The $152.9 billion California State Teachers Retirement
System (CalSTRS) announced that it would be taking what CEO
Jack Ehnes calls a significant step in its already
broad sustainable investing program: From now on, all
performance-related discussions that the pension giant has with
its external managers will include an analysis of how
environmental, social, and governance (ESG) issues factor into
Whats different now is that were saying,
No matter what youre doing with us, there are ESG
risks that we think will have a long-term impact on the
portfolio, and we want to be sure that youre articulating
for us how youre looking at them, Ehnes says.
Were no longer just making the assumption that this
is in their analysis.
CalSTRSs announcement is part of a broad set of
commitments issued by the participants of the Investor-Business
Roundtable for a Sustainable Economy, a group of prominent
investors, companies and labor unions brought together by
Boston-based Ceres, a coalition of investors and public
interest groups. The Roundtable participants first met late
last year to discuss specific ways that each of them could
contribute to the development of a more stable economy. The
announcements coincide with the first day of the 2011 Ceres
Conference in Oakland, California.
Another major announcement came from the California State
Employees Retirement System (CalPERS), the nations
largest public pension fund with $236 billion under management.
CalPERS CEO, Anne Stausboll, pledged that the behemoth
pension plan would fully integrate ESG factors in all
investment decisions, and across all asset classes. The
corporations involved in the Roundtable include apparel
manufacturer Levi Strauss & Co, which stated that it would
launch an effort to improve factory conditions for its
suppliers and across its supply chain.
CalSTRSs Ehnes says that the conversations he hears on
the topic of sustainability have morphed in the decade since he
started hearing them, and the industry-, company- and
investor-specific commitments announced at todays
conference appear to underscore his point.
You can tell that people are not just there to talk
about sustainability, but to figure out strategies that really
will affect change, he says. As Ive witnessed
this over 10 years, I can really tell the difference in the
tone of conversation from education and networking to trying to
develop specific action plans of steps they can take.