Promoting environmental investment initiatives that represent sound public policy and responsible public investing

Climate change, increased energy demand, and other global environmental trends pose significant risks to investors, corporations and other segments of our global economy. At the same time, these risks also point to a number of readily identifiable opportunities. Trustees of large public pension funds and managers of investment portfolios have a fiduciary responsibility to take appropriate steps to measure, manage and reduce such risks - but they also have the opportunity to leverage their investment power to create sustained, long-term positive value and contribute to the development of new jobs in environmentally-responsible, clean technology-related industries.

• Click here to read about our Green Works program in action in Pennsylvania.

Public Works can help public entities, public officials, and their investment officers to champion responsible investment practices that will:

1. Improve the long-term financial performance of public pension and investment funds by protecting their assets from identifiable environmental risks and benefiting from emerging investment opportunities in the environmental sector.

2. Encourage greater corporate accountability and transparency with respect to corporate environmental risks and liabilities. With increased disclosure, companies will be more likely to confront and address these liabilities through increased incorporation of environmentally responsible business practices while helping investors to make smarter investment decisions.

3. Enable pension funds and elected officials to take a leadership role in encouraging effective corporate environmental stewardship. Investors of state dollars can achieve positive, risk-adjusted returns, while fostering energy savings, sustainable growth, sound environmental and corporate governance practices, and economic development.

Public Works is uniquely qualified to help public pension funds and public officials create environmental investment initiatives. Public Works staff served as consultants to the California State Treasurer, who sits on the board of the California Public Employees Retirement System (CalPERS) - the country's largest employee pension fund. At the California State Treasurer's request, CalPERS embarked on a billion dollar "Green Wave" environmental investment initiative beginning in 2003.

Hickox

Winston Hickox, one of the nation's leading experts on environmentally responsible investing, implemented and managed the "Green Wave" environmental investment initiatives at CalPERS. Hickox, who served as Secretary of the California Environmental Protection Agency, also has years of private sector experience in the real estate investment management field. These combined experiences enable him to bring together the business, government, and environmental sectors to help maximize your efforts.

• Click here to see Hickox's speaking schedule
  
  
• VIDEO: To see a recent speech by Hickox at the University of Michigan at a conference called, "Corporate Strategies that Address Climate Change," click here. NOTE: Hickox's remarks begin at the 46-minute mark of the Webcast.

The other members of the Public Works environmental team include J. Joseph Cullen, former policy director and environmental advisor to the Governor of Pennsylvania and policy director in the office of energy efficiency and renewable energy at the U.S. Department of Energy, David Osborne, who helped manage California's energy conservation and efficiency efforts during that state's energy crisis and provided research to support the California State Treasurer's "Green Wave" initial environmental investing proposals, and Amy H. Nadash, a former White House and Congressional official who is providing research, coordination, and communications services.

Public Works can help other governments successfully create or enhance their own green investing programs by developing necessary background information, building internal and external support for environmental investment initiatives, identifying strategies and opportunities for responsible investing, and helping to communicate the program's successes.

Green Works in Action: Keystone Green Investment Strategy

In 2005, Pennsylvania State Treasurer Bob Casey hired Public Works to research how his office might develop a clean technology investment initiative to create jobs and promote a cleaner environment while meeting his fiduciary duties to invest taxpayer dollars under a "prudent person" standard. Public Works performed extensive research on the investment opportunities in Pennsylvania and the Northeast region of the U.S. based on changing energy and utility regulations as well as emerging market trends. In conjunction with the Pennsylvania Environmental Council, Public Works also conducted a stakeholder interview process to help identify sources of funding for the creation of a Keystone Green Investment Strategy.

Early in the stakeholder process, several participants suggested that the "California Green Wave approach" of working directly with state pension funds would not likely provide an immediately viable option for Pennsylvania. Instead, Public Works engaged five of Pennsylvania's state energy funds (created as a result of utility deregulation in the 1990's) in discussions about contributing some of their assets and expertise to the investment fund. Combined, five of these state based energy funds have pledged to contribute up to $10 million to the Keystone Green Investment Fund.

In addition, Public Works helped the Chief Counsel of the Pennsylvania Treasury Department identify a method by which the Treasurer could use up to $40 million under the Treasurer's discretionary investment control and place it into the Keystone Green Investment Fund. Both of these innovations evolved during the stakeholder interview process that involved state government officials, private sector investors, state energy fund board members, the Pennsylvania Environmental Council, environmental groups, and Governor's Office staff.

In September 2006, State Treasurer Casey announced his Keystone Green Investment Strategy to promote greater public and private investments in clean technologies, such as alternative and renewable energy sources, and provide superior returns for taxpayers. Highlights of the Strategy included:

1. The Keystone Green Fund - The Treasury Department is establishing a new investment fund to attract and leverage private sector investments in clean technology products and firms that will benefit Pennsylvania's economy. The Fund will include up to $50 million in Treasury assets and millions more from Pennsylvania-based energy funds.

2. Active Equity Management - The Pennsylvania Treasury Department will reallocate up to $50 million in Treasury assets from existing investment managers to those who can demonstrate a track record of providing superior returns on their investments in clean technology stocks.

3. Environmental Equity Screens - The Treasury will develop new investment screens for its investment managers and outside consultants to use when evaluating a company's potential exposure to environmental liabilities.

4. Investor Network for Climate Risk (INCR) - Pennsylvania will formally join the INCR, a network of institutional investors and financial institutions that promotes better understanding of the financial risks and investment opportunities posed by climate change.

Public Works continues to work with the Treasury Department, the Pennsylvania Environmental Council and the Clean Energy Group on the implementation of the Keystone Green Investment Strategy.