CalPERS updates proxy voting priorities, adds AI oversight to workforce engagement — public commenters press for fossil‑fuel divestment

Drew Hamblely, investment director for global equities, told trustees that CalPERS voted at more than 10,000 company meetings in 2025 and actively engaged 368 companies representing roughly $125 billion in assets under management. He said the stewardship program prioritized board accountability and governance, and that staff opposed roughly 42% of executive‑pay (say‑on‑pay) proposals in 2025.

Hamblely and colleagues described updates to the proxy voting guidelines for 2026 that emphasize further alignment of executive pay with long‑term shareholder interests and increased director accountability where companies misuse SEC no‑action processes related to shareholder proposals. The team highlighted ongoing climate work (Climate Action 100+ leadership with prioritized engagement on high emitters) and said the human‑capital engagement priorities for 2026 now explicitly include AI oversight, alongside freedom of association and workforce disclosures.

“AI reporting and oversight” appears on the 2026 human‑capital priorities, a change board members welcomed as material to protecting workers as companies adopt AI tools in scheduling, performance monitoring and other personnel systems. Tiffany Poke and Craig Ryan said staff are early in building a practical framework and are conducting one‑on‑one engagements to identify corporate leaders and gaps; the work is expected to inform escalations and proxy positions over time.

During the public‑comment period multiple retirees, academics and advocacy groups urged CalPERS to divest from fossil‑fuel companies, citing financial‑market volatility, geopolitical exposures, public‑health harms and political influence by the oil industry. Diana Cassidy, a retired University of California professor, urged a phased plan to sell oil and gas investments and cited the UC system’s prior divestment action. Other speakers referenced a recent class‑action filing alleging fiduciary lapses and urged CalPERS to protect pensioners from climate‑related financial risk.

Staff said they will continue building an AI oversight engagement framework with partner organizations and that the sustainable investments team will evaluate regulatory comment opportunities; the board did not change voting policy during the session. Public commenters’ calls for divestment were recorded for the public record and will be part of ongoing stewardship discussions.