Real Estate Environmental Strategies

The real estate environmental strategy's focus is to generate attractive investment returns while adopting environmental and green building technologies in areas, such as energy efficiency, water conservation, waste stream management and indoor air quality, within the overall real estate portfolio.

CalPERS Board has set an energy reduction goal of 20 percent in its core real estate portfolio over the next five years. The pension fund owns approximately $5 billion of core real estate that includes investments in office, retail, industrial, and apartment properties.

The real estate environmental strategy also supports green building initiatives and continues to explore investments that fit within the Leadership in Energy & Environmental Design (LEED)/Energy Star requirements. Here are some other significant actions and strategies:

  • Based on core portfolio data for 2005, overall energy savings for the year were 6.9 percent.
  • CalPERS asked real estate partners to report on waste recycling for 2005 as part of its quantitative data gathering process. Two partnerships recycled the equivalent of 68 to 70 percent of each of their total waste tonnages.
  • In response to CalPERS surveys, real estate partners reported such energy savings methods as adjusting or reprogramming of temperature control systems, installing sensor-operated flushers and faucets, and sorting scrap metal and other materials for recycling.
  • Going forward, some core and non-core partners reported plans to purchase environmentally efficient products, use internal monitoring tools to look for patterns of waste, expand their environmental program to include international investments, and to hire consultants to educate property managers about environmental impacts of tenants' actions.

Dated: 06-05-2006