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May 20, 2011
CalPERS Will Integrate ESG Considerations Across all Asset Classes
    by Robert Kropp

At the Ceres Conference 2011, CalPERS CEO Anne Stausboll announces that the pension fund will expand its integration of environmental, social, and corporate governance (ESG) factors to include all five asset classes in which it invests.


In the keynote address delivered at the Ceres Conference 2011, Anne Stausboll, the CEO of the California Public Employees' Retirement System (CalPERS), announced that the nation's largest public pension fund will integrate environmental, social, and corporate governance (ESG) considerations into investment decision-making across all asset classes.

"Five months ago, Ceres convened a diverse group of key economic players at CalPERS headquarters in Sacramento," Stausboll said. "As part of this Roundtable, we asked each signatory to make a specific commitment."

The decision by CalPERS to expand its integration of ESG factors, Stausboll said, "reflects our belief that a deep understanding of sustainability issues is critical in achieving successful long-term investments results."

According to Clark McKinley, an Information Officer at CalPERS,"We have various approaches to ESG in asset classes.That includes $500 million+ in internally managed investment in global public companies based on positive environmental practices, $1.5 billion in private equity clean tech investment, and ESG principles to guide external managers who invest in emerging markets on our behalf."

The fund also invests in sustainable real estate projects and green development funds, and incorporates ESG factors into its Global Principles of Accountable Corporate Governance, McKinley reported. The Principles serve as a "framework by which CalPERS executes its proxy voting responsibilities," the document states.

McKinley added, "We are developing ESG integration across the entire CalPERS investment portfolio, including all 5 asset classes of public equity, private equity, fixed income, real estate and inflation-linked (commodities, infrastructure, forestland, inflation-linked bonds). We have an Investment Office team developing a plan to begin the integration, initially with a single sector like 'water conservation,' to be initially presented to the CalPERS Board's Investment Committee in August 2011, with a formal report in September."

 

 
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