A conversation with CalSTRS’ Christopher Ailman on ESG

Climate change has added urgency to investors’ efforts regarding environmental, social and governance (ESG) factors. The $230 billion California State Teachers’ Retirement System (CalSTRS) has been at the forefront of addressing such issues, adopting an investment policy to mitigate ESG risks in 2008. Recently, Christopher Ailman, CIO of CalSTRS, spoke with Loretta Clodfelter, editor of Institutional Real Estate Americas, about the system’s sustainability endeavors. The following is an edited transcript of their conversation.

Could you tell me a little bit about CalSTRS’ program of low-carbon emission investing and also the system’s broader efforts regarding sustainability?

Do you have three hours? We have been at E, S and G since before we used that acronym. To give you a little history, you can go back to the mid-1970s; this fund had a social investment policy way back then. Social issues tend to be more sporadic