Low-Carbon Economy

Transition to a low-carbon economy

Overview

CalSTRS recognizes that climate change presents a material and existential risk to society and the economy. We are committed to influencing public policies, engaging with companies and investing to promote an orderly transition to a low-carbon economy that benefits all.

CalSTRS’ Low-Carbon Transition Work Plan seeks to reduce climate-related risk and identify opportunities to invest in climate-related solutions that will maximize benefit to members. The board established three work plan priorities and five distinct work streams in October 2019.

Priorities

  • Establish a low-carbon investment belief (January 2020)
  • Assess “Transition Readiness” across asset class (Ongoing)
  • Expand investments in low carbon solutions (Ongoing)

Workstreams

  1. Build board and staff consensus on portfolio impacts 
  2. Evaluate the transition-readiness of portfolios by asset class 
  3. Identify investments in new climate-related solutions 
  4. Expand stewardship activities 
  5. Enhance communications and reporting strategies

Detailed information on the work plan is available on the board update.

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Low-Carbon Transition Work Plan highlights

CalSTRS will capitalize on new investments that are additive to the total fund, with a focus on the intersection of climate change and positive financial drivers that support a low-carbon transition.

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The value of engagement

The value of engagement

As a long-term investor, CalSTRS engages companies to align their policies and business practices with the changing world around us. This short, animated video explains how engagement improves corporate sustainability and creates long-term value for CalSTRS members.

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CalSTRS perspective on fossil fuel divestment

CalSTRS acknowledges there are interested parties and stakeholders calling for fossil fuel divestment. Divestment is a last resort action that can have a lasting negative impact on the health of the Teachers’ Retirement Fund, while also severely limiting our ability to shape corporate behavior for long-term sustainable growth.

We share this sense of urgency regarding climate change and are focused on understanding and responding to the risks it presents both to the CalSTRS Investment Portfolio and to sustainable economic growth. That’s why it’s imperative we continue to use our influence with policy makers and companies—including the fossil fuel industry—to help ensure an equitable, prosperous and low-carbon world for future generations.