Dive Brief:
- The California State Teachers’ Retirement System is appointing global investment manager Ninety One to oversee a $150 million sustainability mandate, the firm announced Tuesday.
- The mandate was awarded to the private asset manager's $4.2 billion Global Environment Strategy equity portfolio, per a release. The portfolio provides exposure to long-term growth opportunities focused on decarbonization and a net-zero transition.
- Ninety One’s decarbonization strategy aims to invest in businesses that focus on three key areas of sustainability: renewable energy, electrification and resource efficiency. The portfolio is overseen by its Head of Sustainable Equity Deirdre Cooper and Graeme Baker, who co-manages the portfolio.
Dive Insight:
The $150 million allocation to the environmentally-focused investment strategy will allow CalSTRS to build on its sustainability targets. These include reaching net-zero emissions across its investment portfolio by 2050 or sooner and reducing emissions from its portfolio by 50% by 2030.
CalSTRS is the nation’s largest teachers-only retirement system, serving over one million California-based public school teachers and their families, and the second-largest public pension fund, behind the California Public Employees Retirement System.
“We believe that Ninety One’s Global Environment strategy aligns with our commitment to deliver financial performance while simultaneously creating positive sustainability outcomes,” CalSTRS Investment Director Kirsty Jenkinson said in the Oct. 15 release.
Ninety One — established in South Africa and currently headquartered in the U.K. — has over $170 billion assets under management and an investment strategy that has sustainability as a “core tenet,” according to its website.
The asset manager said decarbonization strategies provide investors with the ability to “leverage to long-term structural growth, a complementary return profile lowly correlated to peers, and positive environmental impact by financing companies that are solving the world’s environmental challenges,” with regards to the new mandate.
CalSTRS has been a vocal advocate for tackling the climate crisis and investing in sustainability solutions. Last month, the teachers’ fund joined CalPERS, the New York State Common Retirement Fund and the New York City Comptroller’s Office, alongside UBS Asset Management, BNP Paribas Asset Management, Sierra Club Foundation and over 500 others to urge global governments to “take robust action” to address the climate crisis at the COP29 climate forum and enact policies to unlock the private capital needed to support a green transition.
A climate agenda from the COP29 president initially excluded any references to a fossil fuel phase out or transition, a goal agreed upon at COP28.
