The California State Teachers’ Retirement System (CalSTRS) increased its focus on climate risk disclosure during the 2024 proxy season, voting against boards of directors at a record 2,258 companies – up from 2,035 in 2023. The world’s largest educator-only pension fund voted at more than 10,000 global company meetings, on over 100,000 individual ballot items and 1,200 shareholder proposals – covering topics such as human capital management (including workforce and employee wellness), board governance, and climate-related risks. The pension fund has set out a number of expectations for portfolio companies to effectively manage climate-related risks and opportunities, including: publishing a report on sustainability-related disclosures that align with the International Financial Reporting Standards; disclosing Scope 1 and Scope 2 greenhouse gas (GHG) emissions; and for the highest global emitting companies – including those on the Climate Action 100+ focus list – to set appropriate targets to reduce GHG emissions and reach net zero by 2050. “At CalSTRS, we need consistent, accurate and comparable data from all companies in our portfolio to mitigate risk and accurately measure and reduce emissions,” said Aeisha Mastagni, Senior Portfolio Manager on CalSTRS’ Sustainable Investment and Stewardship Strategies team. “We will continue to use our voice alongside fellow institutional investors to hold companies accountable for climate-related disclosures.” Despite inconsistent levels of climate data disclosure, there was considerable improvement in methane emissions reporting from portfolio companies, CalSTRS said. The pension fund has been calling on eligible companies to join the Oil and Gas Methane Partnership 2.0 (OGMP 2.0) – a UN-led framework committed to the measurement, reporting and mitigation of methane emissions. As a result of CalSTRS-led engagements, ten companies have joined the OGMP 2.0, including ExxonMobil, Chevron, Harbour Energy, OMV and Vital Energy. The International Energy Agency estimates 30% of methane emissions from fossil fuel operations can be abated with no net cost.
