Why are CalPERS interested in Trucost?
Because our data enables pension funds to measure the environmental risk of their portfolios in a quantitative way, and take action to substantially reduce that risk and yet still maintain expected financial returns. Our S&P Carbon Efficient Index gives you the returns of the S&P500 but with half the carbon.
At a time when Senior American political figures are promising to introduce a “cap and trade” energy bill and when there are plans in Congress to submit a law, called 3P, to make polluters pay for the three pollutants of sulphur dioxide, nitrous oxides, and mercury – it makes good fiduciary sense to understand how these costs will effect investments and position portfolios accordingly.
The investment rational in a nutshell – “a free call option on carbon costs going up”.