Have you ever wondered what CalPERS is referring to when we talk about the "S" (or "social") factor in environmental, social, and governance (ESG)? To us, the "S" means human capital. When we think of the managers overseeing our investments, the people who work for our portfolio companies and their suppliers, the customers who buy our portfolio companies' products, and the communities affected by our portfolio companies' operations, we see human capital as a clear driver of value.

Unfortunately, there are no standards for measuring and reporting on human capital topics, making it difficult for investors to truly understand related risks and opportunities. That’s why we're engaging with standard setters, regulators, and other investors to call for improved disclosures around human capital topics such as management policies, practices, and performance.

Universal reporting standards would allow us to better understand and assess how our portfolio companies and external managers are managing their talent and other key human capital drivers of business.

Proper management of human capital is vital to the success of companies we invest in. For example, we've had a Responsible Contractor Policy (PDF) in place for our Real Assets portfolio for many years.

While engaging our external investment managers and portfolio companies on various human capital topics and reporting, we seek to understand their strategies surrounding workforce, diversity, culture, and organizational decision-making.

Our Work

  • Diversity and inclusion surveys of our external managers to identify key best practices and opportunities for engagement with current partners on practices and policies
  • Research on human capital topics such as economic inequality, workforce transition, diversity and inclusion, and sexual harassment
  • Confidential engagements with public and private companies on a variety of human capital issues identified as investment risks in our portfolio


Fiscal Year 2021-22 CalPERS Real Assets Responsible Contractor Program Policy Annual Report- Investment Manager Compliance Report (PDF)