California State Teachers’
Retirement System
Sustainable Investment and Stewardship Strategies
100 Waterfront Place, MS-4
West Sacramento, CA 95605
916.414.7410

July 31, 2024
Sustainability Standards Board of Japan
Fukoku Seimei Building 20F
2-2-2 Uchisaiwai-Cho
Chiyoda-ku, Tokyo 100-0011, Japan
RE: Support of ISSB S1 and S2 Disclosure Standards
We write on behalf of the California State Teachers’ Retirement System (CalSTRS). Established in 1913,
CalSTRS is the largest educator-only pension fund in the world with a global investment portfolio valued
at approximately $337.9 billion as of May 31, 2024. As administrators of both a deﬁned beneﬁt plan anda deﬁned contribution plan, our mission is to secure the ﬁnancial future and sustain the trust of morethan 980,000 Californian educators and their families.
We appreciate the opportunity to provide comments to your consultation on the adoption ofsustainability reporting standards. CalSTRS strongly supports global adoption of the IFRS Foundation’sInternational Sustainability Standards Board (ISSB) S1 and S2 sustainability-related ﬁnancial disclosures.
Sustainability-related issues present real ﬁnancial risks to the value of our plan assets. However, available
methods to size and forecast that risk have been constrained by a lack of reliable, company generated
data. Implementing the ISSB’s disclosure framework will greatly enhance our ability to account forsustainability risk when selecting partners, indexes, funds, securities, companies for investment,engagement, and proxy action.
We have been urgently calling for such disclosures for many years as a means of enhancing our ability
to meet our mission to protect the retirement futures of California’s educators. As an owner of nearly
10,000 public securities, we welcome the adoption of universal global standards. While it is notable thatsustainability disclosure has increased over the years, it is inconsistent and leaves companies guessing at
what investors need. Maximizing alignment with ISSB standards allows companies across jurisdictions tolessen their reporting burden and facilitates comparability and coherence for investors. Incorporating
reporting frameworks such as the Task-Force for Climate-Related Financial Disclosures (TCFD) into theISSB S1 and S2 further streamlines corporate reporting while providing comparable data across sectors,which is crucial investors. In recognition of regional market diﬀerences, we support supplementing oraugmenting S1 and S2 with country speciﬁc standards that reﬂect local regulatory requirements.
The accessibility and timeliness of the information is an important factor in its usability. Sustainability
disclosures should accompany and be published simultaneously with ﬁnancial reporting. This allowsinvestors to make more informed decisions with all necessary information to contextualize ﬁnancial
reporting and impacts to enterprise value.
Sustainability reporting should include all material risks and opportunities including human capitalmanagement, the climate transition and a variety of other issues impacting companies. We aresupportive of requiring industry-speciﬁc disclosures that contextualize a company’s activities as
incorporated in the ISSB’s framework. Equally important is reporting on value chain impacts so investors
are better able to understand associated risks as well. These internal and external, direct and indirect
dependencies, resources, and relationships can have a material impact on company operations and thus
it is vitally important for investors to have consistent and timely disclosure.
Sustainability risks are interconnected and do not exist in a vacuum, making it diﬃcult for investors tomake informed decisions about ﬁnancial performance, outlook, and long-term value if we are only given
isolated information about select risks. Thus the full adoption of both S1 and S2, covering all material
risks, should be mandatory and is crucial to providing transparency to investors. Companies should not
be allowed discretion on which set of standards or risks to disclose. We advise against jurisdictions
adopting only a subset of the standards. If necessary we recommend that they consider a short phased
approach to implementing requirements instead.
As prudent investors, we recognize that decision-useful sustainability reporting requires adaptation tochanging knowledge and circumstances, the process by which the ISSB S1 and S2 standards aredeveloped takes this into account, ensuring that issuers disclose the most relevant information toinvestors. The ISSB has also conducted signiﬁcant work to create a clear global baseline, reducefragmentation and ensure interoperability within reporting.
Regulators and policy-makers have an incredible opportunity to proactively shape and enhance
disclosures available to investors to support eﬀective risk analysis and prudent investment decisions. .
We wish to thank you for working towards standardization of high quality sustainability disclosure andaddressing the issue of insuﬃcient, irregular, and unreliable sustainability data. We appreciate theopportunity to provide our perspective and can be contacted at revaitla@calstrs.com should you haveany questions.
Sincerely,

Lynn PaquinPortfolio Manager

Rekha Vaitla
Investment Oﬃcer