CalPERS to double climate investments, consider asset sales

Nov 3 (Reuters) - California's top public pension fund on Friday said it will more than double its climate-focused investments to $100 billion by 2030 and consider selling stocks in companies with poor plans for the energy transition.

Staff for the California Public Employees' Retirement System (CalPERS) said the plan will boost returns for the $444 billion system, the largest in the U.S., plus cut in half its portfolio's "emissions intensity," a measure of emissions relative to output.

"We believe there's a full opportunity set coming about from the transition to a lower-carbon economy," said Peter Cashion, CalPERS head of sustainable investing, in a call with reporters on Thursday.

The moves represent a big bet on new technologies and that businesses and regulators will embrace steps to limit global temperature increases as CalPERS allocates retirement assets in the heavily Democratic state.

Green energy investing faces much debate during a recent wave of oil-and-gas mergers and big writedowns for windfarm projects. But U.S. solar market values have hit record highs while gas prices have soared, supporting the business case for new infrastructure.

Cashion said the new investments will be spread among companies that do things like mitigate emissions or make infrastructure more resilient to climate change, selected across different asset classes.

New laws in California require more corporate climate disclosures. Additional proposed legislation would require state funds to sell fossil fuel stocks, following systems in other states such as Maine.

CalPERS has opposed the idea, saying it would do little to limit emissions and could compromise returns. Cashion called it "a very inelegant solution."

But he said CalPERS will develop a process to evaluate whether a company is prepared for stronger climate regulations or shifts in consumer demand. It will consider factors such as whether a company has plans validated by the Science Based Targets initiative, backed by the United Nations and business and environmental groups.

For laggards, he said, "we believe that an underweight or some tactical change would be appropriate."

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