PA State Treasurer Joins INCR and Creates Clean Technology Fund

Pennsylvania State Treasurer Robert P. Casey, Jr. today announced a new investment strategy for the Commonwealth that will promote greater public and private investments in clean technologies, such as alternative and renewable energy sources, and provide superior returns for taxpayers.

Casey also announced that Pennsylvania is joining the Ceres-coordinated Investor Network on Climate Risk (INCR), a network of institutional investors and financial institutions that promotes better understanding of the financial risks and investment opportunities posed by climate change.

"Treasurer Casey is demonstrating prudent, smart leadership by joining forces with dozens of other investors to better understand the financial risks and investment opportunities from climate change," said Mindy S. Lubber, president of Ceres and director of INCR. "Whether from extreme weather events, regulatory changes or growing demand for renewable energy, climate change is a serious business issue that will have far-reaching consequences for businesses and investors."

Casey said his new Keystone Green Investment Strategy is one of the nation's most comprehensive among institutional investors and the result of a yearlong series of meetings with private sector investors, financial experts, non-profit state energy funds and others. Highlights include:

• The Keystone Green Fund – a new investment fund Casey is establishing 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 several million more from Pennsylvania-based energy funds.
• Active Equity Management – Casey 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.
• Environmental Equity Screens – 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.

Keystone Green is a comprehensive effort to identify investments that can generate superior returns for Pennsylvania taxpayers, while attracting future private sector venture capital investment and job growth in clean technology industries," Casey said.

Brian Hill, President of the Pennsylvania Environmental Council, lauded Treasurer Casey's action, saying, "this new investment strategy by the Treasurer links environmental protection and economic development, and puts Pennsylvania at the forefront of a national trend to promote sustainable economic development. It is both progressive and prudent.

Venture capitalists invested $1.6 billion in North American clean technology companies in 2005 – 43 percent more than the previous year – according to a May 2006 report from Cleantech Capital Group, LLC.

Casey's goal for the $50 million Keystone Green Fund is to achieve solid returns on clean technology investments while enhancing the Commonwealth's economy. Treasury will invest up to $20 million in innovative and profitable clean technology businesses that have a direct nexus to existing or nascent Pennsylvania firms, and up to another $30 million in other clean technology opportunities that offer attractive returns, as well as broad benefits to the state's economy.

Casey said the Pennsylvania Treasury Department will take specific steps to make certain that up to $50 million of its public equity holdings can take advantage of the potential opportunities that clean technology industries offer in the new marketplace. At the same time, Casey said Treasury will adopt a series of written guidelines or "investment screens" for all of its public equity investment managers to consult in assessing companies' potential risks of loss from climate change, as well as changes in international energy economics and carbon regulation.

Casey also announced today that the Pennsylvania Treasury Department has formalized its relationship with the three-year-old Investor Network on Climate Risk. Founded by state and city treasurers and comptrollers, labor pension fund leaders and foundation leaders in 2003, INCR represents over 50 institutions that collectively manage more than $3 trillion in assets. INCR believes that prudence, common sense and fiduciary responsibility should compel most institutional investors to examine the financial ramifications of climate risk and, where appropriate, to invest based upon those risks and opportunities.

Casey said the Treasury Department will work with INCR to insure that investors can obtain greater access to information about how climate change will impact the long-term viability of individual businesses and industries.

The Pennsylvania Treasury Department is directly responsible for investing and making deposits of moneys belonging to many state agencies, as well as local municipalities and individual investors. Approximately $12 billion under Treasury's discretionary authority is placed into various investment pools, each of which has customized goals and objectives. In certain pools, the Treasurer has broad authority to place these moneys in any investments, including equity securities and mutual funds, subject to standards that prudent persons would follow in the management of their own funds.