Mergers & Acquisitions names the 2021 PE Innovators in ESG, including, The California Public Employees’ Retirement System.
The California Public Employees’ Retirement System commitment to ESG isn’t just theoretical. The pension fund has pledged time and resources to help Carlyle lead a group of about a dozen asset managers with $4 trillion in investments in tow to standardize collection metrics. The push is typical of Calpers’ proactive approach to sustainability. In 2016, the limited partner set environmental goals across fixed income, private equity, real assets, and equities in line with the United Nation’s six principles for responsible investing.
The resulting commitment has resulted in investment changes, and perhaps just as importantly, thought leadership on the topics. The Calpers investment team is charged with researching portfolio companies’ impact on water scarcity, economic inequality, and disruptive technologies. That the mantle is taken up by the investment team highlights the economic lens through which Calpers sees potential climate-related transition projects and impacts.
When, for example, a 2015 review of the fund’s portfolio found that 80 companies out of 10,000+ generated half of total emissions, Calpers helped launch Climate Action 100+. The initiative is a partnership with Institutional Investor Group on Climate Change and Principles for Responsible Investment designed to engage with the top emitting publicly traded companies. Consistent with the Paris Agreement, participants push these companies to reduce emissions at every segment of the value chain to hold global warming to 2 degrees Celsius over the next century.