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The California Public Employees' Retirement System (CalPERS) made significant progress during the 2015 proxy season, where it voted to improve the rights of shareholders to nominate corporate directors - commonly referred to as proxy access - as well as the Environmental, Social, and Governance (ESG) policies of companies in which the fund invests.
"We're pleased that many companies' policies are evolving thanks to the outcome of our votes," said Ted Eliopoulos, Chief Investment Officer for CalPERS. "Important changes in board leadership and environmental strategies will help strengthen these corporations and, in turn, CalPERS' investments."
This proxy season, CalPERS' strategic priorities included proxy access and climate risk reporting. Proxy Access helps to ensure that corporate boards are independent, competent, diverse and accountable to shareowners. CalPERS is supporting proxy access proposals at 100 companies this year, and, to date, 51 of 78 have passed with majority support. Current and historical proxy voting decisions can be found on the new CalPERS website at www.calpers.ca.gov/page/investments/governance.
CalPERS has been engaging fossil fuel companies directly and through its work with Ceres, a non-profit advocate for sustainability leadership, on the Carbon Asset Risk Initiative. The initiative calls on oil and gas companies to assess, disclose, and take action to address the risk and opportunities posed by climate change. Shareowner proposals at two of the largest companies, BP and Shell, gained full support leading to voluntary agreements on additional climate risk reporting.
The Fund also released a new Insight video featuring Anne Simpson, CalPERS' Director of Global Governance, which discusses its major goals and accomplishments.
"CalPERS is a very long-term investor," said Simpson in the Insight interview. "We need to be able to pay pensions for the best part of the next century and when we're thinking about the sustainability of the fund, we're not just thinking about the financial dimension, but we're thinking about the environmental dimension, because that's important to risk and return, and we're thinking about people."
Simpson further explains that CalPERS is working across a number of areas to improve investor rights. In addition to proxy access, she addresses company reporting, advocating that companies integrate sustainability and human capital issues, such as board diversity, into financial reporting to more accurately reflect their risks. She also discusses CalPERS' stance on executive compensation, holding that change is needed in order to focus on long-term accomplishments instead of short-term goals. The full interview can be viewed at www.calpers.ca.gov/page/newsroom.
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 1.7 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 $304 billion. For more information, visit www.calpers.ca.gov.
