CalSTRS has initiated a new coalition with Dutch pension manager APG Asset Management and global investors with a total of $3 trillion in assets to increase oversight and hold company boards accountable for how employees are treated.
CalSTRS officials began discussing employee health and safety issues at companies in their portfolios earlier with other asset owners. In May, they formed the "Pandemic Resilient – 50" through a partnership with Principles for Responsible Investment and €536 billion ($627.9 billion) APG, Heerlen, Netherlands.
The $257.9 billion California State Teachers' Retirement System, West Sacramento, and the rest of the coalition aim to increase oversight of human capital management with a focus on boards' oversight of business continuity, including contingency planning; employee health and well-being; and capital allocation, which includes executive compensation and share repurchases.
The pandemic has shone a spotlight on human capital management, said Aeisha Mastagni, portfolio manager with CalSTRS' sustainable investment and stewardship strategies unit at the Oct. 15 board meeting.
The pandemic will subside but coalition members do not want the importance of managing company employees to fade away, Ms. Mastagni said. The coalition's engagement efforts will be a "fact-finding mission" to understand whether boards have the right plans in place.
Company boards should also take steps to ensure financial alignment with employees. For instance, are there big layoffs at companies where top executives are still pocketing large bonuses, she said. Potential actions by coalition members include votes against board members or votes on shareholder proposals.