IDENTIFYING PRIORITIES
Identifying
Stewardship Priorities
Clearly defined stewardship priorities are essential to MassPRIM’s commitment to strategic focus and outcome orientation. In 2024, MassPRIM deployed a three-stage innovative, rigorous, and data-oriented approach to identify the areas of focus for its stewardship efforts.
Financial Materiality Assessment
Identified most financially material issues.
Staff partnered with a number of groups to conduct a materiality assessment of the PRIT Fund that was informed by financial models and industry and academic research on long-term value creation. The assessment focused on the Public Markets portfolio – approximately 60% of the Fund – as the asset selection with the most data availability for the systematic assessment that was run. The assessment generated a ranked analysis of environmental and social issues that represented the most significant financial implications for the PRIT Fund’s long-term performance.
Performance & Disclosure Analysis
Examined corporate performance and disclosure.
Examined portfolio company performance on the top material issues identified. In this stage, staff collaborated with MSCI to analyze company-level data on corporate practices, implementation and transparency. The analysis identified areas where companies were not yet taking sufficient action to mitigate risk as potential sections where stewardship action would be most beneficial to the Fund’s performance.
Priority Evaluation
Applied criteria to select strategic priorities.
Combined the findings from the previous stages with the prioritization criteria established in the Engagement Policy in order to pinpoint specific areas where focused efforts by MassPRIM would be most relevant, action-oriented and likely to generate relevant outcomes.
Priorities
Stewardship
Priorities
Building on this process, in December 2024, the MassPRIM Board approved four Stewardship Priorities for the Program’s initial implementation cycle.
Each Stewardship Priority reflects academic and industry research on financial materiality, material portfolio exposure, and actionable
engagement opportunities. The following sections detail the strategic rationale and implementation approach for each priority area.
Planning
Forestry
Climate Transition
Planning
Encourage climate-aware strategic plans and business models
- Analyze climate risks and opportunities across the portfolio
- Engage managers and companies on transition planning
- Conducted baseline conversations with all external managers
- Built customized climate transition model with Goldman Sachs
- Joined the ESG Data Convergence Initiative for private markets
- Voted against directors at 107 high-emitting companies for inadequate disclosure
These risks carry financial implications for long-term investors. MassPRIM has prioritized Climate Transition Planning to deepen the Fund’s understanding of how climate-related factors affect portfolio investments and to emphasize proactive planning to mitigate or adapt to identified risks. In 2025, MassPRIM set a goal to analyze climate risks and opportunities across the portfolio and to engage managers and companies on climate transition planning.
To operationalize this goal, MassPRIM developed an approach modeled after its existing risk measurement systems. The approach is designed to provide investment teams with the insight to evaluate risks systematically and pose more informed questions to investment managers.
As a first step, the Public Markets team initiated structured baseline conversations with all external managers to understand the extent to which climate considerations inform their investment processes. These conversations revealed a wide range of systems, capacities and approaches.
Building on this baseline, staff partnered with Goldman Sachs to develop a customized Climate Transition model to evaluate the risks companies face from climate change and the actions they are taking to position themselves for resilience and value creation. This model was applied to the Public Markets portfolio. Staff are now using the insights obtained to further engage Public Markets managers on the specifics of their approach to considering climate transition, including security selection and company engagement practices. These discussions will help identify firms demonstrating advanced climate-integration practices, as well as those where additional engagement is needed to understand and emphasize the importance of climate change as a long-term risk factor.
In Private Markets, staff engaged with managers to understand how they incorporate climate transition considerations into portfolio oversight and value creation strategies. Noting the limited availability of climate data from private companies as a barrier to informed decision making, MassPRIM joined the ESG Data Convergence Initiative (EDCI)—a partnership between private market general partners and limited partners that aims to standardize reporting on key environmental and social topics. MassPRIM will use this platform to encourage relevant GPs to disclose climate information that can inform future analysis of risk and opportunity.
Climate Transition Planning also informed proxy voting decisions. Between July 2024 and June 2025, the Fund voted against directors at 107 high-emitting companies with insufficient climate transition planning or disclosure. MassPRIM also supported 96 shareholder resolutions supporting corporate efforts on climate change risk mitigation and opposed 53 resolutions calling on companies to roll back their climate change efforts. More details are available in the Proxy Voting section.
Fair Pay
Drive uptake of equitable and transparent pay practices.
- Engage companies to encourage disclosure on pay practices, human capital
- Explore innovative business models that address pay inequities
- Redesigned proxy voting guidelines on executive compensation
- Engaged 50+ companies on pay equity, transparency, and retention
- Joined LP Advisory Council of Ownership Works
- Approved Responsible Workforce Management Policy
The policies and approaches companies use to manage their workforce impact long-term corporate performance. Companies with transparent and equitable pay structures and well-supported workforces tend to exhibit stronger productivity and talent retention, factors that directly influence earnings and risk profiles. MassPRIM prioritized Fair Pay to deepen understanding of workforce-related risks across portfolio companies and encourage equitable and transparent pay practices.
In 2025, MassPRIM set goals to encourage companies to establish processes for pay parity, advocate for enhanced transparency on human capital and pay practices and explore innovative business models that address pay inequities.
In February 2025, the PRIM Board updated MassPRIM’s Custom Proxy Voting Guidelines related to executive compensation, incorporating a more robust focus on pay-for-performance alignment and stricter definitions of problematic pay practices. This resulted in a voting posture that discouraged compensation practices that are misaligned with long-term shareholder interests.
Between July 2024 and June 2025, MassPRIM also supported nine shareholder proposals encouraging the establishment of fair and equitable pay and responsible workforce practices and opposed six resolutions calling for the rollback of pay equity mechanisms.
In 2025, MassPRIM launched its most comprehensive human capital engagement effort to date, directly engaging companies across sectors where workforce issues are particularly material. These engagements focused on pay equity, wage transparency, worker retention, and the adequacy of human capital disclosures. The conversations communicated MassPRIM’s view on the importance of responsible workforce practices and fair pay to portfolio companies. Staff will track and report on commitments to improved disclosure and practices obtained through these dialogues.
Fair pay and responsible workforce practices were also a focus of work with private equity managers. In 2025, MassPRIM joined the Limited Partner Advisory Council of Ownership Works, a non-profit organization pioneering workable models for shared ownership in private companies. Ownership Works partners with companies and investors with the goal of creating thriving workplaces through the power of shared ownership and shared wealth creation.
MassPRIM’s participation is focused on building the business case for such approaches with a view to encouraging relevant private markets managers to adopt them.
In 2025, the PRIM Board approved the Responsible Workforce Management Policy (PDF) PDF file, opens in a new tab aimed at MassPRIM’s private equity investments to further systematize its due diligence on this priority. Under this Policy, staff will conduct focused assessments of the labor practices of prospective managers. When investments are approved, the investment managers will be provided with this Policy, and for existing managers, this Policy will be factored into ongoing manager engagements.
Sustainable Forestry
Support practices that reduce forest loss and promote resilience.
- Analyze opportunities to support natural capital solutions
- Engage companies on action to reduce critical forest loss
- Conducted detailed deforestation risk analysis across
- Joined CDP to support enhanced disclosure
- Assessed global equity portfolio on commodity driven deforestation risks
Deforestation presents material risks to companies whose operations and supply chains are dependent on resilient and thriving forest ecosystems. MassPRIM prioritized Sustainable Forestry to understand and mitigate deforestation-related risks across the portfolio, leveraging insights from the Fund’s timberland investments.
In 2025, MassPRIM set a goal to engage companies on action to reduce critical forest loss and explore emerging opportunities in forest resilience and natural capital management.
In 2025, staff worked with Climate & Company, a European think tank, to conduct detailed analysis of deforestation risk across the Public Markets portfolio, identifying companies where exposure to commodity driven deforestation represents a financially material risk. These companies now form a priority list for future engagement and monitoring, including through external managers.
In 2025, MassPRIM joined CDP, a global non- profit that operates an environmental disclosure system for companies to report on climate change, water scarcity, and deforestation. By joining CDP, MassPRIM gained access to an extensive database of corporate information on deforestation for further analysis.
Proxy Voting Guidelines explicitly recognizing the materiality of natural capital related risks to certain companies and industries and calling for the implementation of formal risk mitigation systems.Between July 2024 and June 2025, the Fund supported 6 shareholder resolutions supporting corporate action to mitigate risk associated with deforestation and natural capital degradation.
MassPRIM continues to work closely with its timber consultant, IWC Group, to assess the resilience of the timberland portfolio under various ecological and market scenarios, identifying both risks from changing climate patterns and exploring potential value creation pathways through conservation strategies.
Transparency
Encourage improved disclosure on stewardship priorities.
- Engage companies on the importance of standardized,high-quality disclosure
- Advocate for disclosure regulations on climate change and human capital
- Join efforts to develop investor-relevant disclosure framework
- Update Custom Proxy Voting Guidelines to reinforce transparency on material issues
- Joined Human Capital Management Coalition to support workforce disclosures
- Joined CDP to support environmental disclosures
- Joined EDCI to advance private markets disclosur
In 2025, MassPRIM joined the Human Capital Management Coalition, an investor group advocating for standardized human capital disclosure. This membership signals MassPRIM’s support for standardized disclosure on key metrics that indicate the health of a company’s workforce management practices.
As discussed in the Climate Transition Planning section, MassPRIM’s membership in the EDCI reflects the need for greater transparency on environmental and social factors from private companies. Staff intend to encourage relevant private markets managers to report using this platform. Membership in the EDCI also provides an opportunity to advocate for increased transparency on metrics that reflect the Fund’s stewardship priorities.