From relaxing on the beach to running a business that relies on the sea, countless people look to the earth’s oceans for fun or their livelihood. For this reason, in December 2008 the United Nations General Assembly designated June 8 as World Ocean Day. It’s a day to reflect on how vital the health of the ocean is for marine life and all aspects of our environment, and to raise awareness of what we can do to help protect it.
Changes to Oceans Impact Everyone
The ocean impacts our everyday lives. We count on it to provide food and transport goods, but it even provides us with the air we breathe. In fact, the ocean produces over half of the world’s oxygen and absorbs 50 times more carbon dioxide than our atmosphere.
The ocean also is a major driver of the U.S. economy. It produces $282 billion in goods and services, and ocean-dependent businesses employ almost three million people, according to the U.S. National Oceanic and Atmospheric Administration.
The health of the ocean is vital to our way of life and fundamental to the health of many businesses. For these reasons, CalPERS views impacts to the ocean as an investment risk that we must measure and work to mitigate.
How Oceans Impact Investments
CalPERS invests in public and private companies to make money to pay the pensions promised to our members. As a long-term investor, we look to these companies to succeed over decades. To do this, they must reduce risks to their businesses, including those risks generated by climate change.
So how do things like changing sea levels impact investments? One example is the impact on coastal businesses and communities. As the sea rises, coastal businesses including tourism, fishing, and importing/exporting operations are impacted. As the beachfront erodes, resorts must close, and oceanfront operations must relocate. These impacts are costly to businesses and lead to losses for investors.
CalPERS Engagement Efforts
At CalPERS, we work with companies to identify ways they can reduce their impact on the environment. These changes not only reduce risks to their business, but also to their industry and our global economy.
Our engagement efforts range from voting our proxy votes at corporations’ Annual General Meetings to engaging one-on-one with corporate executives and board members. We also partner with other large investors, through partnerships such as Climate Action 100+, to push for corporate innovation and new policies that have big impacts.
As we celebrate World Ocean Day, we are reminded that what is good for the earth is also good for business. Working with businesses to tackle these complex issues is fundamental to our long-term investment goals. To learn more about CalPERS proxy voting efforts, visit our Corporate Governance webpage.