CalPERS is growing renewable energy portfolio despite government pullback | Opinion

At the California Public Employees’ Retirement System, our job is to make investments that reliably produce the best returns for our $556-billion fund, which provides retirement security for more than 2.3 million active and retired state and local employees.

That’s why, even as the federal government reduces incentives to invest in renewable power, we have increased our commitment to renewable energy sources and to technologies that will help power our economy and adapt our world to rising temperatures and more extreme weather.

In 2023, the CalPERS board approved doubling our portfolio of investments in climate solutions to $100 billion by the end of 2030. This month, our staff will report to the board that our investments now total $60 billion, with another $3 billion in the pipeline.

Across the globe, humankind used more electricity than ever before in 2024 — a trend driven by demand from data centers powering artificial intelligence, greater reliance on air conditioning as temperatures rise and increased electrification of vehicles.

An ever-growing portion of this demand was met by renewable power sources. Led by solar power, renewable energy installations hit record levels for the 22nd consecutive year, according to the 2025 Global Energy Review issued in March by the International Energy Agency.

Global investment in renewables reached a record $386 billion in the first half of 2025 — up 10% from the same time last year. For the first time, renewable energy sources, primarily solar and wind, generated more power than coal. China alone was responsible for 44% of the investment in renewable energy in the first half of the year.

The world’s growing appetite for electricity is a market reality. So is the fact that renewable sources will play an integral role in meeting it. There simply is not enough oil, gas, coal or other traditional fossil fuels that can come online as quickly and economically as the renewable alternatives.

The International Energy Agency predicts that renewables will become the world’s top source of electricity by 2026 at the latest, with solar and wind meeting over 90% of the increase in global electricity demand.

The investments we look for at CalPERS include not only renewables but a broad array of technologies to help our society adapt to changing conditions and transition to a low-carbon future. Examples include AI technology to help spot wildfires early, carbon capture technologies for cement plants and more efficient water management systems. Increasingly, we are looking for opportunities in Europe and other countries as the U.S. scales back tax credits for wind and solar.

Regardless of U.S. energy policy, CalPERS — the nation’s largest public pension fund — will continue investing in renewable energy technology. Smart investors remain committed because they recognize that renewables are the most viable, scalable energy solution available today.

To retreat from these technologies now would not only be bad for the planet, it would hinder the innovation needed to power future economic growth.

Marcie Frost is the CEO of the California Public Employees’ Retirement System.