California’s pension fund is losing 71% of its $468 million in clean energy investments, and refuses to explain why

• CalPERS lost 71% of a $468 million investment in green energy.
• The value of the fund decreased from $468 million to only $138 million.
• This represents a catastrophic loss of more than $330 million for public sector employees.
• The investment was a politically motivated and ESG strategy that has proven to be financially unsound.
• CalPERS declined to provide transparency on the details of the failed investment.

The retirement futures of California’s public sector employees have taken a huge hit thanks to a disastrous bet on “green energy.” The California Public Employees Retirement System, known as CalPERS, lost nearly 71% of its $468 million investment in a clean energy and technology fund. This catastrophic loss, revealed through state records, highlights the profound risks resulting from confusing pension fund management with environmental, social and governance strategies that are politically popular but financially unsound.

The CalPERS Clean Energy and Technology Fund, launched in 2007, has seen its value decline from the original commitment of $468.4 million to just $138 million as of March 2025. This represents a loss of more than $330 million, an amount that was burned even after the managers collected at least $22 million in fees. For the public sector employees and taxpayers who end up on the hook, this represents a profound breach of fiduciary confidence.

Green imagination is expensive

The fund was born during the green energy boom of the late 2000s, a period when governments and investors poured billions into clean energy projects. The fund was managed by Capital Dynamics, which at the time expressed a particular focus on US solar projects. A Capital Dynamics-sponsored book on clean energy investing later noted the fate of one such company, Evergreen Solar, saying: “Once a rock star in the solar industry, Evergreen Solar has been unable to keep up with competition from China.”

This narrow, ideologically motivated focus turned out to be a financial disaster. The green energy sector has been overwhelmed by competition from low-cost Chinese producers, leading to the collapse of many companies. The most famous example is Solyndra, which left American taxpayers on the hook for more than $500 million. The CalPERS fund appears to have followed a similar path of failure, chasing green credentials in exchange for strong returns.

The sheer scale of this financial mistake becomes clear when the alternative is considered. If the $468 million were placed in a simple, low-fee S&P 500 index fund with dividends reinvested, the investment would be worth about $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 devastating loss occurred, CalPERS retreated behind a wall of secrecy. The pension fund declined to provide management contracts or investment details, 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 funds are invested,” said David Lowy, legal director of the First Amendment Coalition. “This is a serious transparency concern if the public does not have visibility into how public funds, especially pension funds, are invested, and to what degree of risk.”

Mark Goffey, a public finance expert at the California Policy Center, described the situation as showing “the combined risks of investing in private equity and environmental, social and governance investments.” “It is a very obscure investment option that appears to have been chosen because of its green credentials, yet it has now caused a huge loss to taxpayers and pensioners,” he noted.

In the end, this story is about more than a bad investment. It’s a case study of what happens when large public institutions prioritize political trends over their primary duty of protecting the retirement savings of hard-working people. The mirage of green energy has cost CalPERS hundreds of millions of dollars, proving once again that when the government stakes your retirement on an illusion, it’s the public that is left paying the price.

Sources for this article include:

ZeroHedge.com

TheCenterSquare.com

washingtonexaminer.com