December 13, 2006

Sacramento, CA – The California State Teacher's Retirement System has joined the Enhanced Analytics Initiative as an Associate Member, becoming the first major U.S. public fund to do so. EAI is an international collaboration of asset owners and asset managers aimed at encouraging investment research that considers the impact of extra-financial issues on long-term company performance.

CalSTRS has added its name to the Initiative's call for greater coverage of extra-financial issues ("EFIs") with the goal of maximizing long term investment performance. Associate Members of EAI are investment institutions that outsource the majority of their share trading operations to external investment managers, and therefore have no direct contractual relationship with research providers, but are actively supportive of the objectives of EAI.

CalSTRS provides retirement, disability and survivor benefits to California's 776,000 public school educators from kindergarten through to community college. In joining EAI, CalSTRS, whose assets total US$156 billion, increases the Initiative's total assets under management to approximately €1.2 trillion (>US$1,500 billion)

Commenting on its membership, Christopher J. Ailman, Chief Investment Officer of CalSTRS, said:

"CalSTRS has long advocated, both to regulators such as the SEC and investment managers and securities analysts, for increased disclosure and analysis on material risks such as climate change. Membership in a network like EAI reinforces that investment policy aim and signals to our partners in the investment profession that this is a core issue for the fund. It is important for mainstream investment professionals and investors to be fully informed on issues that have value implications for the portfolio, and by extension, for our members."

Commenting on the announcement, Peter Moon, Chief Investment Officer of the Universities Superannuation Scheme, said:

"CalSTRS' membership is a strong signal that the call for greater extra-financial analysis is undeniably an international priority. It is not only important to the fund management community, for many, it is becoming an economic imperative. We are delighted that such an important institution has put its name behind the Initiative and look forward to more U.S. organizations following suit."

With a $156 billion investment portfolio, the California State Teachers' Retirement System is the second-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California's 776,000 public school educators from kindergarten through community college.