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CalSTRS will escalate proxy votes to achieve board diversity, net zero progress and climate change action

News release | Karen Doron

WEST SACRAMENTO, Calif. (March 30, 2022) – The California State Teachers’ Retirement System is implementing a new, more robust approach to corporate engagement for the 2022 proxy season. The new engagement strategy focuses on opposing the election of directors in companies that have moved too slowly to achieve greater board diversity or significantly address climate change. CalSTRS will also directly support shareholder proposals that promote further progress in reaching global net zero goals that align with the United Nations’ Race to Zero campaign and principles of the Paris Agreement.

“As a global investor committed to the promise of a secure retirement for California’s public educators, we must act responsibly to ensure corporate directors are accountable for creating long-term value and managing long-term risks,” said Aeisha Mastagni, CalSTRS portfolio manager, Sustainable Investment and Stewardship Strategies. “We are sending a message that corporate directors must meet high standards in the critical areas of board diversity and climate change. If necessary, we will support a change in leadership to meet these standards.”

Studies have shown that companies with diverse leadership have better decision-making processes because people from different backgrounds bring varied and fresh perspectives. CalSTRS has been a leader in encouraging diversity at companies in its portfolio through private engagement, but some companies have resisted change. CalSTRS will execute its votes as follows:

  • Against the entire board of directors of companies that do not have at least one woman on the board.
  • Against directors on a board’s nominating committee if the company does not have at least 30% women board members.
  • Against nominating and governance committee members of companies in the Russell 1000 Index that do not disclose the skills and diversity characteristics of their board members.

Net zero pledges provide an internationally aligned standard for transitioning to a low carbon global economy. CalSTRS has committed to net zero emissions in its investment portfolio by 2050 or sooner.

CalSTRS will vote in favor of shareholder proposals that demand meaningful net zero actions, such as comprehensive public reports or the setting of appropriate, science-driven targets to reduce emissions, by companies in its portfolio.

CalSTRS expects all companies to appropriately manage climate change risks by publishing a report that is aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) and disclose, at a minimum, direct emissions, called scope 1, and indirect emissions, called scope 2. CalSTRS will further this goal by executing its votes as follows:

  • Against directors of the largest global 1,900 companies if they have not published a report on climate change that aligns with the TCFD.
  • Against directors of companies if they have not disclosed scope 1 or scope 2 emissions.
  • Against directors of the highest global emitters if they have not done the following three things: published a TCFD-aligned report, disclosed scope 1 and 2 emissions, and set appropriate targets to reduce greenhouse gas emissions.

During proxy season, corporations hold annual meetings to elect board members and vote on shareholder proposals. In most cases, investors’ votes are weighted by the number of shares they own.

CalSTRS, building on nearly 20 years of promoting best practices in environmental, social and governance issues, played an instrumental role in using its proxy votes last year to replace three directors of ExxonMobil who had inadequate experience in addressing climate change. We will continue to use our position on the world stage to ratchet up pressure and influence key contributors to do better on climate change.

Media contact

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

About CalSTRS

CalSTRS 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 $318.1 billion in assets under management as of February 28, 2022. CalSTRS demonstrates its strong commitment to long-term corporate sustainability principles in its annual Sustainability Report. For more information, visit