Updated with correction
Three large asset owners on Tuesday released a statement urging companies and money managers to embrace a long-term approach to value creation and consider the impacts of their businesses on employees, society and the environment.
The $252.4 billion California State Teachers' Retirement System, West Sacramento; Japan's ¥159.2 trillion ($1.4 trillion) Government Pension Investment Fund, Tokyo; and USS Investment Management, which manages the £68 billion ($88.1 billion) Universities Superannuation Scheme, London, said plans are responsible for providing post-retirement financial security for their members, and if they focused on short-term returns they would be ignoring systemic risks to their portfolios such as climate change.
"Companies that seek to maximize corporate revenue without considering their impacts on other stakeholders — including the environment, workers and communities — put their long-term growth at risk and are not attractive investment targets for us," the statement said.
Likewise, the three asset owners said in the statement that they prefer to build and maintain relationships with money managers that integrate ESG factors throughout their entire investment process, vote according to the mandate to which they have pledged and are transparent with investors about their level of corporate engagement.
They urged money managers to enhance their disclosures using frameworks such as the Task Force on Climate-related Financial Disclosures regarding their interactions with stakeholders, society and the environment.
"Companies and asset managers who commit to sustainable value creation are not injecting politics into business, nor are they 'virtue signaling,'" the statement said. "They are fulfilling their duty to us."