CalSTRS mulls engagement on water, extractives and agriculture

Giant California teachers’ fund to ramp up governance

CalSTRS, the $132bn California State Teachers’ Retirement System, plans to consider new areas of shareholder engagement in the water, extractives and agriculture sectors.

The fund’s business plan – to be presented at a meeting this week – calls for the corporate governance team to “consider new areas of engagement (water, extractives, agriculture)”.

The fund will also consider new data service providers who can provide “more relevant information” on sustainability issues. And it vows to use existing tools such as the UN Principles for Responsible Investment network and clearing house more often to build support for sustainability issues.

Another aim is to seek out corporate governance managers in markets such as Asia that are not currently covered – as well as seeking more favourable terms from existing and new managers.

CalSTRS has a $3bn corporate governance portfolio,comprising 87% US equity and 13% international equity. It has six external managers for the programme.

Another planned enhancement would be the launch of a California Corporate Governance website. This would establish a coalition of Californian pension funds aimed at promoting best practices in corporate governance.

CalSTRS is currently establishing an infrastructure so that its private equity operations comply with the UNPRI requirements.

CalSTRS launched a search earlier this year for a proxy voting system – and it says it will use this new platform in the new fiscal year to free up staff time for “more targeted work”. It plans to get agreement from its proxy voting services “to allow for all CalSTRS proxies to be voted in house”.

Last month CalSTRS joined with other investors to sue US mining firm Massey Energy Co.