The California Public Employees' Retirement System (CalPERS) announced today they are launching a major new investment program focused on environmental technology. CalPERS will invest up to $200 million in this sector over the next few years.
The CalPERS Environmental Technology Program will make equity investments in companies that provide solutions that are more efficient and less polluting than existing technologies such as recycling; minimizing the use of natural resources; and reducing emissions, refuse, and contamination to air, water, and land.
Said Sean Harrigan, CalPERS Board President. "Environmental technology promises attractive long-term investment returns while doing something positive on a global scale."
CalPERS Board signed off on the program after its investment staff had extensive contacts with up to 200 industry experts of public and private entities, private equity firms, government agencies, think tanks and universities. The new venture will be implemented under guidelines and policies of the Alternative Management Investment (AIM) Program, which has committed more than $19 billion to private equity investments.
The AIM Program will implement the Environmental Technology Program cautiously, given current limited investment opportunities for the still-evolving market, the lack of cost competition, inexperience in some sectors, the need for consumer education and permits, and legal hurdles — all resulting in increased costs. "Our plan is to focus on investors who have a proven track record and avoid overexposure to any one target area by diversifying sectors and geographical areas," said Rob Feckner, Chair of CalPERS Investment Committee.
Specific "green" technologies include renewable energy resources such as wind and solar generators, hydrogen fuel cells, desalination and gray water recycling, and the development of products that use recycled and reused materials. CalPERS is the nation's largest public pension fund with assets totaling approximately $167 billion and serving more than 1.4 million public employees, retirees, and their families.
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