CalPERS Real Estate Investments Enhanced by Sustainable and Responsible Contracting Practices

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Around the investment industry, the word “sustainable” has multiple meanings. At CalPERS, we strive to have sustainable investments, meaning that they will remain profitable over the long term. This long-term horizon requires us to take into consideration environmental and social risks and opportunities for our investments.

CalPERS has a long-standing commitment to sustainable investment and a proud history of leadership and innovation in the field. The goal of the CalPERS Investment Program is to achieve long-term, sustainable, risk-adjusted returns consistent with our fiduciary duty to serve our members.

Sustainable Practices Boost Pension Returns

We can look to the CalPERS Real Estate portfolio to provide an example of how sustainable practices add value to the pension fund through energy efficiency measures, water conservation, and use of environmentally friendly cleaning supplies and materials. These practices can result in reduced operating costs while adding the benefit of improved workplace health, safety, and productivity.

Our policies and principles support these kinds of sustainability initiatives, because they support the long-term performance of our investments. Our Responsible Contractor Program (RCP) Policy states, “CalPERS has a deep interest in the condition of workers employed by CalPERS and its managers and delegates.”

CalPERS Goes Green at City National Plaza

At a CalPERS-owned office building in downtown Los Angeles, the RCP policy and environmentally sustainable practices work in alignment to benefit tenants, workers, the environment, and the bottom line.

In collaboration with an RCP-certifying janitorial company, CommonWealth Partners, one of CalPERS’ external managers, implemented a green cleaning program at CalPERS’ Los Angeles office building, City National Plaza. The green cleaning program introduced training for janitors to use safer, cleaner, and more environmentally friendly cleaning supplies and equipment.

Our Commitment to Sustainability

CalPERS’ mission is to provide retirement benefits to more than 1.9 million members and their families. As part of this responsibility, we promote sustainable operations that protect and enhance value over the long term, benefiting our members. To learn more, read the Sustainable Investing resources on our website.

City National Plaza: A Sustainable Practices and Responsible Contracting Case Study

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City National Plaza, Los Angeles

  • Summary: Since we acquired the office building in 2013, specific sustainability strategies included an update to the lighting system, use of occupancy sensors, better on/off controls for tenant equipment, a retrofit of the cooling towers, installing efficient water fixtures, and implementation of a green cleaning program.
  • Energy: 38% reduction in annual energy use
  • Water: 40% reduction in annual water use
  • Annual savings (impact to Net Operating Income): $4.3 million