CalPERS Investment Policy a Victory for People and the PlanetYears-long campaign by Friends of the Earth pushes agency to prioritize human rights, environmental protection in its new investment policy
SAN FRANCISCO – The California Public Employees’ Retirement System quietly approved extensive revisions to its Governance and Sustainability Principles last month, aimed at recognizing and addressing the material risks associated with ecosystem degradation. CalPERS, the largest public pension in the U.S with $356 billion in assets under management, included the revisions as part of its new Total Fund Policy.
CalPERS has broad exposure to virtually every industry — including some of the most environmentally and socially destructive industries on earth. For a number of years, Friends of the Earth has lead the charge to make CalPERS aware of the material risks associated with tropical deforestation through the fund’s exposure to industries such as palm oil, timber, pulp and paper, soy, cattle, and rubber.
Under the new policy, CalPERS will become the first large asset manager in the U.S., public or private, to formally recognize that deforestation and ecosystem degradation pose material investment risks; the first to acknowledge “land rights” as an issue requiring disclosure by companies; and the first to ask companies how they will manage a “just transition” for workers. The policy also leads the way in giving CalPERS a mandate to ask investee companies for disclosures on supply chain traceability — a crucial issue that has ramifications for everything from abusive palm oil sourcing to human trafficking.
Jeff Conant, Senior International Forests Program Director for Friends of the Earth, issued the following statement in response to the new policy:
CalPERS’s new policy is precedent setting. It sends a signal to all the companies in CalPERS’s portfolios that they need to seriously account for their impacts to human rights and the environment. It should also send a signal to other large asset managers that responsible investors can and should be responsible stewards of our environment.
CalPERS now has a clear mandate to engage with the palm oil, timber, pulp and paper, soy, cattle, and rubber companies it owns to drive back their intrinsic harms. We look forward to seeing CalPERS implement the policy fully and effectively, and take corrective action against companies that fail to adequately manage environmental, human rights, and governance risks.
Communications contact: Erin Jensen, (202) 222-0722, [email protected]