Today's guest is Anne Simpson, Director of Board Governance & Strategy at CalPERS. As the largest public pension fund in the U.S. and one of the top ten private investors globally, CalPERS (The California Public Employees’ Retirement System) covers the retirement and health benefits of California’s public employees, which include firefighters, janitors, teachers, among many other workers. Public employees, with some support from their employers, pay into those benefits and have contributed to a fund which has grown to $400 billion to date. Of the $24 billion paid annually to pensioners, 60 cents of every dollar comes from investment returns, making it critically important that CalPERS makes sound investment decisions and mitigates risk in its portfolio. Anne’s career at CalPERS spans over a decade, beginning as a Senior Portfolio Manager of Global Equity. She went on to become the Investment Director of Sustainability, overseeing CalPERS’ ESG strategy across a $330 billion fund. In her current role, she ensures governance among the boards of CalPERS’ portfolio aligns with the strategic priorities set forth in its “Pension Beliefs.” It was great speaking with Anne who was able to articulate the impact large shareholders have on corporations and their governance, as it relates to the fight on climate change. It was also fascinating to hear how a fund, taking investment positions with a hundred-year time horizon, feels the urgency of addressing climate risks in its portfolio today. I hope you enjoy Anne’s deep perspective. Enjoy the show! You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.

In today’s episode, we cover:

• What is CalPERS, its origins and its mission?
• How its priorities and concerns about climate change is rooted in its fiduciary responsibility to pensioners current and future
• Anne’s career at CalPERS and early work focusing on corporate governance
• What CalPERS learned from the 2008 financial crisis and how it informs its perspective and priorities regarding climate change
• CalPERS’ ten “Pension Beliefs” that define its investment strategy
• How being a longterm investor is both an advantage and a responsibility
• Avoiding the curse of short-termism and how simply following the money isn’t sufficient
• How CalPERS views types of capital beyond the financial
• How Anne developed a strategy for sustainable investment
• CalPERS’ top three sustainability factors (diversity & inclusion, demographics and climate change)
• The role CalPERS plays as a climate change advocate
• How it leverages its shareholder position to influence companies to be in accord with The Paris Agreement
• Research done to better understand the portfolio’s contributions to emissions
• Work performed to assess climate-risk among CalPERS’ assets
• The fund’s emissions commitments over the next thirty years
• The double-edged sword of divesting from companies not meeting climate goals

Links to topics discussed in this episode:

• CalPERS: https://www.calpers.ca.gov/
• CalPERS Pension Beliefs: 01.pdf">https://www.calpers.ca.gov/docs/board-agendas/201702/pension/item7-01.pdf
• Climate Action 100+: http://www.climateaction100.org/
• The Investor Agenda: https://theinvestoragenda.org/

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• Cody Simms X / LinkedIn
• MCJ Podcast / Collective / YouTube

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