US - The New York State Common Retirement Fund (CRF) has hired FTSE Environmental Technology 50 and HSBC Global Climate Change Index to invest a combined US$200m in green equity investments, the pension scheme announced.
The assets are part of CRF's Green Strategic Investment Program which was set up last year to invest $500m over three years. The funds are managed internally and CRF staff will invest in companies included in the two indexes.
New York State Comptroller Thomas P. DiNapoli said: "This move should help deliver strong risk-adjusted returns to the Fund while providing capital to environmentally sustainable companies that are providing solutions to climate change."
Pension funds around the world are taking a closer look at how changes in the environment can impact returns and how they can encourage the development of clean energy.
FTSE's director of responsible investment Will Oulton said: "Climate change is a driving factor in the social, political and economic shift towards a low carbon world. As this shift occurs, investment in environmental markets is becoming an increasingly important part of institutional portfolios."
Joaquim de Lima, global head of equity quantitative research at HSBC, said: "Climate change is set to be one of the defining investment themes of the future and, having identified this macro challenge early on, the Fund will be positioned to drive the climate change agenda."
CRF's hires come on the heels of an announcement by Norway's Government Pension Fund - Global that it had expanded its environmental focus during the second quarter to include water-related risks. The scheme said the potential of a global water shortage presents a financial risk to some 1,100 companies in its investment portfolio. (Global Pensions; August 14, 2009)
The FTSE ET50 index tracks the 50 largest pure-play environmental technology companies world-wide. The HSBC Global Climate Change Benchmark Index includes 377 companies best positioned to profit from the opportunities presented by climate change.
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