Commercial, GHG Emissions, Finance - November 16, 2023
CalPERS Establishes $100 Billion Net Zero Pledge
CalPERS announced a change to its sustainable investing strategy to accelerate moving the pension fund’s portfolio toward net zero where carbon emissions from investments are evenly balanced with carbon reductions.
The new goal includes a commitment of $100 billion toward climate solutions by 2030, including ensuring corporate accountability through the sale of investments that do not have a credible plan to reduce carbon emissions.
The plan was presented to the investment committee of the Board of Administration. The Sustainable Investments 2030 Strategy includes additional plans to diversify corporate leadership and enhance existing policy that affirms the importance of sound labor principles.
“Our 2030 strategy for sustainable investing is the next step in CalPERS’ efforts to improve our long-term investment returns while also making meaningful progress in the fight against climate change,” said Chief Executive Officer Marcie Frost in a statement. “In addition, we are continuing the important work of promoting inclusive corporate leadership and the rights of workers.”
The Sustainable Investments 2030 Strategy offers a series of attainable and specific actions to reduce the carbon emissions intensity of CalPERS’ investments by 50% by 2030. The plan is part of the agency’s overall goal to balance carbon emissions from its investments with carbon reductions by 2050.
CalPERS currently has nearly $47 billion in low-carbon assets. The new commitment would more than double that amount.
The Sustainable Investments 2030 Strategy will also establish clear accountability for companies when it comes to reducing the size of their carbon footprint. CalPERS investment managers will develop a process to exit certain securities that do not have a credible net zero plan.
CalPERS' pension fund serves over 2 million members in the CalPERS retirement system and administers benefits for more than 1.5 million members.