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California Pension Fund Goes Green With Muni-Bond Debut

  • Environmentally friendly headquarters apt for Calstrs
  • Even at just 64% funding, pension would see demand for bonds
A design rendering of the new Calstrs building in West Sacramento, California.
A design rendering of the new Calstrs building in West Sacramento, California.Photographer: Calstrs
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The California State Teachers’ Retirement System may have just missed its investment goal but its debut municipal-bond sale Thursday is right on target.

The public pension, the second-biggest in the nation, is selling $281 million in tax-exempt municipal green bonds at a time when wealthy Californians are snapping up such debt to drive down their tax bills and when buyers are increasingly seeking investments intended to lessen the impact of climate change. The pension, which posted a 6.8% return shy of its 7% expectation for the year that ended in June, is using the bond proceeds for an expansion of its West Sacramento headquarters designed to meet high environmental standards, including the ability to achieve zero net energy consumption.