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The Greenhouse Gas (GHG) Reporting Project is a joint effort by CalPERS, the California State Teachers' Retirement System, and the Carbon Disclosure Project (CDP) to engage electric power utilities in reporting emissions of carbon dioxide and greenhouse gases that may contribute to potentially costly global warming.
"This effort is focused on improving adequate, accurate and timely data transparency within the utilities industry," said Rob Feckner, CalPERS Board President. "We believe sound environmental stewardship is a major corporate governance issue because without it, we risk potential negative impacts on our investments and the environment."
The two pension funds will develop questions for the industry with CDP, a coalition of institutional investors with more than $21 trillion in assets, that has developed a process for informing publicly-traded companies of shareowner concerns about the impact of carbon emissions on long-term company value.
The questions will be included in the next CDP survey that will be sent to the Financial Times 500 companies early next year. CalPERS will also ask utility companies in its investment portfolio to respond to the survey, and to consider other forms of disclosure made available by the California Climate Action Registry, the Chicago Climate Exchange, or the Global Reporting Initiative (GRI) Sustainability Report.
The request for investment-relevant information on carbon emissions follows an earlier CDP request that was supported by 155 investors, including CalPERS. The CDP recently reported that more U.S. corporations now factor climate change into the risks and opportunities faced by their businesses.
"Major investors and institutional investors are waking up to climate change risks and opportunities," said Charles Valdes, Chair of the CalPERS Investment Committee. "As fiduciaries, we have an obligation to mitigate against climate risks to help protect our investments and our beneficiaries."
Power plants typically emit large quantities of carbon dioxide to absorb heat needed for life-sustaining temperatures in the atmosphere. Elevated concentrations of the gas could lead to environmentally-threatening high temperatures, however.
CalPERS signed on to the Global Carbon Disclosure Projected in February 2005, when it also sought improved emissions data transparency in the auto industry by supporting shareowner proposals at major auto manufacturers.
CalPERS is the nation's largest public pension system with assets of more than $196 billion. The System provides retirement and health benefits to more than 1.4 million State and local public employees and their families. For more on CalPERS, visit www.calpers.ca.gov.
