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Los Angeles County Employees Retirement Association (LACERA)

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

          Investment Policy Statement
        

01.3. Indicate if the investment policy covers any of the following

Other description (1) Responsible Contractor Policy

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

The Los Angeles County Employees Retirement Association (LACERA) seeks to responsibly steward its investments in a manner that promotes and safeguards the economic interests of LACERA and its members, consistent with LACERA's mission to "produce, protect, and provide the promised benefits" to fund beneficiaries.

LACERA’s Investment Policy Statement (IPS) guides oversight and management of the total fund, including consideration of environmental, social, and governance (ESG) factors. The IPS is framed upfront by Investment Beliefs which formally recognize ESG factors as relevant to LACERA’s investment process. It incorporates fundamental tenets of responsible stewardship into the fund’s investment philosophy and strategy, including management of beneficial ownership rights (such as proxy voting and active ownership strategies) that aim to promote sustainable, long-term value.

LACERA's Corporate Governance Principles identify LACERA's core principles of corporate governance, inclusive of environmental and social factors. They are intended to advance LACERA's Investment Beliefs and broader Investment Policy Statement by articulating LACERA's view on sound governance and guiding LACERA's proxy voting and stewardship initiatives. All of LACERA’s investment activities are rooted in its fiduciary obligations, which – as addressed in the fund’s Investment Policy Statement and Corporate Governance Policy – compel and guide its corporate governance and related activities.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

LACERA’s Corporate Governance Principles expand upon the fund’s Investment Policy Statement’s consideration of environmental, social, and governance (ESG) factors and responsible stewardship. The Corporate Governance Principles are guided by five core concepts that collectively provide a framework by which LACERA aims to promote sustainable investment returns and responsible stewardship of fund assets:

-Accountability: Governance structures and practices should be designed to promote the accountability of a firm's board of directors to the investors who provide the firm with capital. Accountability helps to ensure that a firm is managed in the best interests of its investors.

-Integrity: Integrity and trust are the cornerstone of financial markets and essential for economic stability. Core investor rights and protections are crucial to promoting integrity in financial markets.

-Aligned Interests: Compensation and incentive practices should align the interests of senior executives with those of investors.

-Transparency: Firms should provide investors with clear, comprehensive, and timely disclosures about fundamental elements of the firm's business and financial activities.

-Prudence: Firms should prudently identify, assess, and manage environmental and social factors that may impact the firm's ability to generate sustainable economic value.

LACERA's Corporate Governance Policy outlines the objectives, legal authority, and procedures guiding how LACERA acts on its Corporate Governance Principles. LACERA prudently exercises its rights as an investor to support policies and practices at portfolio companies, as well as public policies governing financial markets, that are consistent with LACERA's Corporate Governance Principles and economic interests in order to promote sustainable, long-term value on behalf of LACERA's members and enhance LACERA's ability to fulfill its mission. Such activities include responsibly voting the fund's proxies in adherence to the Corporate Governance Principles, corporate engagement, public policy advocacy, and investor collaboration.

In addition, management of ESG factors specifically related to the fund’s real estate investments are addressed in the fund’s Responsible Contractor Policy.

Each of these core policies is attached to the fund’s Investment Policy Statement to provide a cohesive and transparent policy framework by which fund assets are managed and address corporate governance and broader ESG factors.

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

Other, specify (1) description

          Investment Policy Statement
        

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

LACERA holds its board members, management, and staff to the highest ethical standards. These standards are based on legal and fiduciary concepts.  LACERA has posted its Code of Ethical Conduct and Conflict of Interest Code on its website at: http://www.lacera.com/about_lacera/codes_policies.html

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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