Established in 1981, The Washington State Investment Board (WSIB) is charged with investing assets for 17 retirement plans benefiting public employees, teachers, law enforcement officers, firefighters, and judges. It also manages investments for other public trust funds that support Labor & Industries benefit insurance programs and other state educational and disabilities beneficiary programs. The WSIB currently has 115 employees and has $193 billion in assets under management.
WSIB has a gender-balanced board of directors where seven out of 15 members are women. The pension fund has a stewardship programme where it describes its approach on sustainability themes and impact topics with investees and it publishes a stewardship report describing how the engagement policy is applied in practice. The financial institution publishes case studies describing where it has engaged successfully with investees on sustainability themes and impact topics. In addition, the pension fund discloses the positions it takes in its lobbying and political engagement activities on sustainability themes.
As a member of Climate Action 100+, Washington State Investment Board discloses that it collectively engages with its investees on the topic of climate change. Additionally, the pension fund’s exposure to renewable energy investments rose to 0.71% of its total assets under management, an increase of 34.8% from 2019.
WSIB has an opportunity to assign responsibility for sustainability to the group’s board of directors. Additionally, the pension fund has an opportunity to link the remuneration of its executive or management teams to sustainability performance criteria. Furthermore, while the pension fund has a gender-balanced board of directors, no further evidence was found that it is committed to gender equality and women’s empowerment. It has an opportunity to disclose the proportion of women in senior leadership roles as well as how it addresses any gender pay gaps. In its engagement policy, the pension fund has an opportunity to include a clear framework with success criteria and escalation points.
WSIB could disclose a target to reach net-zero financed emissions by 2050 as well as interim emissions reduction targets at the group level. The pension fund has an opportunity to disclose the key sectors and companies it has identified as priorities to engage with on climate change, specifically on the alignment with the Paris Agreement. No evidence was found regarding the financial institution’s approach to fossil fuels that spans across the fossil fuel value chain and its AUM, such as the amount or share of investment it directs towards fuels, or its stance on investing in companies with new fossil fuel projects. Additionally, the pension fund could make a commitment to minimising its negative impacts on nature and biodiversity or financing regenerative solutions.
WSIB could disclose a publicly available policy statement committing it to respect human rights laid out in the UN Guiding Principles and the ILO declaration on fundamental rights at work. In addition, the pension fund has an opportunity to 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 low-income developing countries.