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The Investment Committee of the California Public Employees’ Retirement System (CalPERS) will hold a workshop on Monday, August 15, to examine how best to integrate environmental, social and governance issues into the pension fund’s investment process in order to enhance risk management.
Environmental, social and governance issues – known as ESG – can affect the financial performance and long-term value of companies and investments. For the past year, the CalPERS Investment Office has been developing a comprehensive plan to implement ESG into investment decision-making across all asset classes. The workshop, scheduled to begin at 9:00 a.m. PST as part of the Investment Committee’s August meeting, will seek Board input on priorities and the development of an ESG integration plan.
“The workshop will help us understand how we apply the principles of sustainability to our investment due diligence,” said George Diehr, Investment Committee Chair. “ESG issues can play a role in company performance, and as a long-term investor it’s important for us to factor into our decision-making anything that can impact a company’s sustainability and value.”
“As a global investor, we’re mindful of ESG-related risks and opportunities around the world,” said Anne Stausboll, CalPERS Chief Executive Officer. “We want to incorporate sustainability-related factors into our investment decision-making because we believe it can lead to better investment performance and maximize our risk-adjusted returns for our members.”
The Investment Committee also will hear the key findings of a study on the integration of ESG at other financial institutions. Among other things, the study, commissioned by CalPERS and conducted by Mercer Consulting, offers an overview of international developments in ESG.
“Environmental, social and governance factors are an essential part of our risk management,” said Joseph Dear, CalPERS Chief Investment Officer. “We must have a way to ensure that the critical challenges that sustainability represents are taken fully into account as we pursue our investment strategy across all our asset classes.”
CalPERS is the nation’s largest public pension fund with approximately $220 billion in assets, providing retirement benefits to more than 1.6 million State, public school, and local public agency employees, retirees, and their families, and health benefits to over 1.3 million members. The average CalPERS pension is $2,220 per month. For more information about CalPERS, visit www.calpers.ca.gov.
