In Brief

CalSTRS ramps up pressure on diversity and climate

The pension will vote against all-male boards and those not reporting in line with the TCFD

California’s teacher pension fund is the latest big investor planning to crack down on public companies that aren’t moving quickly enough on climate change or to increase their board diversity.

On Wednesday, the more than $318bn California State Teacher’s Retirement System (CalSTRS) announced it would vote against boards if their companies do not report Scope 1 and 2 emissions in accordance with the Task Force on Climate-Related Financial Disclosures.

The pension fund will also vote against entire boards of directors if those boards do not include at least one woman, and against directors on nominating committees for companies that do not have women representing at least 30% of the board, according to the announcement. The same is the case for nominating and governance committee members for Russell 1000 companies that do not publish diversity figures for their boards.

“As a global investor committed to the promise of a secure retirement for California’s public educators, we must act responsibly to ensure corporate directors are accountable for creating long-term value and managing long-term risks,” CalSTRS portfolio manager Aeisha Mastagni said in the announcement.

“We are sending a message that corporate directors must meet high standards in the critical areas of board diversity and climate change. If necessary, we will support a change in leadership to meet these standards.”