Proxy Access, Climate Risk Reporting, and Diversity Top CalPERS’ List of Corporate Engagement in 2016

The California Public Employees’ Retirement System (CalPERS) today laid out its corporate engagement plans for 2016, with proxy access, climate risk reporting, and diversity at the top of the list. CalPERS invests in more than 10,000 public companies worldwide, and uses its proxy voting rights at those companies to effect changes in line with its Investment Beliefs.

"As a long-term shareowner, CalPERS has a duty to ensure that the companies we invest in on behalf of our members are well managed for sustained, long-term success," said Ted Eliopoulos, CalPERS Chief Investment Officer. "I commend the Global Governance team on a successful 2015 and am confident they will produce similar results in 2016."

Plans for 2016 use environmental, social, and governance (ESG) factors as a framework. Environmental factors will focus on the impact of climate change on business operations; social factors include human capital practices influencing corporate board effectiveness; and governance factors will address alignment of interest issues between companies and their shareowners.

Specific strategic priorities continue to include proxy access and climate risk reporting, with corporate board diversity added this year. Proxy Access helps to ensure that corporate boards are independent, competent, diverse, and accountable by allowing shareowners to nominate candidates for the board. Climate risk reporting calls on oil and gas companies to assess, disclose, and take action to address the risk and opportunities posed by climate change. Corporate board diversity helps ensure board effectiveness and fights against group-think by incorporating members with different backgrounds, experiences, and skills.

In 2015, CalPERS voted at 11,648 annual meetings, in more than 47 global markets. Additionally, CalPERS’ Global Governance staff engaged directly with more than 1,000 companies on issues of importance. Strategic priorities during the year included advocating for proxy access and climate risk reporting.

Notable efforts from 2015 included the passage of a CalPERS proposal to require Kohl’s to adopt proxy access, the support of a proposal to require oil giant BP to expand their reporting on climate change risks, and voting to adopt a pay-for-performance bonus plan at Domino’s Pizza.