California State Teachers’ Retirement System (CalSTRS) Chief Executive Officer Jack Ehnes, announced plans to increase current clean energy and technology investments of US$1.4 billion to US$3.7 billion over the next five years in an effort to increase low-carbon investments.
The move is in response to United Nations Secretary-General Ban Ki-moon’s call for bold action to reduce carbon emissions and build resilience to the impacts of climate change ahead of the United Nations Climate Summit on September 23, 2014.
The more than 150% increase will come from clean energy and technology investment holdings in the Public Equity, Private Equity, Fixed Income and Infrastructure portfolios as suitable investments become available. CalSTRS will participate in next week’s summit at the U.N. in an effort to bring attention to the role large institutional investor’s play in financing clean energy and climate change initiatives.
CalSTRS Chief Executive Officer Jack Ehnes stated:
CalSTRS has long supported the case for global action on climate change and is seeing a growing number of investment opportunities in low-carbon solutions, especially as renewable technology costs come down and regional clean energy policies take hold.
CalSTRS Chief Investment Officer Christopher J. Ailman commented:
Targeting the clean energy and technology sector represents a good investment opportunity because it positions CalSTRS for a low-carbon future. If a meaningful price on carbon emissions is established, CalSTRS believes its clean energy and low-carbon investment could grow to almost $9.5 billion, nearly seven times the current level of investment.
Currently, CalSTRS Private Equity Portfolio holds more than US$500 million in investments in solar and wind energy projects located principally in the United States and Europe. Within its infrastructure portfolio, CalSTRS has invested almost $200 million in solar, wind and hydro energy generation and transmission assets located in countries such as Brazil, Chile, United Kingdom, and in Europe and North America.
The California State Teachers’ Retirement System, with a portfolio valued at $188.3 billion as of August 31, 2014, is the largest educator-only pension fund in the world.