California State Teachers’ Retirement System unveiled a roadmap last week to make its investment portfolio net-zero by 2050, in line with the Paris Agreement. The framework involves:
- Developing an action plan to establish a baseline and milestones for managing emissions-related risks; expanding investments in low-carbon solutions; and engaging with companies in the CalSTRS portfolio.
- Establishing actions for the next year to ensure clear internal governance structures; appropriate methodologies to support net-zero commitments; portfolio emissions measurement; and interim goals.
- Providing and encouraging regular reporting on progress towards net-zero investments.
The latest move builds upon an investment thesis the pension adopted last year, whereby risks associated with climate change will have a material impact on the value of CalSTRS’ investment portfolio. In March, the retirement system said it would commit $150 million every year to sustainable PE co-investments in low carbon solutions.