RI has partnered with the Committee on Workers Capital (CWC) to publish a series of CWC Trustee Profile interviews with union-nominated pension fund trustees that touch on the role of individual board members in driving innovation around responsible investment at their funds. This installment is with Sharon Hendricks, Vice-Chair of the CalSTRS Board of Trustees.
CalSTRS Commits to Increase in Clean Energy and Technology Investments Effort comes as sign of solidarity for climate change policy
WEST SACRAMENTO, Calif. – California State Teachers’ Retirement System (CalSTRS) Chief Executive Officer Jack Ehnes, announced plans to increase current clean energy and technology investments of $1.4 billion to $3.7 billion over the next five years in an effort to increase low-carbon investments. The move is in response to United Nations Secretary-General Ban Ki-moon’s call for bold action to reduce carbon emissions and build resilience to the impacts of climate change ahead of the United Nations Climate Summit on September 23, 2014.
The more than 150 percent increase will come from clean energy and technology investment holdings in the Public Equity, Private Equity, Fixed Income and Infrastructure portfolios as suitable investments become available.
CalSTRS will participate in next week’s summit at the U.N. in an effort to bring attention to the role large institutional investor’s play in financing clean energy and climate change initiatives. Further, CalSTRS hopes its commitment will demonstrate solidarity for incentives that lead to the development of public policy on climate change.
“CalSTRS has long supported the case for global action on climate change and is seeing a growing number of investment opportunities in low-carbon solutions, especially as renewable technology costs come down and regional clean energy policies take hold,” said CalSTRS Chief Executive Officer Jack Ehnes. “Strong new climate and clean energy policies are urgently needed at the national and international levels to facilitate scaling up investments in climate solutions. With this commitment, we hope to catalyze incentives for stronger, more comprehensive policies aimed at reducing the risks associated with climate change.”
“Targeting the clean energy and technology sector represents a good investment opportunity because it positions CalSTRS for a low-carbon future,” added CalSTRS Chief Investment Officer Christopher J. Ailman. “If a meaningful price on carbon emissions is established, CalSTRS believes its clean energy and low-carbon investment could grow to almost $9.5 billion, nearly seven times the current level of investment.”
Currently, CalSTRS Private Equity Portfolio holds more than $500 million in investments in solar and wind energy projects located principally in the United States and Europe. Within its infrastructure portfolio, CalSTRS has invested almost $200 million in solar, wind and hydro energy generation and transmission assets located in countries such as Brazil, Chile, United Kingdom, and in Europe and North America. More information on environmentally-themed investments can be found in the CalSTRS annual Green Initiative Task Force Report.
CalSTRS is a member of Ceres’ Investor Network on Climate Risk, and is a signatory of a global investor statement, announced yesterday, along with 346 other international investors managing $24 trillion in assets. The statement calls for strong worldwide climate policies to accelerate clean energy investment. CalSTRS will be joining these and many other institutional investors at next week’s U.N. Climate Summit. As an institutional investor and global shareholder, CalSTRS supports the development of a common framework for the reporting of mainstream climate change information to the business and investment communities.
The California State Teachers’ Retirement System, with a portfolio valued at $188.3 billion as of August 31, 2014, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s 868,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.
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