CalPERS to work with peer group investors on ESG manager expectations

Global Governance program’s annual review

The California Public Employees Retirement System (CalPERS), at $274.6bn (€204.4bn) the largest US public pension fund, is planning to work with fellow leading investors on their expectations about how asset managers should handle environmental, social and governance (ESG) integration.

Collaborating with members of its ‘Global Peer Exchange’ on ESG manager expectations is a priority for CalPERS’ global governance team, the fund says. The manager expectations work will begin in 2014, according to the fund’s Global Governance annual program review which will be presented to the fund’s Investment Committee next week.

The peer exchange was founded by CalPERS in 2011 and includes 12 of the world’s leading responsible investment institutions.

They are: APG Asset Management, Australian Super, BT Pension Scheme, Florida State Board of Administration, Government Employees Pension Fund, Norges Bank Investment Management, the Ontario Teachers Retirement System, PGGM, Brazil’s Previ, TIAACREF, Universities Superannuation Scheme and RPMI Railpen.

The Global Peer Exchange relationship will be overseen by an ESG integration executive that is currently being recruited to report to Director of Global Governance Anne Simpson, according to an organisation chart in the report.The person will oversee the manager expectations work and CalPERS’ Sustainable Investment Research Initiative.

They will work alongside Bill McGrew (Institutional Relations), Todd Mattley (Principles & Proxy Voting), Financial Market Reform (recruitment in process), Craig Rhines (Corporate Engagement), and Ashley Taylor (Knowledge Management).

Another initiative revealed in the report is a Pilot Certificate in Sustainable Investment with Columbia University and the RFK Center.

Meanwhile, CalPERS has put its weight behind former Shell executive-turned environmental campaigner Ian Dunlop’s bid to join the board of Australian mining giant BHP Billiton. Simpson said: “The single issue of climate change is probably the most important long term systemic risk facing the industry that BHP Billiton’s in and it’s something that is a long term systemic risk for everyone.”
Dunlop has a “broad and impressive record in the industry and there’s tremendous respect for him” Simpson was quoted as saying by Australia’s ABC News. Domestic giant Local Government Super is also voting for Dunlop, the report added, citing LGS’s Chief Executive Peter Lambert.