Formal ESG policy embraced by Teachers of Texas

Expect to see more demand from working class organizations like Teachers Unions, Public Servants and Healthcare workers, as it is they who see the effects of inequity on daily basis.

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Austin, TX: Investment staff of the $193.1 billion Teacher Retirement System of Texas , Austin, received the go-ahead to incorporate an ESG statement into its broad investment policy statement during a board of trustees meeting Friday.

Texas Teachers will join the approximately 70% of large U.S. pension fund that have adopted a stand-alone ESG policy or added ESG language in governing documents, TRS’ analysis of its peer U.S. funds showed, according to board meeting documents.

“The (ESG) statement recognizes that ESG factors can influence the investment portfolio,” said Jase Auby, TRS’ CIO, in an email, adding “TRS will consider ESG factors as it makes decisions consistent with its fiduciary duty to control risk and achieve a long-term rate of return.”

The ESG statement itself notes that “environmental, social and governance factors influence the performance of TRS’s investments. In making investment decisions, the investment management division will consider ESG factors that are material to long-term returns and levels of risk.”

The ESG policy is effective Oct. 1.

The Teacher Retirement System of Texas is a public pension program in the State of Texas. TRS, which was founded in 1937, provides retirement and other benefits to teachers who work for public schools, colleges, and other educational institutions throughout the state.

In November 1936, Texas voters approved a constitutional amendment establishing a statewide teacher retirement system. TRS was formally established in 1937 after passage of enabling legislation. During its first year of operation, more than 38,000 eligible teachers enrolled.At the time, the retirement system was known as the Texas Teachers Retirement System. The name changed in 1956 to reflect TRS’s expanding service area to include retired college professors and school district administrators.

“We are proud of our role in helping more than 825,000 men and women receive benefits that they earned during their years of service to Texas children,” said TRS Executive Director Howard Goldman. “The pension we mail each month represents their life savings and reflects our commitment to making sure that the promises made by the state of Texas are kept.” TRS is one of the largest public retirement systems in the nation.

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ESG: The New Way of Doing Business in Austin, TX

Business and organizational sustainability is a complex issue in Austin, with many stakeholders and perspectives. It’s also an area where the stakes are high – if we don’t get it right, there will be dire consequences for our communities and the planet.

The good news is that more investors are taking notice of mid-size and small cap companies around ESG issues when they invest in Austin companies and organizations. In fact, over the past decade institutional investors have been increasingly incorporating Environmental, Social and Governance factors into their investment decisions. And soon it will be impossible to win any RFP’s without it.

We want everyone (not just big institutions in Austin) to be able to incorporate ESG-related risk into their actions because Companies that don’t adapt to these changes will not survive. This change has many companies in Austin scrambling to figure out how they can stay competitive and be profitable while also contributing to a better future.

ESG The Report is one solution that helps businesses in Austin find their niche in this new landscape by providing information on risks and opportunities related to environmental, social and governance factors affecting them today. Our report offers insights into what investors are looking for from companies in Austin and around the globe. Ask about our ESG Frameworks package to help you get started on making your company, department or organization diverse, equitable and inclusive for all stakeholders.

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