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It is a mistake to have the institutional investors involved in moral or societal issues other than returns. That is why we have politics.
Diversification in all its aspects of "over-exposure"; business risk, governmental risk, labor risk, market risk, interest rate risk, governance risk and yes environmental risks are or should be all reflected in the returns.
Like with any new technology/market, there are winners and losers. When governments start to subsidize (heavily) certain industries, these subsidies will be gradually withdrawn until the ventures are profitable or not, so your chances for better than low returns are minimal for quite a while. It may look wonderfully to the "world" but the returns will be sub par almost by definition, and thereby hurt the fiduciary obligations to the pensioners to protect their future payouts.