The board of CalPERS has directed staff to look into aligning its $357 billion portfolio with the UN’s sustainable development goals.The largest pension fund in the US is already one of the global leaders in engaging with companies on ESG risks, but by adopting the UN SDGs it would embrace more specific social objectives, such as ending poverty, hunger and gender inequality.
CalPERS’ chief investment officer Ted Eliopoulos characterised the 17 SDGs as a “gift to investors” at the board’s retreat meeting on January 16 in Petaluma, California. He said investment staff would report back to the board at its July meeting regarding how the goals could connect with CalPERS’ existing sustainability investment plan. Other institutional investors will be invited to that meeting to discuss their experiences implementing the SDGs.
The 17 goals address everything from the environment to various social principles. But Eliopoulos acknowledged in an interview that whether aligning a portfolio with them when they are combined will lead to better returns hasn’t been tested.