News release | Mindy Tirapelle

WEST SACRAMENTO, Calif. (August 1, 2024) – The California State Teachers’ Retirement System—the world’s largest educator-only pension fund—focused on climate risk disclosure during the 2024 proxy season, voting against the boards of directors at a record 2,258 companies. This is up from a then-record 2,035 companies in 2023.

CalSTRS expects all portfolio companies to accomplish the following, to help effectively manage the risks and opportunities associated with climate change:

• Publish a report on sustainability-related disclosures that aligns with the International Financial Reporting Standards, which took over the monitoring of companies’ progress on climate-related disclosures from the Task Force on Climate-related Financial Disclosure (TCFD).
• Disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions. Scope 1 emissions come from a company’s operations and Scope 2 emissions are from the generation of power a company uses.

In addition to the above disclosures, CalSTRS expects the highest global emitting companies on the Climate Action 100+ focus list and other high-emitting companies to also set appropriate targets to reduce GHG emissions, as this is an important step to reach a net zero portfolio by 2050 or sooner.

"At CalSTRS, we need consistent, accurate and comparable data from all companies in our portfolio to mitigate risk and accurately measure and reduce emissions,” said Aeisha Mastagni, a senior portfolio manager on CalSTRS’ Sustainable Investment and Stewardship Strategies team. “We will continue to use our voice alongside fellow institutional investors to hold companies accountable for climate-related disclosures. This helps protect the Teachers’ Retirement Fund on behalf of our members and their beneficiaries.”

Despite the inconsistent levels of climate data disclosure, there was considerable improvement in methane emissions reporting from portfolio companies. Methane is 80 times more potent than carbon dioxide and CalSTRS continues to call on eligible companies to join the Oil and Gas Methane Partnership 2.0 (OGMP 2.0), a United Nations-led framework committed to the measurement, reporting and mitigation of methane emissions.

Focusing on methane emissions is one of the most economically viable and immediate means to slow climate change. The International Energy Agency estimates 30% of methane emissions from fossil fuel operations can be abated with no net cost.

As a result of CalSTRS-led engagements, 10 companies have joined OGMP 2.0, including ExxonMobil, Chevron, Harbour Energy, OMV A.G. and Vital Energy.

Additionally, several companies CalSTRS has engaged with in the exploration and production industry became members through mergers with companies that were already part of OGMP 2.0.

“We’re encouraged by the increase in action toward methane emissions reduction and the new members joining OGMP 2.0,” Mastagni said. “Methane has a massive impact and mitigation of methane is one of the more efficient ways to limit the impact of greenhouse gases worldwide.”

During the 2024 proxy season, CalSTRS voted at more than 10,000 global company meetings, on more than 100,000 individual ballot items, and on more than 1,200 shareholder proposals covering topics such as human capital management (workforce management and employee wellness), board governance and climate-related risks.

CalSTRS will continue working collaboratively with peers to influence the world’s largest companies to create sustainable business practices—which in turn will minimize risk and create value—and ensure California’s public educators continue to have a secure retirement.

See CalSTRS’ Path to net zero, Corporate Governance Principles and proxy voting records for more information.

Media contact

Mindy Tirapelle
Phone: 916-414-1440
M-F, 8 a.m. – 5 p.m. PDT
Newsroom@CalSTRS.com

About CalSTRS

CalSTRS provides a secure retirement to more than 1 million members and beneficiaries whose CalSTRS-covered service is not eligible for Social Security participation. On average, members who retired in 2022–23 had 25 years of service and a monthly benefit of $5,141. Established in 1913, CalSTRS is the largest educator-only pension fund in the world with $341.4 billion in assets under management as of June 30, 2024. CalSTRS demonstrates its strong commitment to long-term corporate sustainability principles in its annual Sustainability Report.