Climate Change Data

Environmental Metrics

ESG Focus Areas

• Retirement Preparedness
• Cybersecurity
• Sustainability-Related Investment Risk
• Organizational Transparency
• Ethics and Compliance
• Workforce Development, Employee Engagement, and Diversity and Inclusion

Environmental Achievements

• Reduced electricity consumption by 9% from 2015-16 to 2016-17; achieved an annual savings of 211,364 kwh and $42,109 in the data center through energy improvements.
• Diverted more than 90 percent of West Sacramento Headquarters waste from landfills.
• Achieved Zero Waste Certification at the Gold level for successfully diverting more than 95 percent of office waste from landfills.

Social Achievements

• Launched a diversity and inclusion training pilot program.
• 77 percent of leadership appointments were internally sourced.
• Improved employee engagement, with 54% of members engaged in 2017.

Governance Achievements

• Developed a pioneering investment cost-reporting standard.
• Developed a compliance program and hired a compliance director.
• Implemented the Center for Internet Security’s 20 Critical Security Controls.

Climate Goals & Targets

Environmental Challenges

• Potential for financial market volatility and its long-term impact on the sustained growth of the fund.
• Cybersecurity threats.
• Risk of knowledge loss due to turnover and retirements.

Mitigation Strategies

• Implemented AB 1469, a plan to fully fund CalSTRS by 2046.
• Strengthened cybersecurity posture through regular reporting to the board, employee training, and third-party assessments.
• Implemented strategies for retention, knowledge transfer, learning and development, and succession planning.

Supply Chain Management

Supplier Audits: Annual survey of contractors with contracts valued at or above $50,000; approximately 30% response rate.

Responsible Procurement

• Environmental and social-based standards for all contracted business services, including anti-discrimination clauses, human rights regulations, and fair labor and environmental compliances.
• Environmentally preferred purchasing

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G4 Guidelines Core option

Certifications: LEED Platinum for Existing Building, Operations and Maintenance, Zero Waste Certification at the Gold level

Third-party Assurance: Internal Audit staff performed an independent and objective review.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting
• National Coalition of 100 Black Women Leadership in Business Award
• Chief Investment Officer magazine Forty Under Forty
• Pensions and Investments magazine Best Places to Work in Money Management
• Industry Innovation Award for Responsible Investing
• The William F. Sharpe Indexing Achievement Awards
• California Association of Public Information Officials Award of Excellence
• Telly Awards Bronze Award

Environmental Metrics

ESG Focus Areas

• Member retirement education
• CalSTRS Funding Plan progress
• Transition to net zero
• Diversity, equity and inclusion

Environmental Achievements

• Met and exceeded the goal to reduce scope 1 and 2 combined emissions 20% by 2020 against a 2010 baseline each year since 2016.
• CalSTRS’ Headquarters building in West Sacramento is LEED v4.1 Operations and Maintenance Platinum certified.
• Received an Energy Star rating of 100 out of 100 in 2021 and a TRUE Certification for waste diversion.

Social Achievements

• 68% of respondents in the 2021 Annual Member Survey reported being satisfied or completely satisfied with CalSTRS services (2% increase over 2020).
• Hosted 15 Getting Deep webinars on diversity and inclusion topics.
• Named LaShae Badelita as its first investment diversity officer.

Governance Achievements

• Adopted a pledge to achieve net zero greenhouse gas emissions across the CalSTRS Investment Portfolio by 2050 or sooner.
• Supported activist investment manager Engine No. 1 in electing alternate directors to the ExxonMobil board.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacted member service retirements and scheduling/cost impacts for multiyear projects.
• Uncertainty of the COVID-19 pandemic presents challenges when trying to predict member retirement patterns.

Mitigation Strategies

• Adapted strategy to continue providing member benefits on time while supporting employees.
• Hosted webinars, held online group benefits planning sessions, and increased individual benefits planning sessions.
• Offered expanded online services and implemented more paperless processes and member transactions.
• Implemented multifactor authentication and enhanced monitoring of systems and third-party services.
• Replaced legacy security software with cloud-based management and protection.

Supply Chain Management

Responsible Procurement

• Environmentally preferred purchasing

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: CalSTRS Internal Audit Services team (limited assurance)

Environmental Metrics

ESG Focus Areas

• Economic impact
• Environmental impact
• Social impact

Environmental Achievements

• Reduced enterprise scope 1 and 2 emissions relative to the previous year (though net emissions were higher due to fewer renewable energy certificates purchased)
• CalSTRS Headquarters recertified as LEED v4.1 Operations and Maintenance Platinum
• Received WELL Health-Safety Rating for Facility Operations and Management

Social Achievements

• Completed a mission-critical succession planning initiative
• Developed training and tools for remote workforce
• Engaged 50% more young members (44 and younger) at new educator events and financial awareness workshops compared to the previous year

Governance Achievements

• Increased automated management of cybersecurity
• Implemented a governance, risk and compliance product to automate information-security risk assessments
• All employees complete mandatory security training annually

Climate Goals & Targets

Environmental Challenges

• Transition to hybrid work model
• Growing staffing needs due to technological system modifications and increased in-house asset management
• Uncertainty around inflation, investment markets and payroll growth impacting ability to meet long-term actuarial assumptions

Mitigation Strategies

• Developed training and tools for remote workforce
• Mission-critical succession planning initiative
• Continual monitoring of funding levels, trends in education and member demographics, and actuarial assumptions

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Environmentally preferred purchasing (51% in FY 2021-22)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: LEED v4.1 Operations and Maintenance Platinum, WELL Health-Safety Rating

Third-party Assurance: CalSTRS Internal Audit Services team (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Economic impact
• Environmental impact
• Social impact

Environmental Achievements

• West Sacramento headquarters recertified as LEED v4.1 Operations and Maintenance Platinum
• Maintains WELL Health-Safety Rating for Facility Operations and Management
• Energy Star rating of 98 out of 100

Social Achievements

• Published CalSTRS Workforce Plan 2022–25
• Reduction in time to fill vacancies and increased quality of hires
• Defined equity within CalSTRS

Governance Achievements

• Achieved 74.4% funded status in the Defined Benefit Program (as of June 30, 2022)
• Implemented Investment Policy for Mitigating ESG Risks
• Annual total compensation ratio of 18:1 for the 2022 calendar year

Climate Goals & Targets

Environmental Challenges

• Climate change impacting the CalSTRS Investment Portfolio
• Maintaining a financially sound trust fund
• Cybersecurity threats

Mitigation Strategies

• Net zero greenhouse gas emissions pledge by 2050 or sooner
• CalSTRS Funding Plan to achieve full funding by 2046
• Ongoing security assessments, simulated cyberattacks, and employee security training

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Environmentally preferred purchasing (79% in FY 2022-23)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards

Certifications: LEED v4.1 Operations and Maintenance Platinum (Headquarters)

Third-party Assurance: CalSTRS Internal Audit Services team (limited assurance)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Corporate and Market Accountability
• Net Zero Transition
• Workforce and Communities

Environmental Achievements

• Advocated for adoption of ISSB S1 and S2 disclosure standards by countries representing 25% of global GDP and 37% of global emissions.
• 10 companies joined the Oil and Gas Methane Partnership 2.0 (OGMP 2.0) due to CalSTRS-led engagements.
• Significant progress within Climate Action 100+ focus companies: 77% committed to net-zero by 2050 or sooner, 93% have board committee oversight of climate risks, 90% aligned disclosures with TCFD framework.

Social Achievements

• California investor coalition engaged 52 companies, leading to the appointment of 19 directors of diverse backgrounds.
• Support for the Investor Mining and Tailings Safety Initiative resulted in the creation of the Global Industry Standard on Tailings Management (GISTM), with 77 companies committing to implement it.
• Engaging companies on diversity, equity, and inclusion (DEI) to understand rollbacks of commitments and support best practices.

Governance Achievements

• Advocated for the SEC's landmark climate-related disclosure rule, referenced nearly 70 times in the final rule.
• Continued proxy voting focus on climate risk, voting against the boards of 2,258 companies in 2024.
• Joined Nature Action 100 to support greater corporate ambition and action on reversing nature and biodiversity loss.

Climate Goals & Targets

Environmental Challenges

• Legal challenges to the SEC's climate-related disclosure rule.
• Companies failing to provide minimum levels of climate risk disclosure or set greenhouse gas emissions reduction targets.
• Companies rolling back public commitments related to diversity, equity, and inclusion.

Mitigation Strategies

• Closely monitoring the progress of the SEC rule and remaining committed to supporting corporate climate-related disclosures.
• Engaging companies to improve climate risk disclosure and set emissions reduction targets.
• Engaging in open dialogue with companies to understand and address rollbacks of DEI commitments.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISSB S1, ISSB S2, TCFD