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 2022 Proxy Season (calendar year 2022), the Fund cast 29,861 votes on ballot items at 3,355 company meetings.

2023 Proxy Vote Announcements

	Meeting Date
Meta Platforms Inc.	5/31/2023	Against All Directors Failure to provide adequate oversight of the company's content management practices. Failure to disclose a plan to implement shareholder proposals that received majority support from outside shareholders.
Meta Platforms Inc.	5/31/2023	For Shareholder Proposal Regarding a Report on the Efficacy of Enforcement of Content Policies Shareholders would benefit from increased transparency and disclosure on how the company is managing risks related to misinformation and harmful content.
Amazon.com Inc.	5/24/2023	Against all Leadership Development and Compensation Committee members Significant concerns regarding the lack of oversight by the board of workforce issues that threaten both the well-being of employees and the long-term value of the company; the committee was unresponsive to shareholder engagement. Failure to address ongoing executive compensation concerns.
		Against all Nominating and Corporate Governance Committee members The committee was unresponsive to shareholder engagement.
		Against Executive Compensation Plan The Board's response to last year's low say-on-pay vote was inadequate; disconnect between pay and performance.
JP Morgan Chase	5/23/2023	For shareholder proposals regarding 2030 absolute greenhouse gas (GHG) emissions reduction targets for its energy sector lending and underwriting The company has failed to adopt a science-based 2030 target to reduce GHG emissions for their energy sector lending and underwriting on an absolute basis.
		For shareholder proposals regarding a transition plan The company has failed to provide meaningful disclosures on how it intends to align their financing activities with their interim GHG reduction and net zero targets.
		For shareholder proposal regarding a policy for a time-bound phase-out of these institutions’ lending and underwriting for new fossil fuel exploration and development The company lacks such policy that is required for the company to address climate risks and achieve its net zero commitment.
Morgan Stanley	5/19/2023	For shareholder proposal regarding a policy for a time-bound phase-out of these institutions’ lending and underwriting for new fossil fuel exploration and development The company lacks such policy that is required for the company to address climate risks and achieve its net zero commitment.
ConocoPhillips	5/16/2023	Against all the incumbent directors Failed to appropriately respond to the shareholder proposal calling for scope 3 emissions reduction target that received majority support.
Norfolk Southern Corporation	5/11/2023	Against All Board Directors and Executive Compensation Board has failed to to appropriately manage material ESG, legal, and reputational risks resulting from the East Palestine train derailment. Executive compensation plan should include expanded clawback policy.
Kinder Morgan	5/10/2023	Against all the incumbent directors Failed to appropriately disclose and manage climate risks, including lack of decarbonization strategy and robust and comprehensive GHG targets.
BP plc	4/27/2023	Against Remuneration Report The company suffered four fatalities during the year, yet the CEO received payout of annual bonus for managing workforce safety.
Goldman Sachs	4/26/2023	For shareholder proposals regarding 2030 absolute greenhouse gas (GHG) emissions reduction targets for its energy sector lending and underwriting The company has failed to adopt a science-based 2030 target to reduce GHG emissions for their energy sector lending and underwriting on an absolute basis.
		For shareholder proposals regarding a transition plan The company has failed to provide meaningful disclosures on how it intends to align their financing activities with their interim GHG reduction and net zero targets.
		For shareholder proposal regarding a policy for a time-bound phase-out of these institutions’ lending and underwriting for new fossil fuel exploration and development The company lacks such policy that is required for the company to address climate risks and achieve its net zero commitment.
Bank of America	4/25/2023	For shareholder proposals regarding a transition plan The company has failed to provide meaningful disclosures on how it intends to align their financing activities with their interim GHG reduction and net zero targets.
Bank of America	4/25/2023	For shareholder proposal regarding a policy for a time-bound phase-out of these institutions’ lending and underwriting for new fossil fuel exploration and development The company lacks such policy that is required for the company to address climate risks and achieve its net zero commitment.
Wells Fargo	4/25/2023	For shareholder proposals regarding a transition plan The company has failed to provide meaningful disclosures on how it intends to align their financing activities with their interim GHG reduction and net zero targets.
Wells Fargo	4/25/2023	For shareholder proposal regarding a policy for a time-bound phase-out of these institutions’ lending and underwriting for new fossil fuel exploration and development The company lacks such policy that is required for the company to address climate risks and achieve its net zero commitment.
Citibank	4/25/2023	For shareholder proposal regarding a policy for a time-bound phase-out of these institutions’ lending and underwriting for new fossil fuel exploration and development The company lacks such policy that is required for the company to address climate risks and achieve its net zero commitment.
Charter Communications Inc.	4/25/2023	Against all incumbent nominating and corporate governance committee members Board lacks sufficient gender diversity (currently 1 out of 13 directors are gender diverse).
Charter Communications Inc.	4/25/2023	For shareholder proposal regarding lobbying report Company has provided little meaningful disclosure regarding its lobbying activities, and shareholders would benefit from a more comprehensive picture of the Company's lobbying activities.
Starbucks Corporation	3/23/2023	Against all incumbent Compensation and Management Development Committee members and CEO Howard Schultz Failed to appropriately manage and address numerous ESG risks, including lack of oversight and failure to uphold the company’s corporate policies on human rights and freedom of association.
Starbucks Corporation	3/23/2023	For shareholder proposal regarding Third-Party Assessment of Freedom of Association Greater transparency resulting from disclosure of an independent-third party assessment could help address concerns about Starbucks' reputation and enable investors to assess its adherence to its human rights commitments.

Prior Year Proxy Votes

2022 | 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].