1/7/2014 01:44:39 PM

CalSTRS CIO Appointed to UNPRI Board

The ESG-focused initiative has selected Chris Ailman as the seventh member of its advisory committee.

(January 7, 2014) — The CIO of California Sate Teachers’ Retirement System (CalSTRS), Chris Ailman, has been appointed to the association board of the Principles for Responsible Investment Initiative (PRI).

Ailman and six other board members—primarily asset owners from large funds such as PGGM and California's public employee pension—will oversee and advise the United Nations-backed initiative on environmental, social, and governance (ESG) issues.

The PRI operates under the six principles that help investors reach long-term performance targets as well as “align investors with broader objectives of society.”

“CalSTRS, as an asset owner and investor with a global reach, has invested consistent with ESG principles since 1978, making it a natural fit with the PRI ethos,” Ailman said. “As an organization, we were an early signatory to the PRI and are honored to have the opportunity to contribute to this instrumental oversight body to help guide global investment practices toward greater sustainability and thoughtful growth.”

The CIO of the $177 billion fund will serve a three-year term, subject to annual performance reviews, and attend three to four meetings yearly. He was also selected to join the exclusive 300 Club last year.

Ailman’s appointment comes just a few weeks after six Danish pensions decided to leave PRI.

ATP, Industriens Pension, PensionDanmark, PFA Pension, PKA, and Sampension cited governance problems in dumping the ESG-focused investment body.

In a joint statement, the Danish funds said, “the UN-backed PRI have an important role to play in promoting responsible investment—including emphasizing the importance of good governance in companies around the world. We have, nonetheless, over a sustained period of time observed with concern that the governance of the PRI organization does not live up to the basic standards we as investors would expect of the companies in which we invest. Despite numerous attempts to improve the conditions within PRI, we must, unfortunately, acknowledge that these attempts have not been successful.”

PRI’s Managing Director Fiona Reynolds responded in a statement that the organization has plans to review its governance this year: “The PRI is deeply disappointed that this has occurred. The council’s governance committee has already begun to define the scope of this review, which will be led by a new council chair expected to be appointed in early 2014.” 

Related content: Danish Pensions Dump UNPRI over Governance Concerns, Class of 2013 CalSTRS, Power 100 Chris Ailman

Contact the writer of this story:Sage UmSage UmAssistant Editor, aiCIO646-308-2752sum@assetinternational.comFollow on Twitter at @ai_CIO