FOR IMMEDIATE RELEASE
September 28, 2016Treasurer Cowell Announces Investment Long-term Stewardship Policy
CHICAGO, IL — State Treasurer Janet Cowell announced this week that she has established a new policy on long-term investment stewardship practices for the North Carolina pension funds and other mandates. The policy, backed by eighteen months of research, addresses long-term stewardship factors (such as environmental, social, and governance considerations) in terms of their impact on performance that they can add and the risks that they can create or mitigate. The policy was shared with the Treasurer’s Investment Advisory Committee last week, and Cowell discussed the new policy at the Pensions & Investments ESG Investing Breakfast Briefing in Chicago.
“Throughout my tenure, we’ve worked to recognize that we are long-term investors for our members and beneficiaries. That means going beyond basic short-term considerations and looking at long-term risks,” Cowell said. “This policy formalizes and codifies best practices and our strategy, which is bottom-up, research-based and investor-driven. We want to take risks into account across all asset classes.
The policy states, “In order to meet our stakeholders’ long-term investment objectives while conservatively managing risk, the Department of State Treasurer believes that “investment processes must incorporate stewardship practices.”
The key components of the policy are:
• Governance: Adopting and advocating well-recognized and sound governance and regulatory principles and policy.
• Global Risks Management: Managing assets with an appropriate cognizance of material long-term economic, environmental, geopolitical, societal, and technological risks and trends.
• Integration: Systematically integrating these governance and long-term risk considerations across portfolio management and corporate governance processes. For example, staff will assess the governance of external investment managers prior to making a recommendation to commit Department of State Treasurer funds.
“I attribute our progress also to managing culture change successfully. Our team has communicated across functions using the right language, collaborated proactively, shared an authentic, bottom-up curiosity, and benefited from several people serving as catalysts,” Cowell said. Read the Long-Term Stewardship Practices policy here
Additionally, the Department is also releasing its 2016 Corporate Governance Report at the Council of Institutional Investors Fall Conference this week in Chicago. Melissa Waller, the Department’s Chief of Staff and Corporate Governance Chair, will be discussing the report at that conference. Read the Corporate Governance Report here
The North Carolina Retirement Systems, the formal name for the pension fund, is the tenth largest public pension fund in the country. It provides retirement benefits and savings for more than 900,000 North Carolinians, including teachers, state employees, firefighters, police officers and other public workers. For more information, visit www.nctreasurer.com.