Shareholder Proposals are Key Risk Tool to Protect NY State Retirees

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Thomas P. DiNapoli, New York State Comptroller

I have a fiduciary duty to invest the fund’s assets prudently and for the exclusive benefit of the System’s more than one million state and local government employees, police officers and firefighters, retirees, and beneficiaries.… As an institutional investor that employs indexing strategies, the shareholder proposal process is an important risk mitigation tool for the Fund. Indexing strategies do not readily lend themselves to selling a company’s stock entirely as a means of mitigating investment risk. Instead, we encourage companies to address material environmental, social and governance (ESG) issues that could jeopardize long-term financial performance. Consistent with its investment philosophy, the Fund files shareholder proposals with public companies in its portfolio regarding ESG factors that can have a material impact on risk and return.

Note: The New York State Common Retirement Fund, with $207.4 billion in assets under management (as of March 31, 2018) is the third largest public pension fund in the United States.