Five of the largest public pension funds in the United States managing over $641 billion in assets are pointedly pushing back on the House Judiciary Committee and Chairman Jim Jordan’s (OH-04) probe into responsible investing.
On July 30, Rep. Jordan sent letters to over 130 U.S.-based companies, retirement systems, and government pension programs inquiring about their ties to Climate Action 100+, a coalition designed to accelerate emission reductions in accordance with the Paris Agreement. As reported in Responsible Investor, the responses from public pension funds make clear that responsible investing is here to stay and is consistent with their fiduciary duties, despite a well-coordinated pressure campaign backed by billionaires from the oil and gas industry to dismantle the investment practice.
Responses from public funds, which were made available under freedom of information laws, include:
CalSTRS
Fund Size: $345 Billion
- CalSTRS said the board views its stewardship role “as that of a catalyst for enhanced management accountability, disclosure and performance at the companies it invests in.”
- The objective of its stewardship efforts, CalSTRS said, is to enhance long-term shareholder returns consistent with its fiduciary duties and that it decides for itself whether and under what circumstances to engage with companies and makes independent investment decisions.
Washington State Investment Board
Fund Size: $203 Billion
- The Washington State Investment Board said in its response that adherence to its statutory fiduciary duties “requires that material risk factors, including ESG impacts, be recognised, and accounted for as part of the investment decision-making process”.
Los Angeles County Employees Retirement Association (LACERA)
Fund Size: $84 Billion
- LACERA said that the fund’s focus “remains steadfast on producing and protecting the returns that fund the benefits promised to our members” despite the “political interests across the spectrum” in questions around the climate and energy transition.
- LACERA produced the longest response of the five funds, reporting in detail on its approach to evolving energy markets and that its fiduciary duties “compel” it to encourage useful market disclosures “that strengthen our position to independently navigate capital market risks and fulfill our mission to produce, protect, and provide the promised benefits to our members.”
Vermont’s Pension Investment Commission (VPIC)
Fund Size: $5.7 Billion
- The response from VPIC, which was copied to the state’s two senators and the governor, said the fund believed climate issues “are as important as other economic risk factors.”
- VPIC went on to explain that it engages companies to better understand how they plan to achieve climate targets or mitigate related risks, and “by organizing as part of CA100+, investors maximize the valuable time companies provide to respond to our requests.”
Seattle City Employee’s Retirement Scheme (SCERS)
Fund Size: $4 Billion
- Executive Director Jeffrey Davis said that decarbonising the real economy would “safeguard its investment portfolio” and that this would be advanced through the fund’s company voting and engagement as well as policy advocacy.
- The fund’s participation in membership groups such as CA100+ was to share information and “pursue ESG priorities of mutual concern.”
Rep. Jordan has long championed the interests of billionaires from the oil and gas industry, and has received more than $250,000 in political contributions from these corporate polluters, according to an Unlocking America’s Future report.
According to recent polling, only 8% of Americans think investigating how companies spend money on ESG issues should be a priority for Congress, and 83% trust companies more than politicians when deciding whether they agree with a company’s stance on an issue, while 63% of voters oppose banning “ESG.”
Learn more about the probe into Climate Action 100+ here.
