Key Takeaways
- • Lauren Gellhaus, head of ESG at the Teacher Retirement System of Texas (TRS), left the $200 billion pension fund after nearly five years, with her departure officially effective Aug. 8, 2022.
- • Gellhaus was TRS's first head of ESG, appointed in January 2020, where she added board-approved ESG language to the investment policy statement and established an ESG committee.
- • Her exit comes as a 2021 Texas state law restricts public pension funds from contracting with or investing in companies that boycott energy companies, complicating ESG strategies that rely on fossil fuel divestment.
- • TRS declined to comment on whether it would replace Gellhaus, saying it typically does not comment on employee matters.
Summary
Lauren Gellhaus, the head of environmental, social, and governance (ESG) at the Teacher Retirement System of Texas (TRS), has left the $200 billion pension fund after nearly five years, according to the publication. She announced her departure in a LinkedIn post, writing that "last week, I ended an amazing chapter in my career" and that she was "thrilled for the next chapter (more on that soon)." Her official departure date was Aug. 8.
Gellhaus joined TRS in 2017 as transition lead within the retirement system's investment operations department, where she oversaw cash management and served as point person for external cash and securities transitions. In 2018 she moved to the external public markets team, covering hedge fund and long-oriented mandates. In January 2020 she was named the retirement system's first head of ESG, tasked with overseeing the strategic development and execution of TRS's ESG initiatives. She cited as key achievements the addition of board-approved ESG language to the investment policy statement, the establishment of an ESG committee, and the creation of an educational series.
Gellhaus did not state why she was leaving. The departure comes as ESG investing has become more complicated in Texas following a state law enacted the previous year. The law requires state entities to effectively refrain from dealing with companies that boycott energy companies, which the statute defines to include refusing to deal with, terminating business activities with, or taking actions intended to penalize or limit commercial relations with fossil fuel-related firms. Divestment from or avoidance of fossil fuel investments is a central component of most ESG strategies, placing Texas public pension funds in a constrained position. The law applies to the Employee Retirement System of Texas, Texas Municipal Retirement System, Texas County and District Retirement System, Texas Emergency Services Retirement System, and Permanent School Fund, in addition to TRS.
TRS did not comment on whether it planned to replace Gellhaus, with a spokesperson noting that the retirement system typically does not comment on employee matters. The pension fund's investment policy statement says it "will consider ESG factors that are material to long-term returns and levels of risk."
Gellhaus joined TRS in 2017 as transition lead within the retirement system's investment operations department, where she oversaw cash management and served as point person for external cash and securities transitions. In 2018 she moved to the external public markets team, covering hedge fund and long-oriented mandates. In January 2020 she was named the retirement system's first head of ESG, tasked with overseeing the strategic development and execution of TRS's ESG initiatives. She cited as key achievements the addition of board-approved ESG language to the investment policy statement, the establishment of an ESG committee, and the creation of an educational series.
Gellhaus did not state why she was leaving. The departure comes as ESG investing has become more complicated in Texas following a state law enacted the previous year. The law requires state entities to effectively refrain from dealing with companies that boycott energy companies, which the statute defines to include refusing to deal with, terminating business activities with, or taking actions intended to penalize or limit commercial relations with fossil fuel-related firms. Divestment from or avoidance of fossil fuel investments is a central component of most ESG strategies, placing Texas public pension funds in a constrained position. The law applies to the Employee Retirement System of Texas, Texas Municipal Retirement System, Texas County and District Retirement System, Texas Emergency Services Retirement System, and Permanent School Fund, in addition to TRS.
TRS did not comment on whether it planned to replace Gellhaus, with a spokesperson noting that the retirement system typically does not comment on employee matters. The pension fund's investment policy statement says it "will consider ESG factors that are material to long-term returns and levels of risk."
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