CalSTRS staff made its annual progress report on efforts to achieve a pledge by the Teachers’ Retirement Board to achieve net zero greenhouse gas emissions across the investment portfolio by 2050, or sooner.   

Through its net zero portfolio emissions pledge, CalSTRS aims to mitigate risk posed to the portfolio’s long-term resilience by climate change and related economic shifts—and to improve long-term, risk-adjusted returns. Both goals support CalSTRS’ fiduciary duty to its members.  

A ‘net zero portfolio’ is one where the amount of emissions generated is offset by an equal number of emissions removed, using natural or technological solutions. 

CalSTRS is implementing three core strategies to support its net zero portfolio emissions pledge: 

1. Measuring and reducing portfolio emissions;
2. Increasing low-carbon investments in line with portfolio risk-return goals; and
3. Influencing policymakers, companies and financial markets to speed the global low-carbon transition.

CalSTRS reported progress to the board in each area, including: 

• As of February 2025, $29.7 billion or 20.5% of the Global Equity Portfolio is being managed internally against a low-carbon index, reducing portfolio emissions. 

• The Sustainable Investment and Stewardship Strategies Private Portfolio has expanded investments in low-carbon solutions, committing approximately $2.9 billion to date across a broad risk-return spectrum. This enables CalSTRS to take advantage of attractive investment opportunities in new and emerging climate solutions across private markets. Other private asset classes are also increasing their exposure to low-carbon solutions.  

• CalSTRS is engaging with companies and policymakers, using its influence as a significant global investor to mitigate climate risk and drive sustainable business practices and returns.  

• Staff has influenced multiple portfolio companies to join the Oil & Gas Methane Partnership 2.0, a United Nations Environment Program initiative that requires member companies to measure their methane emissions and set emissions reduction targets in cost-effective ways.  

• Staff’s presentation highlighted that while current regulatory and political conditions – particularly in the U.S. – are creating some headwinds for CalSTRS, to achieve its net zero goals, there are areas of tangible progress. For example, many companies are still managing material climate risks and investing in climate solutions to increase efficiency and maintain a competitive edge, while supporting the global economy’s transition to net zero. 

CalSTRS remains committed to protecting members’ financial future through its net zero pledge to measure portfolio emissions, engage high emitters and increase investments in low-carbon solutions.