Investments
At CalPERS, we leverage the DEI Framework and Sustainable Investment Plan to improve investment outcomes. We're working to ensure the public companies we invest in have a level of board diversity reflective of each company's business, customer base, workforce, and society.
Through our corporate engagement process, we advocate for board diversity in terms of skill sets, gender identity, age, nationality, race, sexual orientation, historically under-represented groups, experiences, thoughts, perspectives, and competencies.
With strong partnerships, we provide an asset owner's perspective on the significant questions of the day – congressional testimony, comment letters on proposed pieces of regulation, and commissioned research regarding sustainable investments and human capital management.
Key Highlights
- After engagement, nine companies added at least one diverse director to their boards. Since July 2017, 79% of Russell 3000 companies engaged to add at least one diverse director to their boards (629 of 800 companies).
- Continued partnership with California State Teachers' Retirement System (CalSTRS), Los Angeles County Employees Retirement Association (LACERA), and San Francisco Employees' Retirement System (SFERS) on the California Board Diversity Initiative to improve board diversity at S&P 500 companies regarding underrepresented groups.
- Held directors at the companies we invest in accountable for lack of progress on improving corporate board diversity:
- Voted "against" 768 Nominating/Governance Committee director nominees at companies where staff identified board composition concerns. The previous fiscal year, we voted against 133.
- Voted "for" DEI shareholder proposals on topics surrounding racial equity audits, median gender/racial pay gap, board diversity, and D&I reporting.
- The CalPERS Stewardship Team promoted diversity via engagement and proxy voting activities. The market level statistics for U.S. corporate boards shown below were provided by the Top Governance and Stewardship Issues in 2023 report by Institutional Shareholder Services (ISS):
- Approximately 86% of Russell 3000 Index companies have at least one racially/ethnically diverse board member (excluding S&P 500).
- More than 97% of Russell 3000 have at least one woman director.
- Approximately 99% of S&P 500 companies have at least one racially/ethnically diverse director.
- 100% of S&P have at least one woman director.
- CalPERS allocated $500M each to TPG and GCM Grosvenor. TPG and GCM Grosvenor “will use their long-standing expertise and reputation to identify and cultivate the next generation of investors. Identified investment managers will gain access to the capital, resources, and expertise they need to mitigate business risks and prudently scale their firms in a competitive marketplace."
- CalPERS invested approximately $4.1B with 16 managers that met the definition of "substantially diverse."
- CalPERS invested approximately $1.4B with six managers that met the definition of "emerging managers," across the Private Equity asset class.
- The 2023 DEI Survey of External Managers was a comprehensive DEI Survey of all external investment managers that included questions on harassment, pay equity, disability, recruitment and retention, and diversity across all levels.
- The survey was distributed across 218 asset managers
- 160 managers (73%) responded
- 131 managers (60%) provided highly detailed demographic and policy information
- Across 131 managers that responded, the total workforce was 49,359
- 35.7% were women and 26.4% were people of color
- Of the respondents, nearly one-third of privately held managers (32.4%) were diverse based on CalPERS' definition of "substantially diverse" at 25%
- The survey was distributed across 218 asset managers
