California pension fund loses 71% of $468 million clean energy investment, refuses to explain how
By isabelle // 2025-10-30
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  • CalPERS lost 71% of a $468 million green energy investment.
  • The fund's value plummeted from $468 million to just $138 million.
  • This represents a catastrophic loss of more than $330 million for public employees.
  • The investment was a politically-driven ESG strategy that proved financially unsound.
  • CalPERS has declined to provide transparency on the details of the failed investment.
The retirement futures of California’s public employees have taken a massive hit thanks to a disastrous bet on "green energy". The California Public Employees’ Retirement System, known as CalPERS, lost roughly 71% of its $468 million investment in a clean-energy and technology fund. This catastrophic loss, uncovered through state records, highlights the profound risks of mixing pension fund management with politically popular but financially unsound environmental, social, and governance, or ESG, strategies. The CalPERS Clean Energy & Technology Fund, launched in 2007, has seen its value plummet from the original commitment of $468.4 million to a mere $138 million as of March 2025. This represents a loss of more than $330 million, a sum that was incinerated even after managers collected at least $22 million in fees. For the public employees and taxpayers who are ultimately on the hook, this represents a profound breach of fiduciary trust.

A costly green fantasy

This fund was born during the green energy boom of the late 2000s, a period when governments and investors poured billions into clean-energy ventures. The fund was managed by Capital Dynamics, which at the time expressed a specific focus on U.S. solar energy projects. A Capital Dynamics-sponsored book on clean energy investing later noted the fate of one such company, Evergreen Solar, stating, "Once a rock star in the solar industry, Evergreen Solar was not able to keep up with the competition from China." This narrow, ideologically-driven focus proved to be a financial disaster. The green energy sector was flooded with competition from low-cost Chinese producers, leading to the collapse of numerous companies. The most infamous example, Solyndra, left U.S. taxpayers on the hook for over $500 million. CalPERS’ fund appears to have followed a similar trajectory of failure, chasing green credentials over solid returns. The sheer scale of this financial misstep becomes clear when considering the alternative. Had the $468 million been placed in a simple, low-fee S&P 500 index fund with dividends reinvested, the investment would be worth approximately $3 billion today. The gap between that potential outcome and the current reality is a testament to the staggering cost of this failed green energy experiment.

A wall of secrecy

When pressed for details about how this massive loss occurred, CalPERS has retreated behind a wall of secrecy. The pension fund declined to provide management contracts or investment specifics, citing legal exemptions for alternative investments under state law. This lack of transparency is a serious concern for those whose financial security depends on these decisions. "The public should have a right to know how public money is being invested," said David Loy, legal director for the First Amendment Coalition. "This is a serious transparency concern if the public doesn’t have visibility into how public money, especially pension funds, are being invested and to what degree of risk." Marc Joffe, a public finance expert at the California Policy Center, described the situation as showing "the combined dangers of private equity and ESG investment." He noted it is "a very opaque investment choice that appears to have been chosen because of its green credentials, and yet it’s now generated a huge loss for taxpayers and retirees." Ultimately, this story is about more than one bad investment. It is a case study in what happens when massive public institutions prioritize political trends over their fundamental duty to protect the retirement savings of hardworking people. The green energy mirage has cost CalPERS hundreds of millions of dollars, proving once again that when the government bets your retirement on a fantasy, it is the public that is left paying the price. Sources for this article include: ZeroHedge.com TheCenterSquare.com WashingtonExaminer.com
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