CalPERS plans to increase its investments in renewable energy as well as what officials there call "transition" investments — companies that are moving to green from brown energy — said Peter Cashion, managing investment director for sustainable investments at the $468.3 billion pension fund, on Monday at its off-site meeting in Monterey, Calif.
Currently, for every dollar the California Public Employees' Retirement System, Sacramento, invests in fossil fuel investments, $3.75 is invested in renewable or transition investments, Mr. Cashion said. Not including transition investment, CalPERS ratio of clean energy to fossil fuel investment is 2.5-to-1, he said.
"We do intend to continue to grow the numbers in terms of renewable and, in particular, transition investments," Mr. Cashion told the board. Mr. Cashion said that the reason he provided the information was in response to a board member's question at its June meeting. Among the possible initiatives to generate outperformance by making sustainable investments are investing in stocks of undervalued transition assets, in real estate projects that reduce emissions while reducing costs, in infrastructure projects that are moving from fossil fuel to clean energy, and private equity or venture capital backed climate technology companies, according to a presentation to the board.
At the June 20 investment committee meeting, Mark Carney, vice chairman and head of transition investing at Brookfield Asset Management, said that while global clean energy investment increased to $1.7 trillion in 2022 from $500 billion five years earlier, the ratio of clean energy investments relative to fossil fuel needs to get to four-to-one by 2030. "Just being part of that is a way to generate alpha at the core," Mr. Carney had said.