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Calif. Treasurer Commits $1.5B Toward Green Tech

February 27, 2004

California's Treasurer Phil Angelides called earlier this month for the nation's largest and third largest pension funds to invest at least $1.5 billion into environmental technologies and environmentally responsible companies. The goal of Angelides' initiative is to improve long-term financial returns for pensioners and taxpayers through investments in the burgeoning environmental technology sector, while also reducing the risks to the pension funds posed by corporate environmental liabilities.

The treasurer’s Green Wave initiative calls on California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System to invest a combined $500 million in private equity investments, venture capital, and project financing to develop "clean" technologies that can provide the pension funds with positive, long-term returns. The two pension funds have a total of $250 billion in assets.

The initiative also calls for the two funds to invest an additional $1 billion into environmentally screened funds through leading active public equity investment managers with proven track records.

CalPERS has already begun studying a clean technology private equity program, with a goal of fashioning a broad, flexible and diversified portfolio of investments that can achieve positive returns in the emerging clean technology investment arena, according to Angelides' press office.

The impact of the investments, should the treasurer's Green Wave Initiative be adopted in full, could be felt across the country, as the two California pension funds are not limited geographically in where they make their investments. With the number of states committing funding and research resources toward clean energy technologies, their green firms could be on the receiving end of some of the investments.

The initiative, when implemented, also could provide a model for other states attempting to grow their clean energy industries.

More information on California's Green Wave initiative is available at: http://www.treasurer.ca.gov/news/greenwave.htm