15th November 2010
The California Public Employees Retirement System (Calpers), which has a pension fund worth $221.5 billion, and has produced a return of 13.3% over the past year, is based on a model used by HSBC in its Global Climate Change Benchmark index.
The fund's emphasis is on investing in companies with "a material portion" of sales from alternative-energy production and conservation; water, waste and pollution control; or finance activities such as carbon trading, Bloomberg reports .
The HSBC-based model includes 380 securities, and Calpers has placed $500 million since 2006 with external managers who won't invest in "polluting companies," George Diehr, Calpers investment committee chairman said.
"This new index has kept pace with non-environmental investments in recent years, and has outperformed our external environmental managers who have focused solely on excluding polluting companies from their portfolios," Diehr added.