California State Teachers Retirement System (CalSTRS)

In terms of female representation in leadership positions, California State Teachers Retirement System (CalSTRS) has a gender-balanced board of directors where 8 out of 12 members are women. CalSTRS has an engagement and stewardship strategy where it describes its approach on sustainability themes and impact topics with investees and the engagement policy includes a clear framework with success criteria and escalation points. In addition, the pension fund publishes a stewardship report describing how the engagement policy is applied in practice and case studies describing where it has engaged successfully with investees on sustainability themes and impact topics.

CalSTRS has set a target of net-zero financed emissions by 2050 and it discloses that alignment with the Paris Agreement is one of its engagement topics. As a member of Climate Action 100+, the financial institution discloses that it collectively engages with its clients on the topic of climate change. In addition, the pension fund discloses the aggregate amount and share of finance it devotes to climate solutions while specifying what these solutions are. Regarding nature and biodiversity, the pension fund provides evidence that it collectively engages with companies to which it provides financial services on the topic of their nature- and biodiversity-related impacts.

CalSTRS has a grievance mechanism accessible to all workers, external individuals and communities to raise human rights complaints or concerns. The financial institution has a grievance mechanism accessible to all external individuals and communities to raise human rights complaints or concerns. Additionally, the pension fund discloses the proportion of its total direct operations workforce for each employee category by race and gender.

In terms of its approach to senior leadership accountability, CalSTRS has an opportunity link the remuneration of its executive or management teams to sustainability performance criteria. There is no evidence that CalSTRS has a public commitment to gender equality and women’s empowerment, and it could reach at least 40% female representation in the board of directors and senior leadership positions. There is no evidence that the financial institution discloses the ratio of basic salary and remuneration of women to men in its total direct operations workforce for each employee category.

CalSTRS could disclose interim emissions reduction targets at the group level, such as a 45% reduction in financed emissions by 2030. Additionally, CalSTRS has an opportunity to disclose key sectors or companies identified as priorities to engage with on climate issues. Whilst CalSTRS discloses the aggregate amount of finance it devotes to climate solutions; it could align its green bonds with internationally recognised frameworks. No evidence was found regarding the financial institution’s approach to fossil fuels that spans across the fossil fuel value chain, such as the amount or share of finance it directs towards fuels, or its stance on financing companies with new fossil fuel projects.

There is no evidence that CalSTRS has a publicly available policy statement committing it to respect human rights laid out in the UN Guiding Principles and it could describe the process for identifying its human rights risks and impacts through its relevant financing activities. To provide transparency on financial inclusivity, the financial institution has an opportunity to disclose the amount of finance directed towards, for example, women-owned businesses, small- and medium-sized enterprises (SMEs) or low-income developing countries.