CalSTRS Pledges to Cut GHG Emissions of $300 Billion Portfolio in Half by 2030
The California State Teachers’ Retirement System (CalSTRS), one of the largest public pension funds in the U.S., with over $310 billion in assets, announced a series of climate-focused investment initiatives and commitments, including a pledge to reduce greenhouse gas (GHG) emissions across its investment portfolio by 2030.
The new commitment follows the establishment last year by CalSTRS of a target to achieve a net zero emissions portfolio by 2050, and forms part of its newly implemented “total fund plan,” which recognizes that “climate change presents material risks to all sectors of the global economy and all asset classes.”
Harry Keiley, chair of the Teachers’ Retirement Board, which governs CalSTRS, said:
“CalSTRS’ net zero pledge is rooted in its century-long promise to deliver a secure retirement for California’s hard-working educators and their families. Taking these interim actions to reduce emissions in our portfolio is a profound step forward and underscores our commitment to considering the impacts of climate change fully and systematically as we manage our fund on every level.”
In addition to its 2030 portfolio emissions reduction goal, CalSTRS introduced commitments to adopt processes for the incorporation of emissions into investment decisions as part of risk-and-return analyses and potential impacts on plan funding, allocate 20% of its public equity portfolio to a low-carbon index, and to integrate climate scenarios into its asset-liability modeling framework to help guide investment decisions.
Board Vice Chair Sharon Hendricks added:
“We need to escalate our work in reducing emissions, expand our investments in low-carbon solutions and use our influence to accelerate the global economy’s transition.”