Alternative Investments/ESG: CalPERS Commits $100B To Low Carbon Investments

“Refusing to move toward climate solutions puts our investments at risk, which is counter to our fiduciary duty.” – CalPERS

California Public Employees’ Retirement System (CalPERS), a $462 billion pension giant, has pledged to invest $100 billion in low-carbon assets as part of a sustainable investing strategy. This commitment aims to accelerate the reduction of carbon emissions within its portfolio, with the goal of halving the carbon emissions intensity of its investments by 2030. Currently holding nearly $47 billion in low-carbon assets, CalPERS aims to contribute significantly to the fight against climate change while improving long-term investment returns.

The strategy not only focuses on decarbonizing the portfolio but also emphasizes corporate leadership diversification and the enhancement of policies supporting labor principles. CalPERS CEO Marcie Frost emphasized that the 2030 strategy for sustainable investing is a crucial step in their efforts to combat climate change and promote inclusive corporate leadership and workers’ rights.

The sustainable investing plan involves financial support for companies committed to transitioning to green energy production. CalPERS will also monitor external managers’ diversity, regulatory compliance, and shareholder action. Human capital management will be a key focus, advocating for corporate reporting, improved workforce valuations, and the promotion of fair labor principles.

According to Peter Cashion, CalPERS’ managing investment director for sustainable investing, these investments across various asset classes are designed to generate excess returns while aligning with the mission of meeting members’ retirement goals.

The strategy establishes clear accountability for reducing companies’ carbon footprints, with investment managers developing a process to divest from securities lacking credible net-zero plans.

Related Story: CalPERS Will Fund $1B To Promote Diversity In Alternative Fund Managers’ Investments

Photo by Marek Piwnicki on Unsplash

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