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CalPERS Adopts Environmental, Social, And Governance Strategic Plan - Five-Year Plan Identifies Six Strategic Initiatives And Key Performance Indicators

Date 15/08/2016

The California Public Employees' Retirement System (CalPERS) Board of Administration today adopted the Environmental, Social, and Governance (ESG) 5-Year Strategic Plan (PDF), a six -point plan that is the next evolution of CalPERS' work on sustainable investing and the Global Governance program.

The plan identifies six strategic initiatives that will direct staff’s work. The initiatives are data and corporate reporting standards; UN PRI Montreal Pledge company engagement; diversity and inclusion; manager expectations; sustainable investment research; and private equity fee and profit sharing transparency. These initiatives are cross-cutting issues which will have impacts on risk and return. Each initiative has specific objectives, key performance indicators, and a timeline.

The comprehensive plan is a result of more than a year’s worth of review by staff and the CalPERS Investment Committee. During this time, staff presented a thorough review of each channel- environmental, social, and governance. Staff also reported on how each channel could use the approach of integration, engagement, advocacy, and partnerships to move the strategy forward.

"Developing a strategic plan of this magnitude was no easy task," said Henry Jones, CalPERS Investment Committee chair. "I am very proud of this bold plan. It will guide our ESG efforts in a comprehensive and integrated way across all asset classes."

The strategic plan serves as the framework by which CalPERS executes its shareowner proxy voting responsibilities; engages public companies to achieve long-term, sustainable risk-adjusted returns; and works with internal and external investment managers to ensure their practices align with CalPERS’ Investment Beliefs.

The key performance indicators will serve as benchmarks to measure the success of efforts for each initiative. Staff will report to the board the status of the key performance indicators on a quarterly basis.

"CalPERS' ESG efforts have made significant progress on important fronts including proxy access, board diversity, and climate risk reporting," said Anne Simpson, CalPERS investment director of Global Governance. "Under this new strategy, we have a clear path for our efforts through 2021, which is very exciting."

For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 1.8 million members in the CalPERS retirement system and administers benefits for more than 1.4 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS' total fund market value currently stands at approximately $306 billion. For more information, visit