Nation’s Largest Investors Call for ‘Green Recovery’

A group of 44 investors managing more than $1.7 trillion in assets called on Congressional leaders today to include significant funding for energy efficiency, clean energy and clean transportation in the economic stimulus bill being debated this week on Congress.

In a letter delivered this morning to House and Senate leaders and the Obama administration, U.S. and European investors called for longer-term green economic incentives, including extending the renewable energy Production Tax Credit five or more years; providing substantial funding for energy efficiency programs, such as retrofitting buildings; and modernizing the aging and inefficient electric power grid.

“Before you are a range of policy measures to stimulate research, development and deployment of cleaner, more efficient technologies at the scale necessary,” states the letter, citing the bill’s dual potential to create green jobs and curb global warming pollution. “The economic recovery package should not pick technological winners, but rather should aim to bring forward a portfolio of technologies that both enable reductions in greenhouse gas emissions and promote America’s energy security.”

The letter, coordinated by Ceres and the Investor Network on Climate Risk, was signed by some of the world’s largest institutional investors, asset managers, state treasurers and controllers, including Deutsche Asset Management, F&C Asset Management, the California Public Employees’ Retirement System (CalPERS), New York State Comptroller’s Office, California State Teachers’ Retirement System (CalSTRS), Florida State Treasury and New York City Comptroller’s Office. See full list below.

“The economic downturn provides a historic opportunity for government to take charge of the fight against climate change rather being than a reason to put off action,” said Kevin Parker, global head of Deutsche Asset Management, one of the world’s leading climate change investors. “A ‘green’ stimulus will also have a wider effect by providing leadership for additional investment from the private sector.”

“An energy economic stimulus package would not only be good for the environment, saving energy and reducing greenhouse gas emissions, but also good for the economy, leading to the creation of jobs,” said New York City Comptroller William C. Thompson, Jr., whose office oversees more than $100 billion in pension fund assets.

“The economic stimulus package is a golden opportunity to stake out America’s leadership in driving energy efficiency and the emerging clean energy global economy,” added Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk. “Strong green incentives that send clear market signals to the business community will lead to new jobs and new industries.”

Calling it the “fuel of first choice,” the letter touts energy efficiency as having the most potential upside among the bill’s green provisions.  “We recognize that more efficient use of the energy we already produce is one of the fastest, easiest and cheapest ways to significantly reduce emissions and improve the bottom line of many companies in which we invest, especially with demand for energy increasing,” the letter states.

In addition to funding activities such as building retrofits, the letter recommends that stimulus funds be steered to states that adopt energy efficiency resource standards and allow their utilities to give higher preference to energy efficiency over creating new supplies.

Investors warned in the letter that failure to extend the Production Tax Credit would likely trigger a sharp decline in renewable energy projects, leading to significant job losses and reduced capital investments. The letter cites a study by the consulting firm, Navigant, showing that “historically, the PTC expiration has caused a 73 percent to 93 percent market drop to around 400 MW of annual installations” in the U.S.

“Our ability to continue to invest in the renewable energy and energy efficiency industries, and accelerate the growth of these industries, depends on a comprehensive and stable set of supportive policies, including the long-term extension of the PTC,” states the letter.

The letter also highlights the need to modernize and improve the nation’s electric grid. Significant investments to digitize and automate the power grid would greatly reduce energy waste, greenhouse gas emissions and other costs. Such improvements would also make it easier to link wind and solar power sources, often located in remote rural areas, to major population centers.

Signatories

PENSION FUNDS, STATE TREASURERS AND STATE/CITY COMPTROLLERS

California Public Employees’ Retirement System 
California State Controller
California State Teachers' Retirement System 
California State Treasurer
Connecticut State Treasurer
Florida State Treasury
Illinois State Board of Investment 
Illinois State Treasurer
Maine State Treasurer 
Maryland State Treasurer 
New Jersey Division of Investment 
New Jersey State Investment Council 
New York City Comptroller
New York State Comptroller
Oregon State Treasurer 
Rhode Island State Treasurer 
Vermont State Treasurer 
Washington State Treasurer

ASSET MANAGERS, INVESTOR COALITIONS AND FINANCIAL SERVICES 
FIRMS

Boston Common Asset Management 
British Columbia Investment Management Corporation
Calvert Group 
Deutsche Asset Management 
Ethical Funds Company 
F & C Asset Management 
Generation Investment Management 
Green Century Funds
Local Authority Pension Fund Forum 
Pax World Funds 
Portfolio21 
Trillium Asset Management 
Tri-State Coalition for Responsible Investment 
Walden Asset Management 
Winslow Management

ENDOWMENTS AND OTHER INSTITUIONAL INVESTORS

American Baptist Home Mission Society 
Dominican Sisters of Hope 
Friends’ Fiduciary Corporation 
Mercy Investment Program 
Presbyterian Church USA 
Presentation Sisters, New Windsor, NY 
Sisters of Mercy Regional Community of Detroit Charitable Trust 
Sisters of St. Dominic of Caldwell, NJ 
Province of St. Joseph of the Capuchin Order 
The United Methodist Church- General Board of Church & Society 
Unitarian Universalist Association 
Ursuline Sisters of Tildonk, U.S. Province

About INCR & Ceres

The Investor Network on Climate Risk (INCR) is a $7 trillion network of institutional investors and financial institutions that promotes better understanding of the financial risks and investment opportunities posed by climate change. INCR is coordinated by Ceres, a coalition of investors and environmental groups working with companies to address sustainability challenges such as climate change.