CalPERS, the $357 billion pension fund for California public employees, gets credit for engaging companies over the risks posed by firms’ environmental, social and governance practices. (In October, the New America think tank named the fund to its list of 25 Most Responsible Asset Allocators.) With the onset of action on the 17 UN Sustainable Development Goals for poverty reduction, social well-being and climate action, the California pension fund is looking at risks with a broader lens.
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Calling the SDGs a “gift to investors,” Ted Eliopoulos, CalPERS’ head of investments, told a January board retreat that his staff is exploring how its existing sustainable-investment plans align with the Global Goals, reports top1000funds.com.
“The concept of risk may well have to be expanded even further to incorporate the lack of progress toward some of the other aspirations of the sustainable development agenda — such as reducing inequities or [achieving] gender empowerment and equity — which themselves have an impact on macroeconomic factors,” Eliopoulos said.
The SDGs can also help drive returns, says Anne Simpson, CalPERS’ investment director for sustainability. For instance, just four sectors central to the goals — energy, cities, food and agriculture and health and well-being — represent an estimated $12 trillion opportunity each year. “The sustainable development goals are intended to build prosperity,” Simpson told top1000funds.com. “That’s really why we’re interested.”