By Muskan Arora
Keeping on track with its $100bn Climate Action Plan, the
$552.41bn California Public Employees Retirement System has surpassed $53bn
worth of commitments in climate solutions investments.
The plan aims to commit at least $100bn towards climate
change solutions by 2030. The goal was set as a part of the system’s 2023 Sustainable
Investments 2030 strategy, adopted in November 2023.
Further, the pension plan is focused towards reducing the
carbon emissions intensity of its portfolio by 50% by 2030.
“The energy transition underway represents one of the biggest investment opportunities in history,” said CalPERS Chief Executive Officer Marcie Frost.
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“We are providing the capital necessary to plant the seed for the low-carbon economy of the future,” added the CEO.
At the beginning of the strategy, CalPERS had recognized
$47bn in existing commitments to climate solutions, and additionally made $3.6bn
in commitments over last year. Past year’s commitments were focused on the fund’s
private equity and infrastructure portfolios.
CalPERS climate investments also include a private equity
investment partnership with TPG Rise Climate, which focuses on scaling
climate solutions globally and incorporates energy transition, green mobility, sustainable
fuels and molecules and carbon solutions.
The system is eyeing another $3.2bn commitment in climate
solutions investment which is expected to close in the coming months.
“We believe that making sound, long-term investments in
climate solutions will generate outperformance while also providing the clean
energy needed to meet the increased demands that people have for their homes,
cars and technology,” said CalPERS Chief Investment Officer Stephen Gilmore.
Climate solutions funded by CalPERS over the past year
include an investment in Octopus Energy, a fast-growing renewable energy
company based in the United Kingdom. The firm uses an advanced operating
system to power 6 million homes in the UK and 60 million globally.
Through a partnership with Brookfield, a global investment
firm that acquired a stake in FirstEnergy Transmission, the CalPERS plan
provides support for initiatives focused on the clean energy transition,
including investments to enhance power grid reliability across multiple Midwest
and Mid-Atlantic states.
