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California Public Employees' Retirement System CalPERS

PRI reporting framework 2019

Export Public Responses

You are in Direct - Listed Equity Incorporation » Outputs and outcomes

Outputs and outcomes

LEI 12. How ESG incorporation has influenced portfolio composition

12.1. Indicate how your ESG incorporation strategies have influenced the composition of your portfolio(s) or investment universe.

Describe any reduction in your starting investment universe or other effects.

The starting universe for the CalPERS Custom FTSE Global All-Cap benchmark has been screened to omit securities representing the following groups:

  • Tobacco
  • Sudan and Iran
  • Holocaust Era and Northern Ireland
  • Assault Weapon Manufacturers
  • Thermal Coal Companies
  • Governance and Sustainability Principles Screen

The screens don't necessarily result in exclusion in all instances. Some categories require engagement first and, depending on the outcome of engagement, divestment

Specify the percentage reduction (+/- 5%)

1 %

Select which of these effects followed your ESG integration:

          engagement and proxy voting

12.2. Additional information.[Optional]



LEI 13. Examples of ESG issues that affected your investment view / performance

13.1. Provide examples of ESG issues that affected your investment view and/or performance during the reporting year.

ESG factor and explanation

Corporate Board Diversity

  • CalPERS will continue to engage its portfolio companies to improve corporate board diversity, and use proxy voting and shareowner campaigns to bring about change where engagements do not lead to constructive outcomes. Since July 2017, CalPERS has engaged roughly 700 companies in the Russell 3000, requesting that they improve broadly-defined diversity on their boards. During the 2018 Proxy season., 30% of companies engaged added a diverse director to their boards (151 of 504 companies)


ESG incorporation strategy applied Integration

Impact on investment decision or performance

As a result of staffs' efforts many of the companies committed to nominating diverse directors. It is expected that diverse boards will drive positive company performance leading to a long-term sustainable advantage for our portfolio.

ESG factor and explanation

Climate Action 100+ initiative - CalPERS collaborates with other global investors to engage the 161 largest carbon emitters. The engagement focuses on supporting companies as they transition to a low-carbon economy and improve governance related to risk and opportunities associated with climate change, establish metrics and reduction targets, and strengthen climate-related financial disclosures.

ESG incorporation strategy applied Integration

Impact on investment decision or performance

CalPERS continues to engage these companies and expects the long-term benefits of this effort will be lead to positive performance for our portfolios.

ESG factor and explanation

CalPERS believes that integrating ESG into the investment decision-making process leads to more resilient portfolios with better long-term portfolio risk and return characteristics. CalPERS engaged external managers and encouraged them to integrate ESG into their fundamental/quantitative research efforts to understand and quantify the risks and opportunities inherent in an ESG-aware portfolio.

ESG incorporation strategy applied Integration

Impact on investment decision or performance

Engagement with our external managers was successful with a full 100% of Listed Equity managers adopting an ESG integration approach. CalPERS believes this effort will lead to long-term positive performance for our portfolios.

13.2. Additional information.[Optional]