California state Treasurer Phil Angelides today urged CalPERS and CalSTRS to cut energy usage in their real estate holdings by 20% within five years. Mr. Angelides, who is a trustee on both the $170.7 billion California Public Employees' Retirement System and the $117 billion California State Teachers' Retirement System, both based in Sacramento, estimated the two funds would need to invest $200 million to retrofit their 200 million square feet in real estate holdings. He said the funds would save about $40 million annually in energy costs, achieving a five-year payback and generating a 14% internal rate of return over 10 years.
CalPERS will hold a workshop Nov. 17 discussing this and other parts of the treasurer's "Green Wave" environmental investment initiative. CalSTRS will discuss parts of the proposal at its Dec. 1 board meeting. CalPERS and CalSTRS have $11.9 billion and $5.4 billion invested in real estate equity, respectively.