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CalPERS CEO defends $100 billion climate action plan as "pro‑investment," not divestment
Summary
CalPERS CEO Marcy Frost told the Board of Administration that the system's $100 billion climate action plan focuses on financing the energy transition while maintaining fiduciary duty, responding to a recent report that criticized CalPERS' counting of climate investments.
CalPERS Chief Executive Officer Marcy Frost told the Board of Administration on March 19, 2025, that the pension fund’s $100 billion climate action plan is a pro‑investment strategy intended to finance the energy transition while protecting retirement benefits for 2.3 million members.
Frost said the plan aims to find investment opportunities in both established and emerging technologies and cautioned that divestment would “put symbolism over substance.” She told the board, “Addressing climate change is an imperative, but so too is the fiduciary duty of CalPERS,” and said the system seeks a diversified portfolio that can provide retirement benefits “far into the future.”
The CEO spoke at length after public comment and an investment committee meeting in which climate investing was discussed. Frost addressed a report published two weeks earlier and amplified by a Bloomberg article that alleged CalPERS was overstating its climate investments. She said the report reached "faulty conclusions" and did not give adequate context about how CalPERS counts small portions of traditional energy companies’ climate projects — citing one example in which the system counted $29,000 of investment in its $53,000,000,000 baseline climate solutions.
Frost urged a consistent, science‑based methodology for defining and measuring climate solutions and said CalPERS has consulted outside analysts for nearly two years to refine its approach. She said the methodology "has passed muster with a variety of independent analysts" and that the system is committed to "continual improvement." Frost reiterated that the climate action plan is intended to finance new technologies and opportunities rather than simply divesting from legacy energy companies.
Frost also noted recent organizational items in her report: registration opened for a joint Catalyst conference with CalSTRS in Sacramento in May, and a new recruitment campaign running in Sacramento, the Bay Area and Los Angeles is driving traffic to CalPERS’ careers pages. She closed by thanking Michael Cohen for his service as chair of the Climate Action 100+ steering committee and said he will remain on the committee but step down as chair.
The remarks concluded with Frost inviting questions from the board; none were raised at the time.
