CalSTRS in the 2023 proxy season voted against the boards of directors at a record 2,035 global companies that did not provide necessary climate risk disclosures, the West Sacramento-based pension fund reported on Thursday.
CalSTRS voted against the boards of directors of many industries this year, including steel producers, transportation companies, and metal and mining companies, the $315.6 billion California State Teachers' Retirement System said in a news release.
In this year's proxy season, CalSTRS voted against each of the directors on the boards of the largest 5,000 global companies, up from 1,900 the prior year's proxy season, that had not disclosed what CalSTRS considers the floor of emissions disclosures, Task Force on Climate-Related Financial Disclosures, said Aeisha Mastagni, a portfolio manager on CalSTRS' sustainable investment and stewardship strategies team.
"This is aligned with CalSTRS goal to get to net zero by 2050 or sooner" in its own portfolio, Ms. Mastagni said. If companies fail to disclose, it inhibits CalSTRS' ability to achieve its goal, she said.
Companies cannot be held accountable for reducing their greenhouse gas emissions without basic climate risk disclosures, Ms. Mastagni said.
In March 2022, CalSTRS adopted a new approach to corporate engagement in which it, among other things, said it would vote against directors of the largest global companies for failure to publish a climate change report aligned with Task Force on Climate-Related Financial Disclosures and for failure to disclose, at a minimum, Scope 1 (direct emissions) and Scope 2 emissions (indirect emissions). CalSTRS also said it would vote against directors of the highest global emitters if they have not: published a TCFD-aligned report, disclosed Scope 1 and 2 emissions, and set appropriate targets to reduce greenhouse gas emissions.
At the same time, CalSTRS said it would vote against entire boards that do not include at least one woman and against a board's nominating and governance committee if at least 30% of its board members are not women.
CalSTRS voted against 3,401 companies for having less than 30% gender diversity in the 2023 proxy season, Ms. Mastagni said.