionnaires to gather data from participating companies. Either way, an investment’s sustainability score is typically evaluated using three factors:

  1. Environmental
    Considers the impact a company has on the environment, such as its carbon emissions, air and water pollution, deforestation, green energy initiatives, water usage, waste management, and clean technology used and created in its supply chain.
  2. Social
    Refers to the social impact an individual company has and how it advocates for social good and change in society. Analysts look closely at a company’s involvement and stances on social issues such as human rights, racial diversity in hiring, inclusion programs, the health and safety of its employees and board members, data security, and fair labor practices.
  3. Governance
    Deals with how a company is managed, or governed, for driving positive change. It involves reviewing the quality of the board and management, executive compensation and diversity, shareholder rights, overall transparency and disclosure, anti-corruption efforts and even corporate political contributions.

Who establishes ScholarShare 529’s ESG factors?

ScholarShare 529 is a state-sponsored, tax-advantaged college savings investment program that helps families plan for the cost of higher education. Administered by the seven-member ScholarShare Investment Board chaired by the State Treasurer, the plan provides families with a diverse set of low-cost investment options, tax-deferred growth, and withdrawals free from state and federal taxes when used for qualified education expenses.

ScholarShare 529 leverages the broad and deep resources of Nuveen’s Responsible Investing Team. Nuveen maintains direct relationships with data providers that supply informative, high-quality ESG metrics that are used for portfolio construction. The process has been approved by an independent board chaired by the California State Treasurer.

What ESG strategies does ScholarShare 529 use?

ScholarShare 529 is one of the largest 529 plans in the country and has proudly offered the Social Choice Equity Portfolio for 15 years. With the recent addition of 12 new portfolios that build upon the strength of the current offering, we stand out as a forward-thinking plan for recognizing and supporting investor demand for ESG investment options.

With ScholarShare 529, you have choices. We offer ESG Enrollment Year Portfolios that include a mix of stocks, bonds and cash that become more conservative over time, as well as single-fund ESG portfolios like the Social Choice Equity, International Equity, and Bond. Here are your ESG investment options:

  • ESG Enrollment Year Portfolios
  • Social Choice Equity Portfolio
  • ESG International Equity Portfolio
  • ESG Bond Portfolio

ScholarShare 529 has long been committed to making the future brighter for the next generation of college students by helping to make higher education more affordable and addressing the environmental and social issues that are important to so many of us.

Learn more about ScholarShare 529’s full range of investments.
ScholarShare529.com/Research
Sustainable Investing: A Fad or the Future?

It’s no secret that sustainable investing is popular these days. But is it a fleeting trend or a savings strategy with staying power?

Sustainable investing is an investment strategy that specifically considers environmental, social and governance (ESG) criteria as part of the process for portfolio construction. So, it not only considers investment rationales for the companies in a portfolio, but also how those companies compare to their industry peers based on ESG metrics.

How big is sustainable investing?

The increased demand for sustainable investing represents a shift in how companies have been traditionally viewed and valued among the public. Many young investors prefer to invest in businesses with similar values as their own, and mounting concern over climate change and other environmental/social issues has also increased the demand for ESG investing.

How significant is the demand? Nearly seven out of ten investors are familiar with the label ESG and eight out of ten investors are interested in sustainable options. In a recent report, 99% of millennial investors are attracted to ESG investments.

People are taking action, too. Between 2018 and 2020, U.S. professionally managed sustainable investments grew by 42%, increasing from $12 trillion to over $17 trillion. In fact, sustainable investments currently account for 33% of all professionally managed assets in the U.S.

Why are ESG investments popular?

There are varying motivations for sustainable investing, but investors generally want their investment choices to reflect their societal values and promote some of the same ideals they stand for, while still producing competitive investment results.

As for performance, sustainable investing doesn’t necessarily mean you forfeit financial returns. In fact, ESG funds can perform just as well as, or better than, non-ESG funds. In 2020, 14 of 17 ESG-exchange-traded funds outperformed the S&P 500 from January to May. And according to Morningstar, 23 new ESG funds launched in 2020, which have provided investors with more choices for sustainable investing across asset classes and regions. If this growth continues, companies with lower ESG scores may even seek to improve their standards with regard to environmental, social and governance business practices.

Concerns over climate change are also an especially large driver of growth. About 76% of older millennials indicate that climate change poses a serious threat to society. While there is a particularly large following in ESG investing among millennials, other demographic groups have also shown considerable interest. According to Morningstar data, 72% of the U.S. population “expressed at least a moderate interest in sustainable investing.”

To be fair, every generation has had societal issues it cares about—think back to the ‘60’s when there were grassroots movements fighting for social change. Back then, there were few, if any, ways to access investment products that echoed the sentiment of the time. Now, modern investors have the opportunity to align investments with the issues that are important to them. For families planning to send children to college, ScholarShare 529 is an effective vehicle to support these values while saving for the future.

Is ScholarShare 529 a socially responsible choice?

ScholarShare 529 is a state-sponsored, tax-advantaged college savings investment program that helps families plan for the cost of higher education. Administered by the seven-member ScholarShare Investment Board and chaired by the State Treasurer, the plan provides families with a diverse set of low-cost investment options, tax-deferred growth, and withdrawals free from state and federal taxes when used for qualified education expenses.

ScholarShare 529 is one of the largest 529 plans in the country and has proudly offered the Social Choice Equity Portfolio for 15 years. With the recent addition of 12 new portfolios that build upon the strength and popularity of the current offering, we stand out as a forward-thinking plan for recognizing and supporting investor demand for ESG investment options.

ScholarShare 529 is one of the few leading plans to offer a full suite of ESG investment options. We are a clear leader in responsible investing among 529 plans nationwide.

Learn more about ScholarShare 529’s full range of investments.
ScholarShare529.com/Research
ScholarShare 529: ESG Leadership Matters

Sustainable investing incorporates environmental, social and governance (ESG) factors into the portfolio investment process. In recent years, it has grown significantly and many asset management firms have expanded their ESG offering, providing investors with the asset class building blocks to create diversified portfolios to fully serve their investment objectives. ESG lineups are now available on a variety of different platforms, and even in 529 college savings plans like ScholarShare 529.

How big is the demand for sustainable investments?

It’s so big that it’s receiving attention from a number of different places. Among the public, a new generation of investors is calling on companies to exemplify higher standards with regard to ESG business practices. So much so that money managers have created a multitude of investment products that align ESG preferences with investments across a variety of asset classes, regions and specific causes. Sustainable investing allows the socially conscious to invest with their heart, which is sometimes viewed as important as generating competitive investment results.

Policymakers have taken notice, too. The Sustainable Finance Disclosure Regulation (SFDR) directive, along with the Biden plan for achieving net-zero emissions by 2050, moved ESG up the priority list. People are no longer just talking about change, but there has been real progress and leaders have shown commitment to actually improving environmental, social and governance factors. Recent events related to climate disasters, the global pandemic, and civil rights protests have ignited and reshaped conversations about what it means to be socially responsible in today’s global economy.

Millennials, in particular, are popularizing sustainable investing. They contributed $51.1 billion to sustainable funds in 2020, compared to less than $5 billion five years ago. One-third of millennials have investments that include ESG factors, compared to 19% of Gen Z, 16% of Gen X, and 2% of baby boomers. However, other demographic groups have also taken note—72% of the U.S. population “expressed a moderate interest in sustainable investing.”

What makes ScholarShare 529 an ESG leader?

ScholarShare 529 is one of the largest 529 plans in the country and has offered the Social Choice Equity Portfolio for 15 years. With the addition of 12 new portfolios that build upon the strength and popularity of the current offering, we stand out as a forward-thinking plan for recognizing and supporting investor demand for ESG options for all account owners.

Because most 529 plans don’t offer ESG investment options and ScholarShare 529 is one of the few leading plans to offer a full suite, we are a clear leader in responsible investing among 529 plans nationwide. Simply put, we are making college more accessible while addressing the desire for investments that recognize social good.

What are the ScholarShare 529 sustainable portfolios?

In addition to existing (non-ESG) Active and Passive Portfolios, ScholarShare 529 offers ESG Enrollment Year Portfolios that have a mix of stocks, bonds and cash that becomes more conservative over time. The Plan also contains single-fund ESG portfolios that cover primary asset classes, like the Social Choice Equity Portfolio, ESG International Equity Portfolio, and ESG Bond Portfolio. Here are your ESG Investment options:

  • ESG Enrollment Year Portfolios
  • Social Choice Equity Portfolio
  • ESG International Equity Portfolio
  • ESG Bond Portfolio

With over 375,000 accounts with a total value of more than $12.7 billion in plan assets as of 1/31/2022, ScholarShare 529 is helping families save responsibly for higher education.

“Our ongoing commitment to help families achieve their educational goals with sustainable investment options makes ScholarShare a clear leader in responsible investing among all 529 plans nationwide,” said Julio Martinez, Executive Director of the ScholarShare Investment Board. “Our affordability and flexibility make it possible for families to save more money for college while addressing the social issues we care so much about.”

Learn more about ScholarShare 529’s full range of investments.
ScholarShare529.com/Research
Sustainable Investments Versus Traditional Investments

Traditional investment strategies tend to focus on the investment rationale to justify security selection for a portfolio. For example, an analyst may evaluate a stock’s discounted cash flows or earnings multiple. Sustainable investing, which integrates environmental, social and governance (ESG) factors into the investment process, first began several decades ago as a niche following among the more socially conscious investors.

Today, it’s recognized that companies with solid ESG scores and sound business practices often make good investments, too. ESG investing is now seen as a mainstream investment offering across a number of different platforms, providing millions with portfolio strategies that reflect their own values while still delivering competitive results.

How do ESG investments compare to traditional investments?

One of the largest misconceptions about sustainable investing is that it will necessarily produce lower investment returns. Surveys show that 70% of investors believe sustainable investing requires a financial tradeoff. Among those who believe sustainable investing requires a tradeoff, 83% are age 25 to 38—more than any other age group.

Past data, however, shows that not all of this concern is valid. Analysis demonstrates that sustainable U.S. equity funds outperformed traditional peer funds by a median total return of 4.3 percentage points in 2020, and sustainable U.S. taxable bond funds beat their non-sustainability counterparts by a median total return of 0.9 percentage points in the same period. In fact, data from 2004-2018 show that sustainable funds' median total returns were in line with those of traditional counterparts and provided more downside risk protection, especially during periods of increased market volatility.

Do ESG investments make a difference?

Responsible investing looks to invest in companies and areas that may ultimately drive beneficial outcomes for investors, society and the planet. By embedding ESG factors into investment research, due diligence, portfolio construction and ongoing monitoring, ScholarShare 529 helps families to achieve their higher education goals and to make a difference.

ScholarShare 529 is one of the largest 529 plans in the country and has offered the Social Choice Equity Portfolio for 15 years. With the recent addition of 12 new portfolios that build upon the strength of the current offering, we stand out as a forward-thinking plan for recognizing and supporting investor demand for ESG options among all generations.

ScholarShare 529 is one of the few leading plans to offer a full suite of ESG investment options. We are a clear leader in responsible investing among 529 plans nationwide. And, our ESG portfolios are designed to meet risk and return objectives by investing in companies with more favorable ESG practices relative to their peers.

What other companies meet ESG criteria?

A number of well-known corporations exemplify sound business practices, including Microsoft Corporation, Tesla, Home Depot, Mastercard and Walt Disney Co (as of 12/31/2021). These and other large, recognized companies demonstrate strong ESG values and help deliver on portfolio objectives.

Sustainable investing is no longer behind the scenes. It’s a globally recognized strategy to integrate traditional investment concepts with ESG best practices. Importantly, it can be a part of your saving for college strategy and offer numerous benefits to help serve investors over the long run.

Learn more about ScholarShare 529’s full range of investments.
ScholarShare529.com/Research

Responsible investing incorporates Environmental Social Governance (ESG) factors that may affect exposure to issuers, sectors, industries, limiting the type and number of investment opportunities available, which could result in excluding investments that perform well. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributor and underwriter for the California 529 College Savings Plan. Neither TIAA-CREF Tuition Financing, Inc., nor its affiliates, are responsible for the content found on any external website links contained herein.

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