Can your portfolio take the heat?
At a July board meeting, CalSTRS board members asked staff how the funds $16.4 billion real estate portfolio might be affected by rising ocean levels due to global warming. If ocean levels rise, it will affect more than just the real estate portfolio, CIO Christopher Ailman, wrote in a follow-up memo to trustees issued at the Sept. 6 meeting of the $169 billion California State Teachers Retirement Systems board.
Mr. Ailman included in his monthly CIO report a world map from environmental think tank the World Resource Institute, Washington. It showed that 19% of all coastal lands have been altered for urban or rural use, with significant impact in Great Britain, southern Europe, Asia and the East Coast of the U.S, indicating these areas would be the hardest hit.
However, the map does not tell us when this may occur. Nevertheless, it does warrant staff and the investment manager to pay attention to this risk and plan accordingly, said Mr. Ailman in his memo. One last thing to point out on the map: It does not predict beach front property for Sacramento, and West Sacramento appears to stay dry.