Investors want TLC: Transparency, Longevity, and Certainty.
By CAP’s Jorge Madrid.
This week, a group of 68 investors with assets totaling $415 billion, held a press conference urging Californians to vote NO on Proposition 23 — the November ballot initiative that would halt implementation of the state’s landmark clean energy law AB 32.
“As investors, we need certainty about the policies that govern the sectors in which we invest”¦This policy certainty, however, would be eliminated if Proposition 23 passes…. (It) would cause California to lose billions of dollars of investment and thousands of jobs to competitors like China, Japan, Germany, or other U.S. states that have more stable commitments to clean energy policy.”
Kevin Parker, global head of Deutsche Bank Asset Management, whose firm manages more than $8 billion in clean technology, notes that all investors are looking for some TLC – 1) Transparency, 2) Longevity, and 3) Certainty.
California has been a leader in providing these kinds of business friendly conditions in the clean tech sector, and as a result has the largest clean energy economy of the 50 states, and has attracted 40 percent of global clean tech venture capital.
“However if these kinds of regulatory certainties do not exist, investors will simply take their money elsewhere” continued Parker.
Allen Salzman, CEO of the California-based Vantage Point Venture Partners, a global investment firm with a portfolio of 25 leading clean tech companies and $4.5 billion in committed capital, echoed the opposition of Prop 23 and explained how AB 32 was necessary for innovation.
“Clean Tech is all about innovation, and transforming the way we use our energy, water, and materials”¦and replacing our antiquated and harmful systems into cheaper and better alternatives.”
Salzman believes that “the next industrial revolution is underway, and that California is at the epicenter.”
Finally Chris Davis spoke, the director of the Investor Network on Climate Risk, a network of 90 investors with assets exceeding $9 trillion. He noted that suspending and effectively repealing an existing clean energy and climate law would be a “huge step back” for California and the U.S. as a whole.
“It makes no sense to increase Californian’s dependence on fossil fuels, and trigger more of the air pollution that contributes to asthma and other public health problems, in addition to climate change”¦all the while walking away from the clean energy jobs of the future and California’s global competitiveness.”
Speaking of Investments
California State Treasurer, and former Attorney General, Bill Lockyer urged the state’s largest public employee investment funds (CalPERS and CalSTRS) to divest themselves of Valero and Tesoro stock.
“CalPERS and CalSTRS should not be investing in Texas oil companies that hurt the California economy, no more than they should invest in companies that spend millions of shareholder dollars to undermine California’s environmental laws and the state’s green energy industries and green tech jobs,” Lockyer wrote in a statement this week.
This announcement from the State Treasurer comes a week after several major investment groups filed shareholder resolutions directed against Valero and Tesoro – challenging companies’ political spending policies on prop 23.
“That Valero and the other companies are using company money for such overt political purposes is both inappropriate and reflects poor governance. Beyond stifling California’s fast-growing clean tech economy, rolling back this law will delay the nation’s much needed transition to a clean energy economy and greater energy independence,” said Mindy Lubber, president of Ceres investor network.
The pressure is on from the venture capital and investment world - Prop 23 is bad for innovation and the economic future of California, and the United States.
– Jorge Madrid