The $502 billion California Public Employees’ Retirement System (CalPERS) today announced $10 billion in investment activities related to the energy transition, including private market investments.
The plan, which sets out to invest $100 billion in climate action by the end of 2030, includes several initial steps, including the introduction of an “enhanced accountability” process for companies to disclose and strengthen their plans for advancing the energy transition.
In the civil market, nine investment agreements were signed for more than $1.1 billion in sectors supporting energy production and distribution, freight transportation and supply chain optimization. A total of $3.6 billion in investments is currently under consideration. Some of these investments are expected to be finalized in the coming weeks and months.
Investment officials are expected to present additional details about the Climate Action Plan at the July 15 CalPERS Board of Trustees meeting.
CalPERS had committed about $47 billion to climate change efforts at the start of the plan in November 2023. By the end of 2030, that amount is expected to more than double, reducing the carbon intensity of the pension fund’s portfolio by at least 50%.
“The CalPERS Climate Action Plan aims to position our pension fund as a global partner of choice in climate investing,” said Peter Cashion, managing director of investments for the CalPERS Sustainable Investment Program. “To do this, we need diversified investments and tools to generate achievable excess returns during this historic transition to a low-carbon future.”
Cashion joined CalPERS over a year and a half ago from the World Bank’s International Finance Corporation (IFC), where he served as Global Head of Climate Finance and Chief Investment Officer for the Financial Institutions Group (FIG). In this role, he led the execution of $3.7 billion in annual climate investments in financial institutions, representing 34% of FIG’s investments, and established a global strategy to accelerate a just transition to a green economy by leveraging the financial sector, mobilizing institutional investors, and developing infrastructure to move markets toward alignment with the Paris Agreement.
