CalSTRS, the $325.9bn pension fund for Californian teachers is planning to expand its investments in the energy transition and will take further steps to reduce the carbon footprint of its corporate credit holdings the fund revealed.
The Sacramento-headquartered fund pledged in 2021 to reach net zero by 2050 or sooner. With equities still accounting for the largest share of its portfolio (40%), it has begun by shifting a part of its equity holding to track a low carbon index in order to reduce carbon emissions by 14%.
Over the past year, the fund has also received board approval to put in place new measures aimed at reducing the carbon footprint of its corporate credit holdings by 12%, the fund announced in its latest Sustainability Report.
A cornerstone of its net zero strategy is the Sustainable Investment and Stewardship Strategies unit (SISS), which is part of its innovative strategies range.
SISS is CalSTRS’ main vehicle to deploy capital into the energy transition through private market assets that are set to benefit from the shift to renewable energy.
As of January, the fund had invested some $1.3bn in its private markets, with real estate and sustainable infrastructure currently accounting for about half of the portfolio (54%), followed by hybrid investments in climate solutions (34%).
In January, CalSTRS, was part of a $15.bn investment in Generate Capital's sustainable infrastructure platform alognside Australian superannuation fund Hesta and other institutional investors.
Over the next two to three years, CalSTRS plans to increase the SISS fund range to account for 1% of its overall portfolio accounting for more than $3 in assets, the fund revealed this month.
