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CalSTRS calls on SEC to require stricter climate disclosures

News release | Karen Doron

WEST SACRAMENTO, Calif. (June 24, 2022) – The California State Teachers’ Retirement System is calling on the U.S. Securities and Exchange Commission (SEC) to strengthen proposed rules concerning climate-related disclosures—crucial for investors to measure progress toward a net zero economy—among public companies in the United States.

The SEC, which regulates capital markets to protect investors, has proposed rules requiring public companies to disclose Scope 1 (direct) and Scope 2 (indirect) greenhouse gas emissions. CalSTRS requested the SEC add Scope 3 (value chain) emissions for all public companies. According to the U.S. Environmental Protection Agency, Scope 3 emissions often represent the majority of an organization’s total greenhouse gas emissions.

“While the SEC’s proposed climate disclosure rules would provide more reliable, consistent and comparable information to investors, inclusion of all company emissions would provide a level playing field for investors to better understand how climate impacts risk and return across our global investment portfolio,” said Aeisha Mastagni, CalSTRS’ Sustainable Investment and Stewardship Strategies’ portfolio manager. “At CalSTRS, we are committed to accelerating the net zero emissions transformation of companies in our portfolio as climate change threatens our ability to deliver a secure retirement for California’s public educators and their beneficiaries.”

About 60% of companies and assets in the CalSTRS Investment Portfolio do not report greenhouse gas emissions. Incomplete and inconsistent data from public companies hampers the ability of investors to efficiently allocate capital to lower climate risk assets, analyze the progress of company emissions reduction commitments, and assess corporate climate-risk and related financial impacts.

Specifically, CalSTRS requested the SEC to adopt the following changes before final rulemaking:

  1. Add Scope 3 emissions to the greenhouse gas emissions reporting requirement for all public companies instead of only those that reference Scope 3 emissions in targets or determine Scope 3 emissions to be financially material.
  2. Require attestation of greenhouse gas emissions for all public companies, including a phase-in period for assuring Scope 3 emissions.
  3. Use the International Sustainability Standards Board’s Climate Standard as the basis for the SEC’s rulemaking and add jurisdictional considerations.

“We make investment decisions every day that help us manage risks and opportunities that will create value over the long term for our members,” added Mastagni. “The status quo is unacceptable. All companies—not just energy companies—must take steps to address climate change while creating long-term value, and the consistent and reliable disclosure of greenhouse gas emissions is a crucial step toward efficiently managing a complex global portfolio of 9,000 companies.”

The Teachers’ Retirement Board committed CalSTRS to a net zero investment portfolio by 2050 or sooner, consistent with the goals of the Paris Agreement on climate change and the United Nations’ Race to Zero campaign, to guard against the worst impacts of climate change, preserve a livable planet and enhance the long-term value of its investments.

CalSTRS is a long-term, global investor and active steward of capital. The fund broadly allocates assets across sectors in its portfolio and engages hundreds of companies each year to promote sustainable business practices in support of its mission to secure the financial future of California’s public educators. The fund advocates at the state, federal and global levels to influence changes in public policies and corporate practices that promote good governance and market transparency, create value for shareholders and support a responsible path to net zero.

CalSTRS is taking action on the lack of robust and comprehensive carbon-emissions data and determining appropriate carbon-related metrics and interim emissions reduction goals that align with fiduciary duties and the internationally accepted, science-based goals of the Paris Agreement. Currently, CalSTRS is investing $20 billion in climate-oriented solutions, and these investments are accelerating as CalSTRS identifies new opportunities.

CalSTRS formally submitted its comments to the SEC within the comment period. The letter can be viewed on the CalSTRS website.

Media contact

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

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 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