Corporate Governance

The New York State Common Retirement Fund’s Corporate Governance Program supports and facilitates the integration of environmental, social and governance (ESG) into the Fund’s investments process.

New York State Common Retirement Fund’s ESG Investment Philosophy

We consider environmental, social and governance factors in our investment process because they can influence both risks and returns.

By promoting sound ESG practices at its portfolio companies and investment managers, the Program works to enhance and protect the Fund’s long-term value for the 1.1 million members, retirees and beneficiaries of the New York State and Local Retirement System who rely on it for retirement security.

Comptroller DiNapoli uses his voice as a major investor to improve corporate policies and practices, consistent with his fiduciary duty, at the Fund’s portfolio companies by:

Direct communication with corporations through letters and meetings;
Shareholder proposals asking corporate boards to address specific issues; and
Votes on board directors and shareholder proposals at companies’ annual investors meetings.

The Comptroller’s Program also evaluates the ESG policies and practices of the Fund’s investment managers’ to assess the full scope of investment risks and opportunities. When it comes to ESG issues, the Fund focuses on three key issues:

Taking Action on Climate Change

Comptroller DiNapoli has long believed environmental issues, including climate risks and opportunities, natural resource and raw material usage, and pollution and waste management, can impact the long-term value of the Fund’s investments.

Comptroller DiNapoli's Climate Action Plan promotes sustainable corporate practices in response to short- and long-term environmental issues. The Comptroller has also set 2040 as the Fund’s net zero carbon emissions target. Because of his efforts, the Asset Owners Disclosure Project (AODP) has ranked the Fund as third in the world and first in the U.S. among public funds in addressing climate change-related investment risks and opportunities.

To learn more about the Comptroller’s efforts to address climate risk and invest in climate solutions, see Leading the Way on Climate Investment.

Promoting Diversity and Protecting Workers

Diversity, Equity and Inclusion

The Fund has long regarded diversity as a critical measure of sound corporate governance, as research has shown that the ability to draw on a wide range of perspectives and experiences is a vital component of a company’s sustained success in the global marketplace. Additionally, companies that ensure diverse talent and strengthen equity and inclusion in their workforce increase their likelihood of performing well financially. Comptroller DiNapoli actively advocates for diversity, inclusion and non-discrimination in the boardroom and workplace by taking actions that include:

Seeking voluntary disclosure of corporations’ federally-mandated reports on workforce and executive makeup, including data on compensation, ethnicity and gender. Recommending independent audits of companies’ efforts to promote civil rights, racial equity, inclusion and diversity in their workplaces. Aligning executives’ performance-based compensation with their company’s success in upholding ESG considerations, including the rights and well-being of the company’s workforce.

Human Capital and Labor Management

The Fund believes that the ability to establish and maintain constructive relationships with workers and the communities in which they operate is a hallmark of a company with a sound, sustainable and profitable long-term strategy. Because a company’s workforce is one of their most important assets, the Comptroller regularly encourages portfolio companies to implement robust human capital practices that allow them to recruit, retain, and promote high quality talent. Additionally, the Comptroller encourages companies to adopt strong worker protections, including health and safety, and respect for labor rights.

Urging public companies in the Fund’s portfolio to formally consider diversity of sex, race, ethnicity, sexual orientation and gender identity when selecting board director candidates.
Voting against incumbent board directors at companies that have no racially or ethnically diverse directors or women on their board.
Encouraging board directors to amend corporate equal employment opportunity policies to include explicit bans on discrimination based on sexual orientation and gender identity.
Pressing companies to report on their commitments to including people with disabilities across their workforces. Companies need strong policies to ensure their workforces are inclusive of people with disabilities or they risk missing out on an enormous pool of talented employees.

Demanding Corporate Accountability

The Fund has long supported robust governance practices at its portfolio companies that promote well-run companies with clear accountability structures. Additionally, the Fund expects all companies to fully disclose their risks, risk oversight practices, board governance structures and procedures, and corporate and capital allocation strategies.

Executive Compensation

Executive compensation should be transparent and tightly tied to long-term performance. When a corporate board’s compensation committee fails to set responsible executive compensation, it signals inadequate management oversight.

Political Spending and Lobbying Disclosure

Since the U.S. Supreme Court’s 2010 Citizens United ruling, Comptroller DiNapoli has prioritized seeking disclosure of corporate spending on politics and lobbying. Shareholders need these disclosures to determine if investment dollars are being spent in the company’s best interest, or if that spending opens it to legal, reputational, and business risks.

Proxy Voting

The New York State Common Retirement Fund votes by proxy on each proposal at annual meetings and special meetings of U.S. portfolio companies, as well as selected international companies. Voting the Fund’s proxies at shareholder meetings is part of the Comptroller’s fiduciary responsibility, and an effective means of engaging and communicating with boards of directors and management about the Fund’s ESG priorities.

The Fund makes all proxy voting decisions independently, consistent with its Environmental, Social & Governance Principles and Proxy Voting Guidelines.

During the 2021 Proxy Season (calendar year 2021), the Fund cast 29,669 votes on ballot items at 3,401 company meetings.

2022 Proxy Vote Announcements

	Meeting Date
Tesla, Inc.	8/4/2022	Against all incumbent board directors Failed to appropriately manage and address numerous ESG risks, including lack of oversight by the board over workforce concerns, excessive executive compensation, and failing to implement a shareholder proposal that received majority support from shareholders in 2021.
Tesla, Inc.	8/4/2022	For all shareholder proposals Shareholder proposals seek to address various ESG issues, including seeking a policy on freedom of association, a report on the impact of mandatory arbitration policies, and a report on lobbying activity alignment with the Paris Agreement.
Morgan Stanley	5/26/2022	Against all incumbent board directors Inadequate response to widespread allegations of sexual harassment, sexual assault, and gender discrimination at the company.
Morgan Stanley	5/26/2022	For shareholder proposal regarding fossil fuel financing policy Proposal would mitigate the systemic risks posed by unfettered climate change and ensure that financial institutions are doing their part to prevent the development of new fossil fuel resources that are inconsistent with achieving net-zero by 2050.
Amazon.com, Inc.	5/25/2022	Against two Amazon directors responsible for oversight of human capital management Significant concerns regarding the lack of oversight by the board over workforce concerns that threaten both the well-being of employees and the long-term value of the company.
Chevron Corporation	5/25/2022	Against incumbent audit and sustainability committee members Failed to adopt a robust decarbonization strategy.
Exxon Mobil Corporation	5/25/2022	For shareholder proposal regarding audited report on the impact of IEA's net zero by 2050 scenario analysis Report would help shareholders verify and evaluate climate-related assumptions underlying Exxon's financial statements.
The Travelers Companies	5/25/2022	For shareholder proposal regarding fossil fuel underwriting policies Proposal would help mitigate the systemic risks posed by climate change and end insurance underwriting of new fossil fuel resources inconsistent with achieving net-zero by 2050.
Chubb	5/19/2022	For shareholder proposal regarding fossil fuel underwriting policies Proposal would help mitigate the systemic risks posed by climate change and end insurance underwriting of new fossil fuel resources inconsistent with achieving net-zero by 2050.
NextEra Energy, Inc.	5/19/2022	Against all incumbent directors Failed to adopt a robust decarbonization strategy, including reasonable GHG reduction targets.
Denny's Corporation	5/18/2022	For shareholder proposal regarding tipped wages Company should report to shareholders on the feasibility of increasing starting wages for tipped workers.
The Hartford	5/18/2022	For shareholder proposal regarding fossil fuel underwriting policies Proposal would help mitigate the systemic risks posed by climate change and end insurance underwriting of new fossil fuel resources inconsistent with achieving net-zero by 2050.
Yum! Brands, Inc.	5/18/2022	Against executive compensation plan and compensation committee members Significant concerns with increased CEO pay, and the plan's structure and one-time pay awards. Multiple years of voting against executive compensation plan warrants votes against compensation committee members.
JPMorgan Chase	5/17/2022	For shareholder proposal regarding fossil fuel financing policy Proposal would mitigate the systemic risks posed by unfettered climate change and ensure that financial institutions are doing their part to prevent the development of new fossil fuel resources that are inconsistent with achieving net-zero by 2050.
Dine Brands Global Inc.	5/12/2022	For shareholder proposal regarding tipped wages Company should report to shareholders on the feasibility of increasing starting wages for tipped workers.
Goldman Sachs	4/28/2022	For shareholder proposal regarding fossil fuel financing policy Proposal would mitigate the systemic risks posed by unfettered climate change and ensure that financial institutions are doing their part to prevent the development of new fossil fuel resources that are inconsistent with achieving net-zero by 2050.
Citigroup	4/26/2022	For shareholder proposal regarding fossil fuel financing policy Proposal would mitigate the systemic risks posed by unfettered climate change and ensure that financial institutions are doing their part to prevent the development of new fossil fuel resources that are inconsistent with achieving net-zero by 2050.
Bank of America	4/26/2022	For shareholder proposal regarding fossil fuel financing policy Proposal would mitigate the systemic risks posed by unfettered climate change and ensure that financial institutions are doing their part to prevent the development of new fossil fuel resources that are inconsistent with achieving net-zero by 2050.
Wells Fargo	4/26/2022	For shareholder proposal regarding fossil fuel financing policy Proposal would mitigate the systemic risks posed by unfettered climate change and ensure that financial institutions are doing their part to prevent the development of new fossil fuel resources that are inconsistent with achieving net-zero by 2050.
Wells Fargo	4/26/2022	Against executive compensation plan and compensation committee members Ongoing concerns regarding discretion in determining executive pay and lack of disclosure. Multiple years of voting against executive compensation plan warrants votes against compensation committee members.
Bloomin Brands Inc.	4/19/2022	Against all incumbent board directors Failed to implement a shareholder proposal that received majority support from shareholders in 2021. Proposal requested a report on the Company's efforts to reduce its contribution to climate change.
Starbucks	3/16/2022	Against 5 directors on Compensation and Management Development Committee Oversight concerns related to labor management

View Prior Year Proxy Votes

2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015

Manager Engagement

The Comptroller’s Program also evaluates the ESG policies and practices of the Fund’s investment managers to assess their approach and commitment to ESG. As part of the due diligence process, the Fund completes an ESG scorecard for every proposed investment.

For more information, see the New York State Common Retirement Fund's ESG Strategy.

Corporate Governance Reports

To contact the Fund's Corporate Governance Program, email [email protected].