The California State Teachers' Retirement System (CalSTRS), one of the world’s largest public pension plans, has selected Nordea Asset Management’s (NAM) Global Stars Equity Strategy to manage US$450 million in global equity investments.

The Global Stars Equity Strategy is managed by NAM’s fundamental equities team, which is responsible for the firm’s ESG Stars equity family and sustainable thematic range.

The team employs a sustainability-focused approach that integrates environmental, social and governance (ESG) risk factors into all fundamental investment decisions, and works hand-in-hand with NAM’s responsible investments team, one of the largest and longest-standing in Europe.

This close collaboration ensures that companies are assessed for their contributions to ESG objectives alongside traditional financial criteria. In addition to full ESG integration, all of NAM’s ESG Stars equity strategies are aligned with net-zero goals to help investors decarbonize their portfolios.

The Global Stars Equity Strategy offers investors an immediate reduction in carbon emissions relative to a benchmark investment – its carbon footprint is currently 61% below the MSCI All Country World Index (ACWI) benchmark.

“We are honoured to have been selected by CalSTRS to manage a portion of its sustainability-focused equity portfolio through our Global Stars Equity Strategy. For over three decades, we have been successfully developing solutions designed to deliver attractive long-term returns while bringing about positive impact. Sustainable investment is an essential part of our Nordic DNA, and we look forward to supporting CalSTRS with our distinct investment approach to deliver returns with responsibility,” says NAM chief executive officer Nils Bolmstrand.

CalSTRS investment director Kirsty Jenkinson adds: “The sustainability-focused approach of the Global Stars Equity Strategy aligns closely with the mandate of the Sustainable Investment and Stewardship Strategies Portfolio. Additionally, Nordea has been a valuable partner in our stewardship efforts focused on meeting our pledge to achieve a net-zero portfolio by 2050 or sooner.”

Since July 2023, CalSTRS has partnered with NAM on a critical engagement initiative aimed at encouraging investee companies to join the Oil and Gas Methane Partnership 2.0 (OGMP 2.0), a key framework to reduce global methane emissions. OGMP 2.0 member companies commit to set methane emissions targets in line with a 45% reduction by 2025 and 60-75% by 2030. To date, 14 of 65 target companies have adopted the OGMP 2.0 framework after engagement by investors participating in the Engagement Initiative, which includes 17 asset owners, one asset manager and one investment adviser, representing over €3.7 trillion (US$4.08 trillion) in assets under management.

As an early signatory to Net Zero Asset Managers Initiative, NAM supports the goal of net-zero greenhouse gas emissions by 2050 or sooner.