California's Green Wave Environmental Investment Initiative

California Green Wave Investing Strategy

In 2004, phil Angelides, California State Treasurer, launched the "Green Wave" Environmental Investment Initiative. He called on the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS) to implement a four-pronged investment strategy to bolster their financial returns, create jobs, clean up the environment, and combat global warming.

Demand Environmental Accountability and Disclosure

Concentrated risk argues for the need for better investor intelligence and information, illustrated by the fact that a small number of companies appear to face the greatest potential regulation and litigation.

UPDATE: February 14, 2005 -- As the Kyoto Protocol took effect, Angelides wins CalPERS' approval of a new corporate environmental accountability initiative. Under this new initiative, CalPERS will prod companies to improve their environmental practices,

Target Private Investment in Environmental Technologies

Clean technology has emerged as the sixth largest venture investment category in the U.S. and Canada, behind information technology, software, biotechnology, health care, and telecommunications. According to Cleantech Venture Network, LLC, in 2002, investments in energy-related clean technologies represented nearly half (45.5 percent) of all clean technology investments. The remaining investments in clean technologies included enabling technologies -- technologies developed by biological, computational, and physical scientists and engineers that enable better use of natural resources and greatly reduce ecological impact (14 percent); materials and nanotechnology (13.8 percent), materials recovery and recycling (8 percent), and water-related technologies (4 percent). (Source: Cleantech Venture Network, LLC, Venture Monitor Q1 2003.)

Invest in Stocks of Environmentally Responsible Companies

Companies that engage in environmentally responsible practices can achieve better financial results, according to a number of studies.

Audit Real Estate Portfolios to Boost Long-Term Value

CalPERS and CalSTRS hold more than $16 billion in real estate holdings in 22 countries around the globe, with over half of those holdings in office and industrial space.

The federal government has encouraged energy efficiency through the national Energy Star program. Companies - including product manufacturers, builders, and retailers - that actively participated in the Energy Star program through voluntary partnerships with the U.S. Environmental Protection Agency outperformed companies that were not involved in the Energy Star program by more than 12 percent during the two-year period of 2000-2001.

California's tough energy efficiency standards have resulted in substantial cost savings. This efficiency is due in part to stringent energy efficiency standards for buildings and appliances that have been in effect and periodically updated since 1978. Through the Energy Efficiency Standards for Residential and Nonresidential Buildings (also known as Title 24 building standards) along with standards for energy efficient appliances, California has saved more than $20 billion in electricity and natural gas costs since 1978. It is estimated California will save $57 billion by 2011 due to these standards. (Source: California Energy Commission, http://www.energy.ca.gov/title24/index.html.)

A minimal upfront investment of about 2 percent of construction costs in sustainable building practices and products typically yields life cycle savings of more than 10 times the initial investment, according to a recent study commissioned by California's Sustainable Building Task Force.