Bottom Line Up Front (BLUF): CalPERS’ ambitious $60 billion climate investment strategy is under fire for its lack of transparency and rigorous environmental standards, raising concerns among stakeholders about the integrity of its climate commitments.
The Details
The California Public Employees’ Retirement System (CalPERS), managing over $500 billion in assets, has set a goal of $100 billion in climate-oriented investments by 2030. As of mid-2025, its investments in climate solutions have surged to nearly $60 billion, with allocations primarily in renewable energy and battery storage. However, the specifics of these investments remain unclear, prompting criticism from environmental advocates.
Critics, including the Sierra Club, argue that CalPERS has failed to provide a comprehensive list of its climate investments or the criteria guiding these decisions. A recent analysis revealed that $3.56 billion of the fund is tied up in major fossil fuel companies, airlines, and plastics manufacturers, raising questions about the effectiveness of its climate strategy.
Compliance Impact
Corporate attorneys, CPAs, and compliance officers should be aware of the potential implications of CalPERS’ investment strategy on regulatory compliance and public perception. Stakeholders are urged to:
- Monitor developments regarding CalPERS’ climate investment disclosures.
- Advise clients on the risks associated with investments in funds lacking clear environmental criteria.
- Prepare for potential calls for increased transparency and accountability in climate finance.
As pension funds face escalating climate risks, it is critical for investment strategies to align with credible environmental standards. The ongoing scrutiny of CalPERS may signal a broader shift towards demanding more rigorous accountability in climate finance across the industry.