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Super funds urged to think green
Superannuation funds need to consider making allocations to clean technology investments that will also boost returns, a US pension fund leader urges.
CalPERS retiring chief executive officer Fred Buenrostro said his fund decided in 2004 to commit $1.5 billion to clean-tech investments.
“If we don’t start looking at sustainable investments, we won’t be helping the long-term outlook for our members,” he told the International Responsible Investment Conference in Melbourne.
“We can’t achieve those returns without a sustainable economy.”
While the Californian fund has so far only invested US$750,000 in private equity investing in developing clean technologies, it has plans to significantly expand this allocation.
“This is not about following the crowd, it is about investing in future trends,” Buenrostro said.
“We expect to eventually be allocating 20 per cent of our investments to sustainable investments.”
The fund has now included clean technology investments along with commodities and infrastructure as a fifth asset class in the investment line-up.
“CalPERS also has a strong belief that future job creation will come from clean technology, which is the fund acting in a socially responsible manner,” he said.
“This will create long-term returns that are sustainable.”
Investing in clean technology industries still requires the same processes of checking corporate governance and the sustainability of businesses.
“We are not looking at giving some exotic investment millions of dollars,” Buenrostro said.
“CalPERS will still analyse all the risks before making investments.”
He said the challenge was to make investments in this area but warned there were often opposition to such moves from various sources.
“Don’t be stopped by the consultants,” Buenrostro said.
“The challenge is to see the opportunities, pursue them and make good investments.”
AUTHOR
By Wilkinson
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