Pension Sense blog | August 8, 2022

Convincing sizable companies to change their policies isn’t easy for CalSTRS or any other investor.

It becomes easier, though, when investors stand together. That’s why we co-founded and are an active member of Climate Action 100+.

Climate Action 100+ is a powerful coalition of 700 investors that control more than $68 trillion in assets and share the goal of persuading the largest greenhouse gas emitters in the world to reduce their emissions. Members are united around three objectives: Persuading companies to improve their governance, strengthening financial disclosure related to climate change, and committing to reducing emissions.

Participating in coalitions such as Climate Action 100+ helps us achieve our goal of achieving a net zero portfolio by 2050 or sooner. Net zero means that companies in our portfolio will not emit any greenhouse gases unless they are offset by reductions.

Climate Action 100+ added 70 new members last year. Members include the California Public Employees’ Retirement System (CalPERS) and pension funds from the states of Washington, Maryland and Vermont, and the nations of Switzerland, England and Canada.

Climate Action 100+ targets most of the largest companies in the world, including automakers, oil companies, airlines, airplane makers and utility companies. Ford, Honda, ExxonMobil, Phillips 66, Boeing and Duke Energy are among the companies the coalition is focusing on.

We serve as a lead engager for eight corporations and have used the tools available to us to create change, including writing letters, holding meetings, drafting shareholder proposals and encouraging other investors to vote in favor of those proposals.

Earlier this year, Duke Energy and Dominion Energy (CalSTRS leads the engagements at both companies) made serious new commitments to reduce greenhouse gas emissions. Duke also agreed to accelerate the closing of the coal plants it operates.

Last year, we saw concrete results from our leadership in engaging Phillips 66. Our shareholder proposal was approved at the annual meeting and led to a report from Phillips 66 on its lobbying activities and how they relate to climate change.

Many other targeted companies have made progress:

• 90% of their boards now oversee climate change.
• 69% of these companies made net zero pledges.

Future goals for Climate Action 100+ include securing more ambitious pledges on greenhouse gas emissions from target companies and refining benchmarks used to evaluate them. Our coalition has much more to do, but our successes to date show we do well when acting together.