News & Analysis

In brief: Sacramento County hears ESG and impact presentation by Verus

Investment consultant advised Sacramento to consider making an ESG investment policy statement.

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Despite the ESG backlash in the US, not all states consider the term a dirty word: Sacramento County Employees’ Retirement System, for example, is open to learning more about ESG and impact investing.

The $11.6 billion pension heard a presentation by investment consultant Verus Advisory on the topic at a board meeting last week. Some highlights:

  • SCERS has “no formal policy or process” for ESG or sustainable investing, the presentation stated.
  • Fossil fuels are permitted within SCERS’ investment policy, although it has “modest” exposure to fossil fuels in its private markets investments.
  • SCERS’ fund manager due diligence includes diversity-related questions “within manager organisations and investment teams”.

Verus’s presentation concluded by suggesting that SCERS could develop an ESG investment policy statement as a next step.

“Since values and morals change from individual to individual, and organization to organization, ESG-specific and socially responsible investing are often viewed as cloudy and confusing areas,” the presentation stated – although Verus also noted that ESG can be a matter of risk mitigation.