February 10, 2014

In a letter to its California real estate and private equity managers, CalPERS sent a message asking them to conserve water at the companies they manage on behalf of the pension fund:

Dear CalPERS Manager,

As you well know, California is experiencing one of the worst droughts in decades. Reservoirs are at all-time lows, the snowpack is approximately 10 percent of normal, and some cities could be out of water within three months.

While we can’t create more water, CalPERS is working to do our part to conserve water, and we ask you to join us in doing the same at the companies that you manage for us.

Below are some of the actions that could be utilized to conserve water during this historic drought and we hope you will consider similar measures:

  • Establish a goal to reduce total water usage.
  • Enlist active participation from facility staff and occupants in reporting leaks and other water usage issues.
  • Post signage to promote water conservation in restrooms, break areas and other facilities used by building occupants.
  • Adhere to local water ordinances and conservation protocols where applicable.

We are seeking conservation measures because it is the right thing to do for our State and because they reflect our CalPERS Beliefs (PDF) as an institution.

Investment Belief 4 states that “Long-term value creation requires effective management of three forms of capital: financial, physical and human.” As part of this belief, we seek to engage with investee companies and external managers on governance and sustainability issues, including “Environmental practices including but not limited to climate change and natural resource availability.”

While I write this email, Sacramento expects up to three inches of rain this weekend. This is good news, but Sacramento and the State, are behind in rainfall. The conservation measures we are taking, and ask you to consider, are a good start to deal with one of the driest years in California’s history.