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Net zero history

Milestones in the CalSTRS path to net zero

The science is clear: To ensure the future of our planet, the economy must move toward net zero greenhouse gas emissions. And to achieve our net zero goals, we need the companies in our portfolio to speed up emissions reduction efforts. We use our influence to push for an accelerated transition in three ways: voting on shareholder proposals, engaging with companies, and public policy and regulatory advocacy.

Highlights from 2023

Manage and reduce emissions

  • The Teachers' Retirement Board Investment Committee, at its May 4, 2023, meeting, approved a plan to lower carbon emissions within the Fixed Income Portfolio. The board voted to incorporate an initial carbon reduction of approximately 12%. By approving the 12% reduction in the Fixed Income Portfolio, the board is taking concrete actions toward its net zero emission pledge. This reduction is designed to effectively reduce carbon emissions in alignment with CalSTRS’ risk and return goals.


  • As part of the 2023 proxy season, CalSTRS increased the scrutiny of our votes against boards that are not appropriately managing and addressing sustainable business practices. We voted against the boards of directors at a record 2,035 global companies because they did not provide necessary climate risk disclosures. Disclosure is important for investors to appropriately assess the financial risk climate change poses to a company’s long-term profitability.
  • In February 2023, CalSTRS wrote a letter to the U.S. Environmental Protection Agency in response to the proposed rules advocating for strong methane emissions performance standards that would reduce methane emissions. We went beyond submitting our own comments to the EPA and contacted 46 oil and gas companies with assets in the U.S. subject to the proposed regulations urging them to also submit clear, specific and constructive comments to the EPA. More than half of the 46 companies responded, many saying they generally support efforts to reduce methane emissions.

Investing in climate solutions

  • Just Climate, an investment business established by Generation Investment Management, announced the closing of its inaugural fund. CalSTRS, through the SISS Private Portfolio, is an anchor investor to the new fund. The fund exceeded its $1 billion fundraising target, ultimately raising $1.5 billion. Just Climate will pursue investments in growth-stage, asset-heavy companies globally which have the potential to deliver transformational climate impact across some of the highest-emitting, hard-to-abate industries — including energy, mobility, industry and buildings. Clara Barby, a Senior Partner at Just Climate, is also scheduled to participate in a net zero education session at the Board offsite in July. CalSTRS has a long-lasting existing relationship with Generation Investment Management, who is a sustainability-focused manager in the SISS Public Portfolio.

In August 2022, the board approved a package of investment actions to enhance our efforts to achieve a net zero investment portfolio, address climate change and support the retirement security of California’s public educators. This included a decision to set a science-based interim goal to reduce emissions from the portfolio by 50% by 2030.

The board also approved targeting a 20% allocation of our Public Equity Portfolio to a low-carbon index. This index is designed to significantly reduce emissions while managing risk by allocating more money to companies with low-carbon emissions. This shift alone could reduce portfolio emissions by as much as 14%.

Our Sustainable Investment and Stewardship Strategies team deployed more than $1.3 billion into low-carbon investments. Examples of these types of investments include:

  • A $350 million commitment to a strategy supporting the decarbonization of the U.S. energy market. Specific investments scale renewable power capacity across multiple states and provide cost-effective energy efficiency solutions for industrial processes. 
  • A $60 million commitment to a strategy that provides technology-enabled low-carbon solutions. Specific investments include a digital platform that enables more residential and utility customers to access renewable power and a food company making alternative meat protein from mushrooms with significant carbon and water savings, as well as dietary health benefits. 

Voting on shareholder proposals

In 2022, a record number of proposals were introduced by shareholders at these annual meetings. We applied a consistent and thoughtful approach to voting on 1,033 shareholder proposals in 2022 alone, including proposals that ultimately succeeded in motivating companies to align their corporate activities with the goals of the Paris Climate Agreement.


In September 2021, the Teachers’ Retirement Board pledged to achieve net zero greenhouse gas emissions across the CalSTRS Investment Portfolio by 2050, or sooner. 

This pledge is built on three pillars: managing and reducing portfolio emissions, using our influence to accelerate the global shift to a net zero emissions economy, and increasing investments in low-carbon solutions.


As directed by the Teachers’ Retirement Board, in fiscal years 2019–20 and 2020–21, we conducted a comprehensive study on how the transition to a low-carbon economy impacts companies and investment portfolios by creating risks and opportunities. Over 18 months, we analyzed scientific and academic research relating to the impact of climate change on financial markets and how participants were integrating low-carbon considerations into their decision-making processes. Our study confirmed global economies were accelerating the movement toward reducing and eliminating carbon emissions with many governments, subnational actors, companies and investors committing to net zero emissions.