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California Public Employees' Retirement System CalPERS

PRI reporting framework 2019

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Promoting responsible investment

SG 09. Collaborative organisations / initiatives

09.1. Select the collaborative organisation and/or initiatives of which your organisation is a member or in which it participated during the reporting year, and the role you played.

Select all that apply

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is a founding member of the Principles for Responsible Investment (PRI). During 2017-18, CalPERS' Board member, Priya Mathur, was a member of the PRI Board. In addition, Priya Mathur also Co-Chaired of the Sustainable Development Goals Advisory Committee. CalPERS has been involved in the following initiatives with PRI:

CalPERS was a founding asset owner to the UN PRI Montreal Pledge, CalPERS co-hosted a meeting with PRI at the UN Summit in New York regarding how active owners are looking to move climate change engagement forward through a global coalition.  CalPERS joins PRI on the Climate Action 100+ initiative, and is serving as Chair of the Global Steering Committee. In September 2017, the initiative was presented at PRI In Person in Berlin to call for investor support. In December 2017, CA100+ was publicly launched at the One Planet Summit in Paris, with CalPERS selected to represent the coalition. 

CalPERS staff are members of the committee for the PRI West Coast, the PRI Global Investor Network, and CalPERS Board and staff attend PRI events such as PRI in Person.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is a long standing member of the ACGA and is supportive of their advocacy and leadership to promote governance best practices throughout Asia. Over the last year we participated in ACGA member briefings and planning discussions. We also collaborated with fellow ACGA investor members concerning our engagement work in Japan, such as our Japan Board Independence Initiative and the Climate Action 100+ Initiative.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS supports the work of CDP and encourages companies to provide disclosures to CDP.  CalPERS has used the CDP modelled and reported data extensively in the methodology for the selection of the initial lost of 100 focus companies for the Climate Action 100+ initiative.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS supports the work of CDP and encourages companies to provide disclosures to CDP. CalPERS has used their data extensively on water scarcity research.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is a co-founding member of CII.

The Investment Office often uses this network to help develop a common set of priorities, objectives and approaches relating to corporate governance. Staff frequently participate on panels, roundtable discussions teleconferences pertaining to relative governance topics, such as:

Financial Regulatory Reform (Dodd-Frank Act) Informal Committee
Accounting and Auditing Informal Committee
Regulatory Comment Letters
Pension Fund Issues
As a general public benefit fund member, CalPERS receives one ballot for proxy voting, which is signed by the CalPERS Board President.

CalPERS continues to collaborate with CII on various governance issues and attends its yearly Spring and Fall conferences where Staff may participate on panels and roundtable discussions. CalPERS has used their data extensively and partnered on research related to forced abitration and non-voting shares.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS participates on the GRESB Advisory Boards for infrastructure and real estate and CalPERS began reporting into GRESB in 2016. Using this tool allows CalPERS Investment Office to review ESG data, along with related performance metrics, for assets managed by external managers. The benchmark is being used to understand how CalPERS’ managers and assets compare to the industry and to emerging ESG related performance metrics across global real estate and infrastructure portfolios.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is currently a member of Institutional Investors Group on Climate Change. In 2017, CalPERS convened regional investor networks, including IIGCC, through the Global Investor Colaition on Climate Change and UN PRI, and spent a year reviewing methodology, data sources, and developing a global engagement agenda.The result was the creation of the Climate Action 100+, a coalition currently with over 300 investors representing $30+ Trillion in assets.  The five-year initiative seeks to engage with 161 of the world’s largest corporate greenhouse gas emitters to curb emissions, strengthen related financial disclosures, and improve governance on climate change. CalPERS staff Chair the CA 100+ Global Steering Committee, of which IIGCC is also a member.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is a founding member of ICGN and plays an active role at the ICGN through membership and committee participation. CalPERS Staff and Board members often attend ICGN conferences in order to network with international delegates to improve understanding of country by country governance issues, as well as develop contacts to further this initiative.

In 2017, CalPERS Board Member Dana Hollinger was elected to the ICGN Board and was a presenter in the  ICGN session on Governance priorities and challenges.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is currently a member of Investor Group on Climate Change (IGCC). In 2017, CalPERS convened regional investor networks, including IGCC, through the Global Investor Colaition on Climate Change and UN PRI, and spent a year reviewing methodology, data sources, and developing a global engagement agenda.The result was the creation of the Climate Action 100+, a coalition currently with over 300 investors representing $30+ Trillion in assets.  The five-year initiative seeks to engage with 161 of the world’s largest corporate greenhouse gas emitters to curb emissions, strengthen related financial disclosures, and improve governance on climate change. CalPERS staff Chair the CA 100+ Global Steering Committee, of which IGCC is also a member.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS supports the work of IIRC and maintains close dialogue.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS' Board member Betty Yee is a member of Ceres Board.

In 2005, CalPERS joined Ceres. Since joining, CalPERS has played an active role participating in CERES and Investor Network on Climate Risk (INCR) led collaborative projects, working groups, CERES Board representation and supporting CERES work, such as guidance documents and principles.

Over the past decade, CalPERS has supported the following CERES-led projects:In 2018, CalPERS has Chaired, with Ceres CEO as Vice-Chair the Climate Action 100+ Global Steering Committee, participating in bi-weekly governance and strategy calls to develop the agenda for Global Steering Commitee member discussions.

CalPERS also participates in:

Ceres Investor Network Working Groups -
Carbon Asset Review Initiative
Signed onto We Are Still In Statement to 2017 adminstration expressing our commitment to the Paris Accord
Shareholder Initiative on Climate and Stability (SICS) – Formerly Global Warming Shareholder Campaign.
21st Century Corporation: The Ceres Roadmap for Sustainability – A practical roadmap for integrating sustainability into the DNA of business.
Investor-Business Roundtable for Sustainable Economy – Companies, investors and labor groups to discuss global sustainability challenges.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is a founding signatory to the United Nations Environment Programme (UNEP) Financial Initiative. 

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS is a member of the United Nations Global Compact, and the United Nations Global Compact's Principles are included in CalPERS' Governance and Sustainability Principles appendix as endorsed by CalPERS. We also refer to them as relevant during company engagements.

          International Financial Reporting Standards (IFRS) Council
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS, as representative of the Council of Institutional Investors (CII), actively participates on the International Financial Reporting Standards (IFRS) Advisory Council, an advisory body to the International Accounting Standards Board (IASB). Staff attend semi-annual meetings to participate in setting priorities and develop strategy related to: working with National Standard-setters; understanding and addressing effects of technology on financial reporting and standard-setting; and engagements with academics

          Sustainability Accounting Standards Board (SASB)
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

CalPERS supports the work of SASB. In 2017-18, CalPERS CIO Ted Eliopolous was a member of SASB's Investor Advisory Group. As a member of the Sustainability Accounting Standards Board Investor Advisory Group, CalPERS is committed to the development of comparable and reliable disclosure standards for corporate reporting of ESG considerations with the previously mentioned TCFD standards. Through this strategic partnership, staff engaged in conversations and provided comments encouraging SASB on further alignment with TCFD recommendations. As a prominent potential standard-setter, SASB received comments intended to raise HCM and corporate governance reporting standards in line with our Principles.

          Financial Stability Board
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Through webinars, written testimony and working group participation, CalPERS supported the development of the Financial Stability Board final recommendations of its Task Force on Climate-Related Financial Disclosures (TCFD) and expansion of the PRI annual reporting requirements to incorporate the TCFD framework recommendations for asset classes.

          Securities and Exchange Commission (SEC) Investor Advisory Group
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Staff participate on the Securities and Exchange Commission (SEC) Investor Advisory Group, which has provided opportunity to discuss the Human Capital Management (HCM) Coalition petition for rulemaking pursuant to Rule 192(a) of the Commission’s Rules of Practice. The HCM petition was submitted by the HCM Coalition, of which CalPERS is a founding member.  Together, with other institutional investors with $2.8 trillion in assets, the Coalition requested the Commission adopt new rules, or amend existing rules, to require companies to disclose information about their human capital management policies, practices and performance. The HCM petition was submitted by the HCM Coalition, of which CalPERS is a founding member.  Together, with other institutional investors with $2.8 trillion in assets, the Coalition requested the Commission adopt new rules, or amend existing rules, to require companies to disclose information about their human capital management policies, practices and performance.


SG 09.2. Assets managed by PRI signatories

Indicate approximately what percentage (+/- 5%) of your externally managed assets under management are managed by PRI signatories.

76 %

SG 10. Promoting RI independently

10.1. Indicate if your organisation promotes responsible investment, independently of collaborative initiatives.

10.2. Indicate the actions your organisation has taken to promote responsible investment independently of collaborative initiatives. Provide a description of your role in contributing to the objectives of the selected action and the typical frequency of your participation/contribution.

Description

          CalPERS regularly participates in webinars to support education and training on responsible investment. Examples include: 
Dakota Access Pipeline; Proxy Voting, Climate Risk, PRI Webinars, Climate Action 100+ (Global and North America working groups)
        

Frequency of contribution

Description

          In 2017,  CalPERS partnered with UC Davis to conduct a refresh of the Sustainable Investment Research Initiative (SIRI)  library.  UC Davis was asked to pay particular attention to papers relevant to the following issues: 
•	Environmental: Climate Change – including issues related to resource scarcity, water stress, carbon emissions, energy efficiency, clean technology, and renewable energy 
•	Social: Human Capital – including issues related to income inequality, exploitative labor practices, health and safety, responsible contracting and diversity
•	Governance: Alignment of interest through corporate governance – including issues such as shareowner rights, executive compensation, fund manager terms and conditions and investor protection
        

Frequency of contribution

Description

          CalPERS' Sustainable Investment Research Initiative: a searchable database of academic studies to support peers, partners and stakeholders in learning about the impact of sustainability factors on risk and return for long-term investors. https://www.calpers.ca.gov/page/investments/governance/sustainable-investing/siri-library
        

Frequency of contribution

Description

          Through webinars, written testimony and working group participation, CalPERS supported the development of the Financial Stability Board final recommendations of its Task Force on Climate-Related Financial Disclosures (TCFD) and expansion of the PRI annual reporting requirements to incorporate the TCFD framework recommendations for asset classes. 

CalPERS seeks to ensure sustainable investment considerations are appropriately included throughout the life cycle of investments by internal and external managers.  These processes include selection, contracting, monitoring and management. In 2016, each asset class developed and piloted a set of Sustainable Investment Practice Guidelines (SIPG) which reflect their particular requirements. The SIPGs are intended to evolve and adapt as industry best practices emerge, and as such were updated in 2017.  They are now available and posted to CalPERS’ website to ensure timely availability for interested parties.
        

Frequency of contribution

Description

          Staff participated in events organized by or with CII, PRI, Ceres, ICGN, SASB and wide-range of industry events
        

Frequency of contribution

Description

          We ask managers whether they are PRI signatories as part of due diligence process.
        

Frequency of contribution

Description

          We responded to the Financial Stability Board's draft recommendations of its Taskforce on Climate-Related Financial Disclosures. Through webinars, written testimony and working group participation, CalPERS supported the development of TCFD, expansion of the Principles for Responsible Investment’s (PRI) annual reporting requirements to incorporate the TCFD framework recommendations for asset classes. 

As a member of the Sustainability Accounting Standards Board (SASB) Investor Advisory Group, CalPERS is committed to the development of comparable and reliable disclosure standards for corporate reporting of ESG considerations with the previously mentioned TCFD standards. Through this strategic partnership, staff engaged in conversations and provided comments encouraging SASB on further alignment with TCFD recommendations. As a prominent potential standard-setter, SASB received comments intended to raise HCM and corporate governance reporting standards in line with our Principles.
        

Frequency of contribution

Description

          https://www.ft.com/content/c245af4a-f875-11e8-af46-2022a0b02a6c

https://www.ft.com/content/de658f94-f616-11e8-af46-2022a0b02a6c

https://www.pionline.com/article/20180625/PRINT/180629919/calpers-director-gets-seat-at-vatican-meeting-on-climate-change

https://www.pionline.com/article/20180903/PRINT/180909991/calpers-zeros-in-on-climate-human-capital-issues

https://www.pionline.com/article/20180405/ONLINE/180409900/calpers-appoints-first-sustainable-investment-managing-investment-director

https://www.institutionalinvestor.com/article/b1b34wjflb2fhz/Wellington-CalPERS-and-the-Woods-Hole-Research-Center-Team-Up

https://www.barrons.com/articles/big-investors-bring-big-clout-to-climate-battle-1524838935

https://www.ai-cio.com/news/calpers-makes-esg-changes/
        

Frequency of contribution

Description

          In 2017-18, CalPERS Board member Priya Mathur co-chaired the PRI's SDG Advisory Committee and the CalPERS Investment Office’s Sustainable Investment team participated in the committee’s meetings.
        

Frequency of contribution

specify description

          In 2017-18, CalPERS Investment Director Anne Simpson convened at Vatican with the Pope and executives of major oil and gas producers.
        

Description

          https://www.pionline.com/article/20180903/PRINT/180909991/calpers-zeros-in-on-climate-human-capital-issues     Pope Francis hosted a gathering at the Vatican with major oil and gas executives and investment firms to discuss how to address climate change, CalPERS participated in the planning and was seated at the table for the event.
        

Frequency of contribution

10.3. Describe any additional actions and initiatives that your organisation has taken part in during the reporting year to promote responsible investment [Optional]

ESG Integration: CalPERS' Board approved 5-Year Total Fund Governance and Sustainability Strategic Plan includes key performance indicators for six strategic initiatives. More information can be found: https://www.calpers.ca.gov/docs/board-agendas/201903/invest/item09a-01_a.pdf

In 2018, CalPERS staff organized two Board education sessions.  The first focused on Total Fund Governance and Sustainability Strategic Plan and more in-depth information on the Climate Action 100+ initiative.  The second focused on the Sustainable Development Goals, which included presentations and speakers from the United Nations and PRI, as well as focused discussion on the vision for the Sustainable Investments team and ESG integration.

GRESB - Infrastructure

CalPERS along with seven other global institutional investors, developed a new benchmark that will measure the sustainability of infrastructure investments. Completed in early 2016, it provides a framework for investors to collect and assess key environmental, social and governance factors, and related performance metrics, across their infrastructure assets. CalPERS real assets' team continues to use the GRESB platform and is a member of the Advisory Board.

CalPERS co-convened the UN Investor Summit on Climate Risk in January 2018 and presented on Climate Action 100+. CalPERS is a founding member of the Climate Action 100+ Steering Committee, and initiated the creation of this coalition

CalPERS external communication efforts:

https://www.ft.com/content/c245af4a-f875-11e8-af46-2022a0b02a6c

https://www.ft.com/content/de658f94-f616-11e8-af46-2022a0b02a6c

https://www.pionline.com/article/20180625/PRINT/180629919/calpers-director-gets-seat-at-vatican-meeting-on-climate-change

https://www.pionline.com/article/20180903/PRINT/180909991/calpers-zeros-in-on-climate-human-capital-issues

https://www.pionline.com/article/20180405/ONLINE/180409900/calpers-appoints-first-sustainable-investment-managing-investment-director

https://www.institutionalinvestor.com/article/b1b34wjflb2fhz/Wellington-CalPERS-and-the-Woods-Hole-Research-Center-Team-Up

https://www.barrons.com/articles/big-investors-bring-big-clout-to-climate-battle-1524838935

https://www.ai-cio.com/news/calpers-makes-esg-changes/

All Investment Committee meetings and presentations that highlight CalPERS ESG initiatives, policies, review of CalPERS Principles, and the development of the ESG 5-Year plan can be found on CalPERS YouTube channel here: https://www.youtube.com/user/CalPERSNetwork

 

 

 

 

 

 

 


SG 11. Dialogue with public policy makers or standard setters

11.1. Indicate if your organisation - individually or in collaboration with others - conducted dialogue with public policy makers or regulators in support of responsible investment in the reporting year.

If yes

11.2. Select the methods you have used.

specify description

          CalPERS sit on various regulatory bodies such as the SEC Investor Advisory Group and its subcommittees, International Financial Reporting Standards (IFRS) and others
        

11.3. Where you have made written submissions (individually or collaboratively) to governments and regulatory authorities, indicate if these are publicly available.

11.4. Provide a brief description of the main topics your organisation has engaged with public policy-makers or regulators on.

1. Data and Corporate Reporting - issuing letters on for example, SEC Concept Release S-K, Financial Stability Board Taskforce for Climate-Related Financial Disclosure, SEC Pay Ratio disclosure rule, Gender Diversity in Corporate Leadership Act of 2016.

2. Investor Rights - Submitted letter to the Division of Corporate Finance expressing opposition to forced shareowner arbitration provisions.

3. Financial Stability Board Task Force on Climate-related Financial Disclosurers (FSB-TCFD). CalPERS has expressed support for the FSB TCFD Reccommendations and Guidance as they align with CalPERS Global Principles, and engaged companies on reporting in line with TCFD recommendations.

4. CalPERS engaged with U.S. Senators, Representatives, SEC Commissioners, CFTC Chair and Director of Legislative Affairs on equity market structure, housing finance reform, U.S. Proxy Process, Transaction Fee Pilots, and derivatives regulations.

5. Global Investor Statement on Climate Change to G7 and G20 Governments: Letter from 282 long-­‐term institutional investors representing more than USD 17 trillion in assets to G7 & G20 heads of state urging governments to stand by their commitments to the Paris Agreement.

Additional links to written submissions to governments and regulatory authorities:

https://www.calpers.ca.gov/docs/14-ltse_listing_on_iex_letter.pdf

https://www.calpers.ca.gov/docs/09-notice_24_irs_comment_letter_2018.pdf

https://www.calpers.ca.gov/docs/04-hr_4015_letter_to_senate_2018.pdf

https://www.calpers.ca.gov/docs/02-capital-markets-hearing-2018.pdf

CalPERS makes public our legislative and regulatory letters, as well as provides information on legislative reports submitted to governor, Legislature, and other stakeholders, as required by law: https://www.calpers.ca.gov/page/about/laws-legislation-regulations/legislation

 


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