Investment firm CalSTRS assigns manager for a $450 million sustainable equity project
California State Teachers' Retirement System (CalSTRS) has taken a significant step forward in its efforts to combat climate change by partnering with Nordea Asset Management (NAM). This partnership, part of CalSTRS' Sustainable Investment and Stewardship Strategies (SISS) portfolio, will see the pension fund commit 5% of its assets to the partnership.
The investment is in Nordea's Global Stars Equity Strategy, a sustainability-focused approach that aligns closely with CalSTRS' own objectives. Kirsty Jenkinson, investment director at CalSTRS, praised Nordea's role in their stewardship efforts, stating that the strategy's focus on achieving a net zero portfolio by 2050 or sooner is a valuable asset in their mission.
Frank Vang-Jensen, CEO (Vorstandsvorsitzende) of Nordea Asset Management, has been appointed to manage a $450 million sustainability-focused global equity mandate for CalSTRS. The strategy incorporates environmental, social, and governance risk factors, offering an immediate reduction in carbon emissions relative to a benchmark investment.
In addition to the $450m global equity mandate, CalSTRS and Nordea Asset Management are also collaborating on an engagement initiative aimed at encouraging investee companies to join the Oil and Gas Methane 2.0 Partnership. This framework, which CalSTRS has previously invested $2bn in climate solutions offered on the unlisted markets, is a global effort to reduce methane emissions.
Members of the Oil and Gas Methane 2.0 Partnership commit to setting methane emissions targets in line with a 45% reduction by 2025 and 60-75% by 2030. However, it is not specified in the provided paragraph whether CalSTRS has invested in any specific climate solutions offered on the unlisted markets, or whether its commitment to the Oil and Gas Methane 2.0 Partnership has been renewed as part of this collaboration.
The expansion of the SISS portfolio will incorporate more sustainable private market investments. The current carbon footprint of the Global Stars Equity Strategy is 61% below the MSCI ACWI benchmark, demonstrating the strategy's effectiveness in reducing carbon emissions. This partnership with Nordea Asset Management is a significant move in CalSTRS' ongoing efforts to encourage action on climate change.
