US - The US$171bn California State Teachers' Retirement System (CalSTRS) has committed to almost double its climate change investments and increase the diversity of its manager portfolios.
Danyelle Guyatt, a principal at Mercer, commented: "The fact that pension funds' commitment to sustainability continues to grow in the face of declining world economic activity and increased market volatility demonstrates that this is a long term strategic shift in pension fund thinking; one that is not thrown off course by short term market gyrations."
CalSTRS also said it would increase its leadership campaigns aimed at climate risk management and diversity awareness, and could "comfortably" increase the CGU portfolio to $6bn, without altering staffing levels.
Winston Hickox, former California Environmental Protection Agency secretary, who also assisted with the design and implementation of CalPERS' environmental initiatives, commented: "The fund has come to the conclusion that climate change is likely to have a significant impact on the global economy, now and in the future. [CalSTRS'] investment programmes are leading the effort to improve the opportunity for investors to realise a 'green alpha' in the equities markets."
Joanna Lee, director of communications and corporate partnerships at the Carbon Disclosure Project (CDP), said CalSTRS' proposed increased investment in climate change was a material amount that showed real leadership within the industry.
She added: "As soon as you understand which companies are best placed to operate in a carbon constrained world, it gives you a better idea of where to invest."
CalSTRS also said it would work with investors to raise the profile of environmental investments on the global stage.
Kirsten Snow Spalding, senior adviser for Ceres, a foundation for sustainable investment, said the move was an indication of a growing trend in the institutional investor community: "The fund's two climate risk shareholder proposals mark a new level of engagement for the second largest public pension fund in the US."
A spokesperson from CalSTRS was unavailable for comment.
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