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California Public Employees' Retirement System CalPERS

PRI reporting framework 2020

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by


Divestment - Tobacco: divest from all tobacco stocks and bonds. 

Divestment - Sudan and Iran Acts: identify, monitor, and ultimately divest from companies with business activities in Iran/Sudan, unless exempt on humanitarian grounds, subject to the plan's fiduciary duty which requires that risks and returns take primacy.

Holocaust Era and Northern Ireland: monitor and annually report on investment holdings in companies and their affiliates doing business in California and owe compensation to victims of slave or forced labor during World War II. 

Divestment Assault Weapon Manufacturers: divest from manufacturers of firearms that are banned for sale in California.

Divestment - Thermal Coal Companies Act: engage publicly traded coal companies that generate 50% or more revenue from mining thermal coal. If engagement is not successful, CalPERS is required to divest.

Governance and Sustainability Principles Screen - emerging market companies are evaluated relative to Global Governance and Sustainability Principles and removed from benchmark consideration if any Principles are violated

CalPERS’ Total Fund Divestment policy states our preference for constructive engagement over divestment.

Screened by


CalPERS initiated an ESG research effort aimed at identifying ESG focused strategies. A cross-asset class team reviewed, analyzed, and scored ESG strategies for implementation. Two strategies were identified and funded in 1H 2018. The two strategies are managed externally by QS Investors and AXA-Rosenburg and implemented internally.


Screened by

          CalPERS  Governance and Sustainability Principles


CalPERS Principles are available on CalPERS website at the following URL:



04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

Screening criteria are governed by the Board's Divestment Policy ( ) via Investment Committee. Screening criteria are based on several factors. Screening criteria are either mandated by CalPERS Board (e.g., tobacco) or via legislative mandates (e.g. Sudan/Iran) and/or state law (e.g. Thermal Coal). Annual reports are provided to the public through Board agenda items, which can be accessed on the CalPERS website.

It is staff's responsibility to inform external managers of any changes to the exclusions list on a quarterly basis. Also, Global Equity's benchmark provider works closely with staff to ensure necessary changes are made to benchmarks in a timely fashion.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

          Under the  Total Fund Governance and Sustainability Strategic Plan and Total Fund Policy, CalPERS' Investment Compliance and Operational Risk (ICOR) oversees divestment and exclusionary lists.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.5. Additional information. [Optional]

LEI 06. Processes to ensure fund criteria are not breached (Private)