Sustainability Risk Management
Sustainability risk management
CalSTRS recognizes that environmental, social and governance (ESG) issues, also known collectively as sustainability issues, affect the performance of the investment portfolio to varying degrees across companies, sectors, regions and asset classes. The CalSTRS Corporate Governance Unit engages corporations, regulators, policy makers, and fellow investors on a variety of sustainability issues with the goal of increasing the level of awareness and importance that the global investment community places on sustainability considerations.
The CalSTRS Corporate Governance Unit also leads the Green Initiative Task Force, which is an internally staffed team that incorporates all asset classes of the CalSTRS Investment Office. The mission of the Green Initiative Task Force is to manage the risks and capture the opportunities associated with climate change and other environmental issues by identifying environmentally focused investments and risk mitigation strategies intended to enhance the risk-adjusted returns of the overall CalSTRS portfolio.
The CalSTRS Board has endorsed the Principles for Responsible Investment (PRI). As such, CalSTRS has incorporated the PRI and other ESG principles into its investment policies and practices. Along with the PRI, CalSTRS works closely with organizations such as the Carbon Disclosure Project (CDP) and Ceres to improve the transparency and disclosure of environmental risk data by corporations. For more information about these organizations please see the following resources.
Read CalSTRS news releases discussing sustainability risk management.