Interesting, but far from surprising, that pension giants CalSTRS, whose CEO Chis Ailman has played such an important role in our conferences, are taking responsible investing to seriously and proactively. It’s also clearly an organisation wide approach, as we will doubtlessly hear from his colleague Aeisha Mastagni who has been a driving force behind many successful shareholder initiatives driving the urgent push towards net zero, something we’ll hear more about at this years conference for the Americas on Sept 28th

News release | Karen Doron

WEST SACRAMENTO, Calif. (June 29, 2022) – The California State Teachers’ Retirement System has taken action on a record number of shareholder proposals and board elections during the 2022 proxy season to hold corporations accountable on climate change and human capital management, including workforce diversity, racial equity audits, and the election of more diverse boards of directors.

As a significant global investor, CalSTRS applied a consistent and thoughtful approach to voting on 1,033 shareholder proposals this year. Nearly 100 CalSTRS-supported shareholder proposals received more than 50% shareholder support, including successful proposals aligning corporate activities with the goals of the Paris Agreement on climate change, enhancing transparency and disclosures on racial equity, and strengthening governance practices. Majority support of these proposals indicates a growing awareness by shareholders that these issues are important when making investment decisions. 

“Global markets are increasingly recognizing how important environmental, social and governance factors are for the long-term value of their investments, including the undeniable risks of climate change,” said Aeisha Mastagni, CalSTRS’ Sustainable Investment and Stewardship Strategies’ portfolio manager. “Our actions during this historic proxy season are rooted in our mission of securing the financial future of California’s public educators and their beneficiaries.” 

CalSTRS carefully reviewed each shareholder proposal in the context of its Corporate Governance Principles and commitment to a net zero investment portfolio by 2050 or sooner. As an active steward of capital with broadly allocated assets, CalSTRS engages hundreds of companies each year to promote sustainable business practices. Consistent with its fiduciary responsibilities, the fund advocates changes to public policies and corporate practices that promote responsible governance and market transparency, create long-term value for shareholders, encourage improved human capital management at corporations, and support a path to net zero.

For the 2022 proxy season, CalSTRS committed to vote in favor of shareholder proposals that made measurable gains on net zero, such as the setting of appropriate science-driven targets to reduce emissions, including in the energy sector. Many of the CalSTRS-supported proposals received majority support from shareholders. CalSTRS expects corporations to appropriately manage climate-change risks by publishing a report aligned with the Task Force on Climate-Related Financial Disclosures and disclose, at a minimum, direct emissions (Scope 1) and indirect emissions (Scope 2).

CalSTRS also cast votes that pushed for greater visibility around corporate lobbying activities on climate change, creating more consistency between the public positions of these corporations and their behind-the-scenes conduct when influencing legislative or regulatory policies. Earlier this month, CalSTRS called on the U.S. Securities and Exchange Commission, which regulates capital markets to protect investors, to strengthen proposed rules concerning climate-related disclosures among public companies—a crucial step for investors to measure progress toward a net zero economy.

CalSTRS voted on 244 shareholder proposals pertaining to human capital management, workplace diversity, and racial equity audits to advance policy improvement in these critical areas. In addition, CalSTRS engaged with large corporate employers, which included voting for shareholder proposals that eliminate forced arbitration and gag clauses, to ensure persistent systemic harassment is not tolerated in the workplace.

For the next proxy season, CalSTRS anticipates engagement will focus more on actively escalating proxy votes and putting pressure directly on corporate laggards to provide investor-useful disclosures.

Media contact

Karen Doron
Phone: 916-414-1440
M-F, 8 a.m. - 5 p.m. PDT
Newsroom@CalSTRS.com

About CalSTRS

The California State Teachers’ Retirement System provides a secure retirement to more than 980,000 members and beneficiaries whose CalSTRS-covered service is not eligible for Social Security participation. On average, members who retired in 2020–21 had 25 years of service and a monthly benefit of $4,813. Established in 1913, CalSTRS is the largest educator-only pension fund in the world with $314.8 billion in assets under management as of May 31, 2022. CalSTRS demonstrates its strong commitment to long-term corporate sustainability principles in its annual Sustainability Report. For more information, visit CalSTRS.com.