CalSTRS CIO: new derivatives needed to hedge ESG risks

Second-largest US pension fund has also reduced fixed income allocation to 12% as rates have fallen

CalSTRS-seeks-ESG-hedging-tool montage

More advanced derivatives are needed to hedge environmental, social and governance risks, so investors can move away from “binary” buy-or-sell choices, says the chief investment officer of the second-largest US pension fund, the California State Teachers’ Retirement System.

Christopher Ailman, CIO of CalSTRS, says the fund has struggled to find “good tools” to hedge ESG risks in its $263 billion portfolio.

“I have looked at specific ESG risks, where we had exposure to companies that made a

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here