Nuveen is a global investment manager with over $1 trillion in public and private assets under management and a legacy that stretches back more than 125 years. As Head of ESG/Impact, Global Fixed Income at Nuveen, Stephen Liberatore has been at the forefront of ESG innovation, currently managing over $22 billion in active total-return fixed income strategies. His team focuses on direct and measurable outcomes like financing renewable energy, affordable housing, biodiversity, and more, while aiming to outperform conventional benchmarks.
In this interview, Stephen shares how sustainable investing have evolved in fixed income markets, why the bond market is essential to scaling outcome-driven impact, and where innovation is heading next.
Can you tell us about your path to leading Nuveen’s ESG/Impact fixed income platform?
I’ve spent my entire career in fixed income, with a focus on total return and credit-driven strategies. I’ve always found fixed income particularly interesting, because it offers more levers to generate alpha, and on the impact side, the ability to fund specific and unique projects.
In 2004, I began managing the fixed income sleeve of TIAA’s Social Choice Account, which is a 60-40 balanced fund available to pension clients, and one of the earliest sustainable investment products in the U.S. Social Choice had strong internal support at its inception and brand alignment, which resonated with sustainable investors due to the firm’s longevity in the space.
When I started, the fixed income portion of Social Choice was ~$3 billion. Over time, our platform has significantly expanded to over $22 billion in ESG and impact asset under management, and now encompasses active core strategies, as well as short-duration impact, Green Bonds, Social Bonds and Impact strategies. Along the way, I’ve had the opportunity to help shape the market through work on the initial Green Bond Principles executive committee, and other sustainability committees and working groups like the Orange Bond Initiative and the Practice Standards for Debt Conversion Projects for Nature, Resilience and People.
What defines your approach to ESG and impact in fixed income?
We’ve built our strategy on the belief that ESG integration and measurable impact can enhance performance. We focus on two interrelated pillars: ESG leadership and measurable impact. ESG evaluation is critical to risk management. It helps us identify issuers with more stable free cash flow and higher credit stability, which is key to fixed income outperformance.
On the impact side, we’re use-of-proceeds investors. We look for bonds that finance tangible, outcome-driven projects like clean energy or affordable housing. We won’t invest unless there’s transparency, credible impact data, and alignment with our proprietary framework, which has stood the test of time since its inception in 2007.
Our client base, especially the institutional segment, sees the value in risk mitigation and purpose-driven capital deployment. All of this supports our core belief that ESG and impact strategies can drive long-term alpha by improving risk profiles and accessing less correlated opportunities.
Ultimately, our approach has resonated over time. Despite headlines about outflows, demand for ESG fixed income at Nuveen has grown and is becoming a larger part of the market on a relative basis. From our view, sustainable investors are increasingly recognizing the importance of sustainability in public fixed income. Nuveen’s growth has been particularly strong in impact strategies, expanding from annuities to open-end funds, closed-end funds, UCITS, and institutional separate accounts. Our client base now spans pensions, retail, endowment and foundations, religious organizations, State Funds, Family Offices and international markets.
“Despite headlines about outflows, demand for ESG fixed income at Nuveen has grown and is becoming a larger part of the market on a relative basis. From our view, sustainable investors are increasingly recognizing the importance of ESG in public fixed income.”
Stephen M. Liberatore, CFA, Lead Portfolio Manager and Head of ESG/Impact for Global Fixed Income, Nuveen
What role does fixed income play in supporting the climate transition?
Public bonds are one of the most powerful tools available to finance the climate transition at scale. In 2024, for energy transition, equity capital totalled $50 billion, while fixed income capital exceeded $1 trillion – twenty times the equity investment.
Green Bonds and other labelled debt instruments let us direct capital straight into clean energy, resilient infrastructure, and emissions reduction projects. The transparency around use-of-proceeds helps ensure we’re funding real outcomes, not just vague sustainability commitments. Further, fixed income capital is critical for scaling impact, particularly in later stages of technology development and infrastructure projects, while potentially lowering the overall cost of capital.
We also see a growing role for transition finance to support issuers in high-emitting sectors as they shift to more sustainable models. But that requires credible plans with quantifiable targets, not just marketing labels.
“Public bonds are one of the most powerful tools available to finance the climate transition at scale. In 2024, for energy transition, equity capital totalled $50 billion, while fixed income capital exceeded $1 trillion – twenty times the equity investment.”
Stephen M. Liberatore, CFA, Lead Portfolio Manager and Head of ESG/Impact for Global Fixed Income, Nuveen
How has the sustainable bond market evolved since the early days of Green Bonds? What other innovative structures are you excited about?
The change has been remarkable. When we started, Green Bonds were a niche product. Today, we see over $1 trillion in annual sustainable debt issuance across Green, Social, Sustainability, and newer formats like Transition, Blue, and Orange Bonds.
What’s improved most is the quality. Investors now expect detailed reporting and outcome data. That’s raised the bar and made the space much more investable for mainstream capital.
We’ve also seen innovation in structures, from solar ABS to gender bonds. The “Rhino Bond,” for instance, tied investor returns to the success of a wildlife conservation program showing how outcomes-based financing can align all stakeholders. Nuveen has been fortunate to be the lead investor in several of these innovative deals.
Debt-for-nature swaps restructure a portion of sovereign debt in return for conservation commitments. As investors, we’ve supported landmark swaps in Ecuador and Barbados that carry financial returns and fund environmental projects. In Ecuador’s case, over $1 billion in debt was replaced with a new bond that channels savings into protecting the Galápagos Islands. These are complex transactions, but the benefits are enormous: an improved debt profile for the country, biodiversity protection, a new avenue for sustainability focused capital driving a potentially attractive total return profile. We’re now working to help standardize the market and make these tools more scalable.
What are the biggest barriers to growing supply in the current sustainable bond market and what is your outlook for ESG in fixed income moving forward?
The biggest challenge right now is the slowdown in U.S. corporate Green Bond issuance. Many corporates that have issued in the past are holding back, citing “uncertainty,” but without a clear explanation. Our concern is: if issuing a Green Bond was good for investors, customers, and shareholders five years ago, what’s changed? If the business case still holds – and we believe it does – issuers should remain active.
Despite that, I am optimistic long-term. The broader market continues to grow. The long-term drivers of climate risk, shifting demographics, and resource constraints aren’t going away. Capital will need to align with these trends. We’re still seeing strong issuance from agencies, supranationals, munis, and structured products. On the client side, we’re getting more requests for “pure impact” portfolios, managed solely against our impact framework. But to unlock full scale, we need corporates to re-engage and recognize that sustainable investors now represent a large and growing share of the buyer base.
Looking ahead, I think we’ll see continued innovation in labeled bonds, including biodiversity bonds and outcome-based instruments. We’ll also see broader integration of ESG criteria into all fixed income, not just niche strategies. This trend isn’t slowing. In fact, I’d argue the investor base is becoming more sophisticated and more selective about what counts as credible sustainable investing. This scrutiny around greenwashing is healthy; it’s pushing the market to be more disciplined, transparent, and outcome focused. That’s exactly where we’ve been from the start.
Ultimately, the bond market has unmatched potential to channel capital to the world’s most pressing challenges. Done right, sustainable investing in fixed income can deliver both strong financial performance and meaningful change.
