CalSTRS Leads Way on Energy Productivity Index

CalSTRS on Monday announced its involvement with a project that will create a benchmark for the energy productivity of publicly traded industrial companies.

It’s called the Energy Productivity Index for Companies, and it aims to provide investors with an energy risk profile of certain sectors and companies, among other things.

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The project is a partnership between CalSTRS, ClimateWorks Australia and the US-based ClimateWorks Foundation. CalSTRS is participating in the project as lead investor, providing valuable industry knowledge as well as a portfolio of companies to demonstrate the analysis and engagement methodology.

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CalSTRS Portfolio Manager, Corporate Governance, Brian Rice said, “Improving energy productivity is a business tactic with growing importance. It is associated with mitigating carbon pollution– which in turn reduces business risk. The project will demonstrate the process investors need to implement to identify and engage with companies and succeed in improving energy productivity performance.”

ClimateWorks Australia Head of Research, Amandine Denis said the Energy Productivity Index for Companies project would quantify energy risks and the financial value of improving energy productivity for companies involved in the analysis.

“The project will provide investment funds with a greater understanding of energy-related issues in their portfolios and drive companies to improve their energy performance,” she said.

Ms Denis said investors often could not access the information necessary to help them assess the energy risks faced by companies. Many investors also want to be able to assess the financial benefits that energy productivity can deliver these companies in their portfolio.

“This project will help equip investors with evidence-based information crucial to conducting meaningful engagement with companies on this topic. It will also build an energy risk profile for selected industry sectors and highlight the differences between companies within each sector,” she said.

CalSTRS manages $184 billion in assets for California’s public school teachers.

Photo by Stephen Curtin