CalPERS Ups the Ante on 'Clean' Investments

April 20, 2004 ( - The California Public Employees' Retirement System (CalPERS) has decided to invest up to $500 million in companies it deems environmentally responsible.

CalPERS, the nation’s largest public pension fund, will take a position in environmentally screened stock funds, according to California state Treasurer Phil Angelides, who sits on the CalPERS board, Dow Jones reported.

In making the commitment, CalPERS investment officials noted a moderately positive correlation between environmental factors and stock price performance.

The move by the $166-billion pension fund follows its decision on March 15 to make an initial private-equity investment of up to $200 million over the next few years in the so-called “clean” technology sector.

CalPERS’ investments follow a proposal by Angelides that the giant pension fund and the California State Teachers’ Retirement System (CalSTRS) invest a combined $1 billion in publicly traded, environmentally screened funds and $500 million in private-equity investments in the sector. Known as the Green Wave initiative, Angelides’ proposal also calls on the pension funds to demand better disclosure by companies of the financial risks they face from possible changes in environmental regulations.