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CalSTRS to triple clean energy, tech investments

  • Five year push toward low-carbon investments
  • Bigger shift if carbon risk becomes clearer
  • Increase to apply across asset classes

The California State Teachers’ Retirement System pension fund plans to nearly triple its investments in clean energy and technology to $3.7 billion over the next five years in a push toward low-carbon investments, the fund said.

CalSTRS, the second-largest U.S. pension fund with more than $188 billion, currently has $1.4 billion invested in clean energy and technology, sister news service Reuters reported. The fund estimated that its investments in the sector could grow in value to nearly $9.5 billion if the risk of carbon emissions becomes clearer to investors.

The public pension fund said the increase would apply to investments in stocks, bonds, private equity and infrastructure. The fund has currently invested more than $500 million in the space through private equity and almost $200 million through infrastructure.

The fund said the move was in response to United Nations Secretary-General Ban Ki-moon’s call to reduce carbon emissions and adapt to climate change ahead of a United Nations summit meeting on climate change on Sept. 23. Clean or renewable sources of energy include wind or solar power that offer environmental benefits such as reducing greenhouse gases.

The move is the latest major reshuffle of public pension portfolios. The California Public Employees’ Retirement System, the largest U.S. pension fund with $300 billion, said it would pull all $4 billion it has invested in hedge funds because it finds them too costly and complicated.