CalPERS Pledges to Boost Low-Carbon Assets to $100B

The $462 billion pension giant will more than double those assets as it aims to halve the carbon-emissions intensity of its investments by 2030.



The California Public Employees’ Retirement System announced it will commit $100 billion in assets to a new sustainable investing strategy aimed at accelerating its portfolio’s progress toward reaching net-zero carbon emissions. The pledge would more than double the nearly $47 billion in low-carbon assets the pension fund currently holds.

Under the new strategy, the $462 billion pension fund aims to cut the carbon emissions intensity of its investments by half in slightly more than six years as part of its goal of reaching net zero by 2050. The strategy also includes efforts to diversify corporate leadership and enhance existing policies that support 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,” CalPERS CEO Marcie Frost said in a statement. “In addition, we are continuing the important work of promoting inclusive corporate leadership and the rights of workers.” 

According to CalPERS’ announcement, the sustainable investing strategy is based on “the belief that responsibility for decarbonizing both the portfolio and economy should not be passed off to others by a passive divestment effort.” The new plan partly relies on financial backing for companies that are committed to transitioning to “green” energy production from “brown.”

Want the latest institutional investment industry
news and insights? Sign up for CIO newsletters.

The pension will also begin surveying external managers to keep track of their diversity and efforts on regulatory requirements and shareowner action under the new strategy, which it added will focus on human capital management by advocating for more corporate reporting, improved workforce valuations and the promotion of labor principles aimed at ensuring fair treatment of workers.

“These investments, which we believe can be made across an array of asset classes, will be designed to generate excess returns and boost our earnings in service to the mission of meeting our members’ retirement dreams,” Peter Cashion, CalPERS’ managing investment director for sustainable investing, said in a statement.

According to CalPERS, the strategy will set clear accountability for the reduction of companies’ carbon footprint, and its investment managers will develop a process to exit certain securities that do not have a credible net zero plan.

“We believe in engaging with these companies,” Cashion said. “But we will make it clear that refusing to move toward climate solutions puts our investments at risk, which is counter to our fiduciary duty.”

Related Stories:

One-Fifth of CalPERS Equity Portfolio Faces Climate Change Risk

Pressure Mounts on CalPERS to Ditch Fossil Fuels

CalPERS, Wellington Launch Climate Risk Evaluation Framework

Tags: , , , , , , , , , ,

Texas Permanent School Fund Appoints Robert Borden new CEO

Borden was previously CIO of the South Carolina Investment Commission and the Louisiana State Employees’ Retirement System.



The Texas Permanent School Fund Corp. has appointed investment executive Robert Borden as its new CEO, the fund announced.
 

Borden will assume the role on December 1 from Britt Harris, who has been serving as acting CEO since July, according to a fund press release. The incoming investment chief has a nearly four-decade career in institutional investing roles.  

“We are pleased to bring on board an award-winning investor and leader of natural stature who will bring visionary leadership to our state’s historic public education sovereign wealth fund,” said Tom Maynard, chairman of the Permanent School Fund’s board, in the release. “We are excited that we have an eminently qualified leader who has a proven track record in both the private and public investment sectors.” 

The Texas PSF, established in 1845, managed $51.3 billion in assets on behalf of public schools in the state, as of August 31, 2022, according to the fund’s website.  

For more stories like this, sign up for the CIO Alert newsletter.

“I am thrilled to be returning to my hometown of Austin, honored that the Board has given me the opportunity to serve as a steward of the storied Texas Permanent School Fund,” Borden said in a statement.  

Borden was most recently managing partner at Palmetto Research Partners, LLC, a financial consulting firm. He was previously CIO, CEO and founding partner of Chapel Hill, North Carolina-based Delegate Advisors, a wealth advisory firm that provides services for individuals and institutions. He was CEO and CIO of the South Carolina Retirement System Investment Commission between 2006 and 2011. He was also CIO and executive director of the Louisiana State Employees’ Retirement System from 1995 to 2006.  

Borden holds a bachelor’s degree in finance from the University of Texas at Austin and a master’s degree in finance from Louisiana State University.  

Related Articles: 
Britt Harris Steps in as Acting CEO at Texas Permanent School Fund 

Big Oil Strikes Back at ESG 

Proposed Amendment to Texas Constitution Would Create Endowments for Smaller Schools 

Tags: , , ,

«