CalSTRS delays disclosure of 2023 emissions data
CalSTRS, the $336.2bn pension fund for Californian teachers has delayed the publication of its latest carbon emissions data, acknowledging inconsistencies in the way it measures climate disclosures.
The fund, which is a leading asset owner member of Climate Action 100+ revealed in its agenda noticed for an upcoming board meeting that it had encountered significant inaccuracies, as first reported by the Financial Times.
Like many other pension funds, CalSTRS calculates its share of a publicly traded company’s emissions based on its ownership of that company in percentage points. One key challenge with that is that valuations of individual companies can chance significantly over time.
CalSTRS said that its ownership levels were being calculated at calendar year end using information provided by its custodian, State Street Bank. However, these year-end debt and equity values and these disclosures were being provided at varying points in time, hence generating significant inconsistencies for emissions calculations, CalSTRS staffers acknowledged.
In addition, the lack of transparency on climate disclosures continues to remain a challenge, a fact that was stressed by CalSTRS’ investment director for its Sustainable Investment and Stewardship Strategies (SISS) in an interview with Net Zero Investor earlier this month. Consequently, the fund’s disclosure efforts are predominantly focused on listed markets.
This comes as the Net Zero Asset Owner Alliance has committed earlier this month to expand emissions reporting targets to private markets within the next five years.
The fund has now opted to delay the publication of its 2023 carbon emission figures to 2025 in order to avoid using corporate emissions data at different points in time. “Going forward, considering the recent SEC climate disclosure rule and the growing acceptance of the International Sustainability Standards Board’s (ISSB) climate disclosure guidance, staff anticipates more robust and timely corporate emissions disclosure that will result in more meaningful emissions measurement” it said.
A CalSTRS spokesperson told Net Zero Investor that the fund will continue to strive for increased climate disclosure in global financial markets while advocating for international sustainability reporting standards. " We are also relentlessly pushing companies to adopt ambitious and thoughtful plans to address climate risks, and working together with like-minded peers to influence businesses, regulators and policymakers, to proactively address specific and systemic risks posed by climate change" they stressed.
CalSTRS' acknowledgement raises the question to what extent other asset owners using a similar methodology to measure their carbon footprint at portfolio level are also facing inconsistent data.
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