CalSTRS Persists at Protecting Assets from Environmental Risk Despite President Trump’s Pull Out of Paris Climate Agreement
WEST SACRAMENTO, Calif. – CalSTRS Chief Executive Officer Jack Ehnes issued the following statement in response to President Trump’s decision to withdraw the United States from the Paris Climate Change Agreement:
“For CalSTRS, our primary mission is to maximize returns for the fund in order to safeguard the retirement security for more than 914,000 California educators and their beneficiaries. Over ten years ago, we recognized that climate change presented investment opportunities and risks to the fund and we implemented strategies to address them.
“Our commitment to and support of global sustainability efforts includes $2.5 billion in a low-carbon index and $260 million exposure to green bonds—a more than tenfold growth since 2009.”
CalSTRS Chief Executive Officer
“We put money on the sustainability table in all asset classes and myriad industry sectors. Our commitment to and support of global sustainability efforts includes $2.5 billion in a low-carbon index and $260 million exposure to green bonds—a more than tenfold growth since 2009. In 2015, we made infrastructure investments in renewable energy power plants in Oklahoma and Africa. The Private Equity Clean Technology and Energy Program began in 2005. To date, the program has made nine fund investments and four co-investments, representing $692.7 million in committed capital.
“Once invested, we use our position as active shareowners to mitigate risk and affect industry-wide changes through responsible corporate governance and involvement in organizations like the Sustainability Accounting Standards Board and the Green Bond Principles that work to create industry standards.
“In the past year, CalSTRS direct engagement with portfolio companies has yielded remarkable results, including the appointment of a climate-competent board member at ExxonMobil and groundbreaking risk management and scenario planning activities at Chevron.
“As a powerful institutional investor committed to increasing climate change awareness, CalSTRS acknowledges that environmental risks, both current and those projected over the next 10 to 25 years, absolutely must be considered as part of our fiduciary responsibility. These risks represent a potential material impact, and they warrant mitigating strategies that are driven by active shareholders, like CalSTRS, to hold portfolio companies accountable for their actions and to propel them forward through positive change.
“Despite recent federal actions to withdraw the United States from the Paris Climate Change Agreement, CalSTRS remains steadfastly focused on our commitment to advancing long-term sustainability on a global scale.”
The California State Teachers’ Retirement System, with a portfolio valued $206.5 billion as of April 30, 2017, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s more than 914,000 public school educators and their families from the state’s 1,700 school districts, county offices of education and community college districts.