Energy Efficiency, GHG Emissions  -  September 6, 2022

CalSTRS’ Board Sets 2030 Goals

The Teachers’ Retirement Board in California authorized a package of investment actions to enhance its efforts to achieve a net zero investment portfolio, address climate change and support the retirement security of the state's public school teachers.

The board, which governs the California State Teachers’ Retirement System (CalSTRS), took a step in advancing its pledge from last summer to achieve a net zero emissions portfolio by 2050 or sooner and also approved implementing a total fund plan and set four initial measures for integrating the net zero strategy across the portfolio with a specific focus on emissions reductions.

The goals include reducing GHG emissions across the investment portfolio by 50% by 2030, adopting processes to incorporate GHG emissions into investment decisions as part of traditional risk-and-return analyses and their potential impacts on the CalSTRS Funding Plan, targeting a 20% allocation of the public equity portfolio to a low-carbon index to significantly reduce portfolio emissions while managing active risk and incorporating future climate-related scenarios into CalSTRS’ asset-liability modeling framework to help guide CalSTRS’ investment allocations.

These actions reflect increasing momentum toward achieving a net zero economy. CalSTRS will review its net zero goals and strategy annually to adjust for the latest available data, market fluctuations and related scientific advancements.

“CalSTRS’ net zero pledge is rooted in its century-long promise to deliver a secure retirement for California’s hard-working educators and their families,” said Board Chair Harry Keiley in a statement. “Taking these interim actions to reduce emissions in our portfolio is a profound step forward and underscores our commitment to considering the impacts of climate change fully and systematically as we manage our fund on every level.”