CalPERS Investment Policy
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Global Principles of Accountable Corporate Governance
Updated September 12, 2011
Section B. Domestic Principles of Accountable Corporate Governance (US)
6 Corporate Responsibility1
Shareowners can be instrumental in encouraging responsible corporate citizenship. CalPERS believes that environmental, social, and corporate governance issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, and asset classes through time.) Therefore, CalPERS joined 19 other institutional investors from 12 countries to develop and become a signatory to The Principles for Responsible Investment (Appendix D).2
CalPERS expects companies whose equity securities are held in the Fund's portfolio to conduct themselves with propriety and with a view toward responsible corporate conduct. If any improper practices come into being, companies should move decisively to eliminate such practices and affect adequate controls to prevent recurrence. A level of performance above minimum adherence to the law is generally expected. To further these goals, in September 1999 the CalPERS Board adopted the Global Sullivan Principles of Corporate Social Responsibility.
CalPERS believes that boards that strive for active cooperation between corporations and stakeholders will be most likely to create wealth, employment and sustainable economies. With adequate, accurate and timely data disclosure of environmental, social, and governance practices, shareowners are able to more effectively make investment decisions by taking into account those practices of the companies in which the Fund invests. Therefore, CalPERS recommends that:
6.1 Human Rights Violations: Corporations adopt maximum progressive practices toward the elimination of human rights violations in all countries or environments in which the company operates. Adherence to a formal set of principles such as those exemplified in Appendix E, the Global Sullivan Principles, or the human rights and labor standards principles exemplified in Appendix F by the United Nations Global Compact3, is recommended.
(Editor's Note: Footnote references & corresponding footnotes that are not relevant to this issue have been omitted.)
2 Appendix D references the six UN Principles for Responsible Investment that commit investors to incorporate environmental, social, and corporate governance into investment analysis and decision-making processes; ownership policies and practices; and to seek appropriate disclosures on ESG issues by the entities in which they invest. (return to text)
3 Appendix F references the ten principles of the United Nations Global Contact in the areas of human rights, labor, the environment and anti-corruption. Principles 1 and 2 on human rights asks companies to support and respect the protection of internationally proclaimed human rights; and make sure that they are not complicit in human rights abuses. (return to text)