CalPERS plans to more than double the number of companies in its equity portfolio that it will hold accountable for reducing greenhouse gas emissions to 350 from 165, said Drew Hambly, investment director and head of corporate governance, at Monday’s investment committee meeting.
In the past, the $457.4 billion California Public Employees' Retirement System, Sacramento, has called on companies highlighted by investor group Climate Action 100 Plus, a coalition of 700 global investors who seek to ensure the world's largest corporate greenhouse gas emitters take action to combat climate change.
In the 2022 proxy season, of the 165 companies on the Climate Action 100 Plus' list, CalPERS voted against 95 directors at 26 Climate Action 100 Plus companies for climate risk oversight issues, staff reported to the investment committee on Monday.
Mr. Hambly said that in preparation for the 2023 proxy season, staff reviewed CalPERS' $210.1 billion equity portfolio for the highest greenhouse gas emitting companies and will be approaching the 350 highest emitting companies in its portfolio.
"I believe nearly 80 to 85% of our emissions come from about 350 equity companies in the portfolio," Mr. Hambly said.
CalPERS officials will be talking to these companies based on a framework that includes factors such as terms of emissions disclosure and board oversight, he explained.
"Where we don't observe those at these companies we will vote against the board members directly responsible, whichever committee should have oversight of climate risk," Mr. Hambly said.