CalPERS signs Montreal Carbon Pledge

The California Public Employees’ Retirement System (CalPERS) has committed to measuring and publicly disclosing the carbon footprint of its investment portfolio by signing the Montreal Carbon Pledge, an initiative organised by the United Nations-supported Principles for Responsible Investment (PRI), the country’s largest public pension fund said in a statement on Thursday.

The commitment comes just days after the UN Climate Summit, held in New York earlier this week, when CalPERS along with nine other pension funds and institutional investors said they would pursue investments in climate-resilient infrastructure projects.

In addition to mapping the carbon footprint of its investments, CalPERS will also use these findings to formulate a strategy and/or set portfolio carbon footprint reduction targets, according to the statement.

CalPERS, which has approximately $300 billion in assets under management, will begin measuring its carbon footprint, starting with its equities portfolio, by December 2015. It did not specify when it would do so with its other asset classes, which include infrastructure.

“This pledge signifies our continued commitment to better understand our own footprint and help forge solutions to serious climate change issues,” CalPERS board of administration vice president Priya Mathur said. Mathur represented CalPERS at Thursday’s PRI annual conference when the Montreal Carbon Pledge was launched.

“The pledge is aligned with CalPERS Investment Beliefs that state long-term value creation can be achieved by managing financial, physical, and human capital, which includes a strong understanding of climate risks and opportunities,” the fund said.

Through the Montreal Carbon Pledge, PRI seeks to attract $3 trillion of portfolio commitments in time for the UN Climate Change conference in December 2015, PRI said in a separate statement.

“The first step to managing the long-term investment risks associated with climate change and carbon regulation is to measure them, and this initiative sets a clear path forward,” PRI managing director Fiona Reynolds said.

Based in Sacramento, CalPERS administers health and retirement benefits on behalf of 3,064 public school, local agency and state employers. The institution counts more than 1.6 million members in its retirement system and more than 1.3 million in its health plans.