November 1, 2007

SACRAMENTO, CA – California State Teachers' Retirement System (CalSTRS) today announced support for the Principles for Responsible Investment, a menu of actions on environmental, social and governance issues in making investment decisions.

The Principles for Responsible Investment is an investor initiative in partnership with the United Nations Environment Program Finance Initiative and the United Nations Global Compact. The principles are a framework and a statement of a global standard developed by representatives of 20 institutional investors from 12 countries in April 2006. The six overarching principles recognize the direct link between environmental, social and governance practices to investment performance and risk. The principles include voluntary actions related to investment decision-making, active ownership, transparency and collaboration.

"Our members are teachers who understand the value in preparing our children early for successful futures. Similarly, these principles truly recognize the value of acting now for investment strategies that will be the bulwark of our members’ retirement security in decades to come," said Jack Ehnes, CalSTRS Chief Executive Officer. "CalSTRS joins other institutional investors with today’s action in underscoring the importance of environmental, social and governance issues as an essential part of good investment decisions."

"We are delighted to welcome CalSTRS as a Principles for Responsible Investment signatory. CalSTRS has been leading in the area of responsible investment for many years and their participation in the PRI will be a great asset to the initiative. CalSTRS signing of the PRI reflects the continuing growth of the PRI, which now represents in excess of US$ 11 trillion in assets," said James Gifford, Executive Director, Principles for Responsible Investment. "It is also important to note that the PRI initiative is now more than a set of principles - it is a global network of institutions working together to share best practice and collaborate on emerging environmental, social and governance issues to deliver long-term returns to beneficiaries and clients. CalSTRS' involvement will greatly enhance this effort."

"Historically, Wall Street wanted to disdain environmental, social and governance issues. In the 1970s, Milton Friedman said 'the business of business is business…' That myopic view doesn’t translate into today’s complex global market. The principles, like our CalSTRS policies, recognize long-term issues that affect the sustainability of corporate earnings," said Christopher J. Ailman, CalSTRS Chief Investment Officer.

CalSTRS has reviewed the Principles for Responsible Investment in conjunction with its own policies in this area, namely, the decades-old Statement of Investment Responsibility and the more recently adopted Geopolitical Risk Policy. The principles’ focus is on the same core objectives CalSTRS has long pursued in past years: environmental sustainability, global corporate governance and the geopolitical risk found in emerging markets. The Principles for Responsible Investment will be an important addition to the fund’s existing policies.

The CalSTRS investment policies can be found at www.calstrs.com/Investments. The Principles for Responsible Investment can be found at www.unpri.org/principles/.

With a $176 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the U.S. It administers retirement, disability and survivor benefits for California's 795,000 public school educators and their families from the state's 1,400 school districts, county offices of education and community college districts.