May 11, 2011
External Affairs Branch
Patricia K. Macht, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Clark McKinley, Information Officer
CalPERS Commits to Campaign for Innovative Environmental Sustainability
OAKLAND, CA – Anne Stausboll, Chief Executive Officer of the California Public Employees' Retirement System (CalPERS) and speaking as Co-Chair of Ceres, today announced plans to implement environmental, social and governance (ESG) commitments that were developed by a diverse group of key economic players.
"Two dozen top executives from Fortune 500s, organized labor, foundations, investment firms and pension funds discussed the urgency of the challenges before us and what we could do collectively and individually to catalyze global-scale action," she said in opening the May 11-12, 2011 Ceres Conference.
Ceres, a national nonprofit coalition of investors, environmental organizations and public interest groups, sponsored a day-long planning ESG commitment development session last December at the CalPERS headquarters in Sacramento. Ceres works with companies to address sustainability challenges such as global climate change and water scarcity.
Today, Stausboll announced four commitments by CalPERS to implement the CalPERS/Ceres vision:
- Complete a process by August for integrating ESG actions into investment decision-making in a uniform way across all five CalPERS asset classes – public and private equity, real estate, fixed income, and inflation-linked commodities, infrastructure, forestland and bonds. Investment staff first will identify global best practices, then ask CalPERS senior investment officers to write ESG goals into appropriate contracts.
- Generate the first annual responsible investment report to the CalPERS Board in September detailing how the pension fund will take a total fund approach to integrating ESG objectives.
- Integrate the Ceres Roadmap for Sustainability into CalPERS corporate governance engagements with public companies, including the Fund's annual Focus List program that identifies underperformers for private engagements with investment staff.
- Collaborate with the California State Teachers' Retirement System (CalSTRS) and other signatories of the Investor Network on Climate Risk (INCR) to encourage Russell 1000 companies to address environmental sustainability issues. Ceres has been mailing out letters asking for company support.
"Each of the signatories is making a specific commitment," Stausboll said. "The letter will request that their management teams and boards address sustainability issues across their organizations – from the boardroom, to their operations, across their supply chains."
CalPERS already has substantial ESG-related investments, including $1.5 billion in private equity clean technology, more than $500 million in an internally-managed public stocks environmental index fund, a successful five-year program that reduced real estate energy use by 20 percent, continuing engagements with portfolio companies on ESG issues, and collaboration with CalSTRS in launching an independent database for potential corporate board candidates who have diverse backgrounds.
Overall, CalPERS is advocating that investors focus on concrete ESG issues and collaborate to avoid fragmenting their agendas, obtain better data that includes key ESG verifiable performance indicators that can be integrated into financial statements, and improve contracting with fund managers in asset classes and externally managed portfolios to advance ESG-related disclosure. The Ceres Roundtable Statement is in the CalPERS Press Room at www.calpers.ca.gov.
CalPERS is the nation's largest public pension fund with approximately $237 billion in market assets. It provides retirement benefits to more than 1.6 million State, public school, and local public agency employees, retirees, and their families, and health benefits to nearly 1.3 million members. The average CalPERS pension is $2,220 per month.
Ceres 2011 Roundtable Statement (PDF, 428 KB)